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U.S. markets fall hard on job news

NEW YORK, Jan. 7 (UPI) -- U.S. stocks indexes were sharply lower Wednesday with employment concerns pointing to further erosion in the economy.

Alcoa Inc. said it would shed 13,500 jobs. Challenger, Gray & Christmas Inc., an international outplacement consulting firm, said December's layoff announcements were a record for the month while ADP and Macroeconomic Advisers said 693,000 non-farm jobs were lost in December.

By close, the Dow Jones industrial average shed 245.40 points or 2.72 percent to 8,769.70. The Standard & Poor's 500 fell 28.05 or 3 percent to 906.65. The Nasdaq composite index lost 53.32 points, 3.23 percent to 1,599.06.

On the New York Stock Exchange, 622 stocks advanced and 2,490 declined on a volume of 5.9 billion shares traded.

The benchmark 10-year U.S. Treasury bond fell 12/32 to yield 2.498 percent.

The euro rose to $1.3651, compared to Tuesday's $1.363. Against the Japanese yen, the dollar fell to 92.59 yen, down from Tuesday's 93.66 yen.

In Tokyo, the Nikkei average gained 158.40 points to 9,239.24, up 1.74 percent.

In London, the FTSE 100 index fell 131.41 points, down 2.83 percent, to 4,507.51.

Paulson says GSEs need a new structure

WASHINGTON, Jan. 7 (UPI) -- U.S. Treasury Secretary Henry Paulson Jr. Wednesday called for restructured models for the nation's largest mortgage brokers.

The Federal Home Loan Mortgage Corp. and the Federal National Mortgage Association, grew to their enormous sizes -- holding collectively $5.4 trillion in debt obligations -- in part due to the misconception that they were government-backed enterprises, Paulson said.

But, with its most recent steps to purchase pump $600 billion into the companies, the federal government has "gone about as far as we can to avert systemic risk and to use the GSEs (government-sponsored enterprises) to speed progress through the housing correction," he said.

Since the GSEs fell into conservatorship in September, "almost all new mortgage market originations have federal government credit support," Paulson said.

"This is not sustainable over the long-run," he said.

In a prepared speech before the Economic Club of Washington, Paulson outlined options for moving forward, including expansion of the Federal Housing Administration and Government National Mortgage Association and creation of a "Ginnie Mae-like entity for non-FHA mortgages" that would offer a "partial guarantee" to the industry.

Paulson also said a utility-like entity could be set up with pre-established rates of return.

Walt Disney World settles 5-year-old suit

ORLANDO, Fla., Jan. 7 (UPI) -- Walt Disney World has settled a prolonged legal battle with a Pennsylvania company that designed one of its more controversial rides, officials said.

Two people have died on the Mission: Space ride that opened in 2003 and simulates the forceful physics of blasting off and flying through space, the Orlando, Fla., Sentinel reported Wednesday.

Both deaths were attributed to previous medical conditions, the newspaper said.

Environmental Tectonics Corp., which designed the ride, filed a suit against Walt Disney World five years ago, claiming the theme park owner still owed it money and leaked design information to a rival company.

Disney counter-sued, claiming the Pennsylvania company did not meet its contractual obligations. Disney also said cost overruns based on Environmental Tectonics' failings exceeded $20 million.

Terms of the settlement were confidential, the Sentinel reported.

Motorola to introduce eco-friendly phone

SCHAUMBURG, Ill., Jan. 7 (UPI) -- U.S. technology giant Motorola Inc. said it would introduce an eco-friendly mobile phone at the Consumer Electronics Show in Las Vegas.

One of three new phones Motorola will unveil when the show opens Thursday is the Moto W233 Renew, which has a protective housing made from recycled plastic water bottles, the Chicago Tribune reported Wednesday.

Motorola said the phone, which it calls, "the world's first carbon neutral phone," will be "very affordable."

The company is set to introduce more eco-friendly products later in the year, having developed "green design" standards to research each Motorola product's environmental impact, the Tribune reported.

Motorola will also unveil its extra-rugged Tundra VA76r, designed for a wide range of weather conditions.

Motorola did not announce prices, but said the new phones would be available from AT&T starting Jan. 13.