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U.S. markets rally wavers Friday

NEW YORK, May 2 (UPI) -- U.S. stock indexes pushed to a close Friday, putting the Dow Jones industrial average about 1 point more than its previous highest closing level for the year.

Helped by Thursday's 190-point rally, the Dow Jones industrial average closed the week at 12,058.20, up 48.20 points on the day Friday, a 0.37 percent gain.

The Standard and Poor's 500 index gained 4.56 points to 1,413.90, up 0.32 percent. The Nasdaq composite of tech-dominated stocks fell 3.72 points Friday to 2,476.99, off 0.15 percent.

On the New York Stock Exchange, 1,769 stocks advanced and 1,331 declined on a volume of 1.271 billion shares traded.

The 10-year U.S. Treasury note lost 23/32 to yield 3.863 percent.

The dollar gained. The euro traded at $1.543 from Thursday's $1.5459, while the dollar traded at 105.31 yen from Thursday's 104.36 yen.

In Tokyo, the Nikkei index gained 282.40 points to 14,049.26, up 2.05 percent.

In London, the FTSE 100 gained 119.10 to 6,206.40, up 1.96 percent.

Microsoft and Yahoo! start merger talks

REDMOND, Wash., May 2 (UPI) -- Microsoft Corp. has increased its purchase offer for Yahoo! Inc., pulling the California search engine giant into formal negotiations, a source said Friday.

The source said the offer was increased "by several dollars," The New York Times reported.

Some Yahoo! shareholders have received calls from both companies asking what size of a purchase offer they would accept.

Microsoft Corp. Chief Executive Steven Ballmer told employees earlier this week that the company could negotiate, get tough or walk away from pursuing Yahoo! Inc., sources said.

Yahoo! has rejected Microsoft's purchase offer of $31 per share, but Chief Executive Jerry Yang had said Yahoo! would consider a larger offer.

With stock values shifting since the initial offer was made, the price had gone down to $29.30 per share.

Some shareholders said they were waiting for the offer to reach $35 a share but one said he believed the deal could be settled at $34 a share, the Times reported.

Ballmer told Microsoft employees earlier this week, "I know exactly what I think Yahoo! is worth to me. I won't go a dime above and I will go to what I think it's worth if that gets the deal done."

More Bloomberg claimants found

NEW YORK, May 2 (UPI) -- The number of claimants in a discrimination suit in New York City against news service Bloomberg LP has grown to 58, an employment commission said Friday.

The Equal Employment Opportunity Commission brought suit against the company in September with three plaintiffs, who complained they were offered lesser jobs or pay cuts when they said they were pregnant, The New York Sun reported.

The investigation will include interviews with 478 women who took maternity leaves at Bloomberg over the last six years.

New York City Mayor Michael Bloomberg, who owns 68 percent of the company, stepped down as company chairman when he began his political career. Bloomberg wasn't involved with daily operations during the period the alleged discrimination took place, the Sun reported. But, one court filing said he "is responsible for the creation of a systemic, top-down culture of discrimination."

When asked about the suit Thursday at a news conference in New York, Bloomberg said, "I have absolutely no idea."

He then berated the reporter for asking a question off-topic, the Sun reported.

Equity cash out at 4-year low, lender says

WASHINGTON, May 2 (UPI) -- Home equity cashed out during refinancing, in the first quarter, dropped to the lowest level in four years, a report issued Friday said.

The Federal Home Loan Mortgage Corp. deputy chief Amy Crews Cutts said the $29 billion in home equity cashed out was a drop from the fourth quarter 2007 figure of $36 billion and about one-third of the level from a year ago.

Frank Nothaft, Freddie Mac's chief economist, said tighter underwriting standards and falling home values combined to reduce equity conversions.

"While equity conversion is down, regular refinance activity has stepped up," Nothaft said.

Fixed-rate mortgages hit four-year lows in the quarter, which prompted "large volumes of refinancing," he said.