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U.S. markets turn in mixed day Friday

NEW YORK, Sept. 5 (UPI) -- U.S. stock indexes closed a mixed Friday with investors worried consumer spending is weakening.

The U.S. Department of Labor said unemployment rose to 6.1 percent in August, a worrisome jump from last month's 5.7 percent because consumer outlays account for two-thirds of the U.S. gross domestic product.

The Labor Department said 9.4 million workers were unemployed on a loss of 84,000 non-farm jobs last month.

The Dow Jones industrial average, which lost 344 points Thursday, climbed modestly in spite of the labor news, gaining 32.73 points to 11,220.96, up 0.29 percent. The Standard and Poor's 500 rose 5.48 points, or 0.44 percent, to 1,242.31. The Nasdaq composite index was off 3.16 points, or 0.14 percent, to 2,255.88.

On the New York Stock Exchange, 1,583 stocks advanced and 1,518 declined on a volume of 1.19 billion shares traded.

The euro fell to $1.433 from Thursday's $1.4322, while the dollar traded at 107.22 yen, down from Thursday's 107.09 yen.

The 10-year U.S. Treasury note fell 20/32, yielding 3.701 percent.

In Tokyo, the Nikkei 225 closed down 345.43 points, or 2.75 percent, at 12,212.23.

The FTSE 100 index in London also fell, down 121.40, or 2.26 percent, to 5,240.70.

Deals on shipping have consumer appeal

NEW YORK, Sept. 5 (UPI) -- U.S. retailers are keeping a careful eye on their holiday tradition of offering free shipping during the Christmas shopping season, retail analysts said.

While fuel costs have escalated, the cost of shipping by weight has also grown, USA Today reported Friday.

But, retailers are wary of adding to shipping costs, fearing they might cross "some kind of magical emotional threshold," said Jim Hoefflin, of supply-chain software company RedPrairie.

"Retailers are very sophisticated about knowing what kind of emotional threshold there is," he told USA Today.

In a BIGresearch poll, 60 percent of respondents said free shipping was "very important," and retailers seem to have responded. Shop.org said 80 percent of online retailers provided free shipping during part of the past two holiday seasons, the newspaper reported.

Retailers can try to reduce the weight of packages or bury the shipping costs under price hikes or membership fees.

"Consumers love the idea of free shipping so much that many of them pay Amazon $79 a year for the privilege of getting 'free' shipping," Kurt Peters, editor in chief of the Internet Retailer, said to USA Today.

Canadians snap up U.S. homes

GULFPORT, Fla., Sept. 5 (UPI) -- Canadians make up the largest portion of foreign buyers of U.S. homes, buying nearly one-quarter of them, a U.S. real estate trade association says.

Twenty-four percent of foreign U.S. home buyers from May 2007 to May 2008 were Canadian, double the percentage of a year earlier, the National Association of Realtors says.

They were drawn by the buying power of the newly strong Canadian dollar and depressed U.S. real estate prices, the Washington trade group says in a report.

The Canadian dollar was worth about 94 U.S. cents Friday after hitting a high of $1.10 in July 2007. It was worth 80 cents three years ago.

Canadians also benefit from a continued strong Canadian housing market and escalating home equity, unlike many Americans, The Wall Street Journal reported Friday.

Overall Canadian home prices are expected to rise 5.3 percent this year after growing 11 percent in 2007 to an average of $307,265, the Canadian Real Estate Association says.

China's central bank strapped, sources say

BEIJING, Sept. 5 (UPI) -- The People's Bank of China is seeking to raise capital to shore up the $3.2 billion it has on hand, sources close to the central bank said.

The bank has the option to print money, a move that would fuel inflation, The New York Times reported Friday. Instead, it has turned to China's Finance Ministry for help in spite of a fierce rivalry between the two groups, the Times reported.

The banks troubles stem from a buying spree that included about $1 trillion in U.S. Treasury bonds and U.S. mortgage-backed debt.

Solutions also have international ramifications. The bank's large bond portfolio leaves it vulnerable to rising U.S. interest rates and a strengthening yuan. Nevertheless, a strong yuan -- advocated by the Bush administration -- finds less support in the Finance Ministry than it does at the bank, the Times reported.

A stronger yuan means Chinese goods are less competitive in the global marketplace. Turning to the Finance Ministry for help is also not the bank's favorite option, "because it puts them more under the thumb of the Finance Ministry," Eswar Prasad, the International Monetary Fund's former division chief for China told the Times.