UPI NewsTrack Business

U.S. markets mixed Thursday

NEW YORK, Jan. 8 (UPI) -- U.S. markets were mixed Thursday on weak employment news and Macy's announcement that it would close 11 stores due to a downturn in sales.

In late-morning trading, the Dow Jones industrial average fell 46.67 points, or 0.53 percent, to 8,723.03. The Standard & Poor's 500 fell 0.23 percent, 2.11 points, to 904.54. The Nasdaq composite index rose 2.43 points, 0.15 percent, to 1,601.49.

The benchmark 10-year U.S. Treasury bond rose 6/32 to yield 2.475 percent.

The euro rose to $1.3736, compared to Wednesday's $1.363. Against the Japanese yen, the dollar fell to 91.02 yen, down from Wednesday's 92.66 yen.

In Tokyo, the Nikkei average dropped 362.82 points to 8,876.42, down 3.93 percent.

Poll: U.S. consumers less pessimistic

PRINCETON, N.J., Jan. 8 (UPI) -- An index of U.S. consumer expectations showed some guarded optimism this week, a private research group said.

The difference between respondents in a national survey of consumer indicating the economy is "getting worse" and those indicating it was "getting better" improved to minus 50 points in the week ending Jan. 4, Gallup Poll researchers said.

In mid-December, the index of consumer sentiment was at minus 70, Gallup said.

The increased optimism -- more accurately, the decreased pessimism -- held true for respondents in lower and upper income brackets, Gallup said.

Given President-elect Barack Obama's description of the economy as "dire" and other negative signals, "it seems rather ironic that consumer expectations for the future of the U.S. economy have improved somewhat," Gallup Chief Economist Dennis Jacobe said in a statement.

The "uptick," Jacobe said, could be attributed to holiday cheer, lower gas prices or talk of a new economic stimulus package, Jacobe said.

The survey results are based on no fewer than 1,000 daily interviews and carry a sampling margin of error of plus and minus 1 percentage point, Gallup said.

China may pull back from U.S. debt

BEIJING, Jan. 8 (UPI) -- The economic slowdown is pushing the Chinese central bank to keep more of its money close to home, reducing its appetite for U.S. bonds, an economist said.

"All the key drivers of China's Treasury purchases are disappearing -- there's a waning appetite for dollars and a waning appetite for Treasuries," Ben Simpfendorfer, a Royal Bank of Scotland economist, told The New York Times.

China, surpassing Japan as the No. 1 owner of Treasuries, holds $1 trillion in U.S. debt, the Times said Thursday.

A pullback in purchases, however, could trigger a cyclical rise in interest rates for U.S. borrowers -- currently not an issue as private investors have fled stocks recently in favor of the safe harbor of U.S. Treasuries.

China, however, simply has less money to spend on U.S. debt, due to the global economic slowdown and a downturn in its own stock market, analysts said.

China's export revenues are expected to drop this year.

"The pace of foreign currency flows into China has to slow," said Dariusz Kowalczyk, the chief investment officer at SJS Markets Ltd.

Less money in and a $600 billion domestic stimulus package to pay for means China has less to spend abroad, the Times said.

Gazprom, Naftogaz officials in Brussels

BRUSSELS, Jan. 8 (UPI) -- The heads of Ukraine and Russia's energy companies arrived in Brussels to negotiate an end to a natural gas lock down that has left much of Europe cold.

European Commission President Jose Manuel Barroso said Russian Prime Minister Vladimir Putin and Ukraine President Yuliya Tymoshenko had agreed in principle to allow independent parties to monitor the pipeline shut down over a dispute over Ukraine's gas bill.

Russia and Ukraine have blamed each other for halting gas flows through the pipeline that delivers 80 percent of Russia's natural gas to Europe, The Times of London reported.

Several European countries have declared states of emergency as below zero temperatures gripped parts of the continent.

Bosnian Foreign Minister Sven Alkalay said "four million of our citizens are in danger."

Austria, Bulgaria, Slovakia, the Czech Republic, Bosnia, Croatia, Greece, Hungary, Macedonia, Romania, Serbia and Turkey. France, Italy, Germany and Poland have reported supply disruptions.

Russia's energy giant Gazprom claims Ukraine owes $614 million in late fees for gas deliveries. Negotiations for Ukraine's 2009 contract have also broken down.

Russia also says Ukraine siphoned gas intended for Europe from the line.

Barroso said the two countries were holding Europe "hostage" to the situation.