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U.S. markets higher Friday morning

NEW YORK, Nov. 21 (UPI) -- U.S. markets caught a brief respite from a week of sell offs, rising modestly Friday morning in an atmosphere dominated by recession worries.

Citigroup Inc. shares rose 1.7 percent after a four-day run that combined to drop its value 50 percent. The bank's board of directors were scheduled to meet Friday to discuss possibly selling part or all of the beleaguered financial giant.

In late-morning trading, the Dow Jones industrial average was up 41.57 points, or 0.55 percent, to 7,593.86. The Standard & Poor's 500 rose 0.51 percent, 3.83 points, to 756.27. The Nasdaq composite index gained 7.15 points, 0.54 percent, to 1,323.27.

The benchmark 10-year U.S. Treasury bond fell 1 18/32 to yield 3.18 percent.

The dollar was mixed. The euro rose to $1.2582 compared to $1.2474 Thursday. Against the Japanese yen, the dollar rose to 95.03 yen from 94.14 yen Thursday.

In Tokyo, the Nikkei average gained 207.75 points to 7,910.79, up 2.7 percent.

U.S. gasoline prices fall below $2

NEW YORK, Nov. 21 (UPI) -- The average price at the gas pump nationwide fell below $2 per gallon Friday, a quiet retreat compared to the uproar caused by record high prices this summer.

The national average price fell to $1.989, AAA said, a drop of more than $2.12 per gallon from the record of $4.114 per gallon set July 17.

March 9, 2005 was the last date prices were this low, CNNMoney reported Friday.

"This summer, we thought ($2 a gallon gasoline) was impossible, and now we have crossed the threshold," said Ben Brockwell of Oil Price Information Services.

"It's an important psychological barrier," he said.

Gasoline prices have steadily dropped, falling for more than 60 consecutive days.

While worries of a recession and layoffs mount, "I think the American consumers are afraid that this is a mirage," Brockwell said.

Escalating fuel prices forced commuters to seek out public transportation and sent U.S. automakers scrambling for strategies to appease drivers who had settled into a lifestyle of pickup trucks and SUVs. Jet fuel prices caused turmoil among airlines that reacted with new fees and reduced fleets and flight schedules.

Commodities like corn and wheat hit record prices, as energy costs rose.

Canadian cost of living up in October

OTTAWA, Nov. 21 (UPI) -- The price of gasoline and food led the 2.6 percent increase in the cost of living in Canada in the 12 months to October, Statistics Canada reported Friday.

On a monthly basis, gasoline prices fell 13.4 percent from September to October, but on an annual basis were up 13.3 percent, the agency said.

"Food prices continued to gain momentum, increasing 6.1 percent in October, after a 5.6 percent rise in September," the report said.

Housing costs in the Consumer Price Index rose 3.8 percent month-over-month in October, driven largely by mortgage interest costs and heating fuels.

Transportation costs advanced 1.6 percent in October, attributed to fuel costs, rises in prices for passenger vehicle insurance and air transportation, Stats Can said.

The clothing and footwear price index was the only major component that declined in October, the agency said.

Falling prices sounds fun, but not to some

WASHINGTON, Nov. 21 (UPI) -- The surprise development of falling prices has experts worried that such a hiccup could greatly stall the U.S. economy, economists said.

In a prolonged period of falling prices, consumers hold off on purchases.

"Consumers know if they wait longer, the chances of them not having a good selection is fairly small and the chances are that the prices will be lower," economist Charles McMillion, at MBG Information Services told The Washington Post.

"So why buy today? This is exactly why economists are always scared to death of deflation," McMillion said.

Ed Yardeni at Yardeni Research said deflation would prompt the U.S. Federal Reserve to cut interest rates to push the economy forward. "He (Fed Chairman Ben Bernanke) said he would do this under certain dire circumstances, which are rapidly unfolding," Yardeni said.

Pricing bellwether crude oil fell to below $50 per barrel in New York this week. The consumer price index also fell 1 percent in October, the sharpest monthly drop in 61 years.

Economists say deflation also stops companies from borrowing. Even with interest rates at zero, companies are loath to borrow as prices -- their return on investments -- are falling, the Post said.