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U.S. markets down slightly Friday morning

NEW YORK, Nov. 14 (UPI) -- U.S. markets fell slightly early Friday on negative news from Sun Microsystems Inc. and the Federal Home Loan Mortgage Corp.

Sun Microsystems said it would trim its workforce by 15 percent to 18 percent -- a loss of 5,000 to 6,000 jobs. In Washington, Freddie Mac reported it was broke with liabilities exceeding assets by $13.8 billion. The company requested $14 billion from the Treasury, a contingency that was part of a deal made with the government seized control of Freddie Mac in September.

The Dow Jones industrial average edged lower, down 0.24 percent, or 21.42 points, to 8,813.83. The Standard & Poor's 500 fell 0.63 percent, 5.70 points, to 905.59. The Nasdaq composite index lost 21.51 points, 1.5 percent, to 1,572.74.

The benchmark 10-year U.S. Treasury bond rose 23/32 to yield 3.763 percent.

The dollar was mixed. The euro fell to $1.2714, compared to $1.2853 Thursday. Against the Japanese yen, the dollar fell to 97.28 yen, from 97.82 yen Thursday.

In Tokyo, the Nikkei average rose 2.72 percent, up 223.75 points to 8,462.39.

China closes 67,000 factories this year

BEIJING, Nov. 14 (UPI) -- A declining export market contributed to the closing of 67,000 factories in China from January through June, government data revealed.

While exports are still growing, the annual growth rate of 9 percent in October contrasts sharply with the September 2007 annual growth rate of 26 percent, The New York Times reported Friday.

Closing factories have left thousands of Chinese workers angry over the loss of back pay, leading to some clashes with police, the Times said.

Others are wondering where to turn to find jobs. The Pearl River Delta, an area known as the "world's factory" once served as the backbone to China's massive export business. Now many workers are returning to their homes in country villages, the Times said.

Once his back pay arrives, "I plan to return home," said Wang Denggui, a father of three who worked at a shoe factory that closed Nov. 1. "I'm over 50 years old, and I won't be able to find work. I'll just retire," he said.

Freddie Mac seeks $14 billion bailout

WASHINGTON, Nov. 14 (UPI) -- The Federal Home Loan Mortgage Co. said it had requested $14 billion in federal aid after posting third-quarter losses of $25.3 billion.

The government took control of Freddie Mac in September with a deal that included the promise of cash injections of up to $100 billion should the company's assets fall behind their liabilities, The Washington Post reported Friday.

The same deal was made with the Federal National Mortgage Association -- Fannie Mae -- which reported a $29 billion quarterly loss earlier this week, a figure that did not trigger a request for capital, the Post reported.

Freddie Mac's report, however, says the company's liabilities are $13.8 percent higher than its assets.

Freddie Mac cited, "the dramatic deterioration in market conditions ... declining home prices, increasing unemployment, a significant decline in consumer spending and a considerable tightening of both consumer and business credit," as contributing factors.

Before the report was released, economists had forecast continuing problems.

"Fannie Mae and Freddie Mac are completely exposed to the housing market," said Howard Shapiro, an analyst at Fox-Pitt Shelton. "Until home values stabilize and delinquency trends stabilize, we're going to continue to have this discussion."

FDIC has plan of its own for homeowners

WASHINGTON, Nov. 14 (UPI) -- The Federal Deposit Insurance Corp. has come up with a $24.4 billion plan of its own for helping as many as 1.5 million distressed U.S. homeowners.

The plan puts the FDIC at odds with the Bush administration. Treasury Secretary Henry Paulson Jr. this week unveiled a mortgage-modification plan, which FDIC Chairman Sheila Bair said didn't go far enough.

The FDIC plan would help homeowners who are at least two payments behind on their mortgages, The Washington Post reported Friday.

The FDIC plan would be adjust monthly payments to 31 percent of a homeowner's household income with the government paying for half the lender's losses in most occasions if the plan fails, the Post said.

The FDIC estimates one-third of the adjusted mortgages would still go into default. Credit Suisse, in a recent research note, said 45 percent of modified loans have gone back into default.

U.S. Sen. Christopher J. Dodd, D-Conn., said the Treasury should act on the plan.

"It is confounding to me why the secretary of the Treasury and others refuse to understand that this is the heart of the problem," Dodd said to the Post. "Until we solve the foreclosure problem, we will not have any hope of solving the larger problem."