Markets start Monday lower
NEW YORK, Jan. 12 (UPI) -- U.S. markets started lower Monday as investors anticipate weaker corporate earnings.
"Earnings are now more likely to disappoint, and across the board, (companies) are slashing estimates going forward," Ken Tower, a market strategist at Quantitative Analysis Services, told The Wall Street Journal.
In late-morning trading, the Dow Jones industrial average lost 91.68 points or 1.07 percent to 8,507.50. The Standard & Poor's 500 fell 15.21 or 1.71 percent to 875.14. The Nasdaq composite index fell 26.35 or 1.68 percent to 1,545.24.
The benchmark 10-year U.S. Treasury bond was unchanged, yielding 2.34 percent.
The euro fell to $1.3362, compared to Friday's $1.3431. Against the Japanese yen, the dollar fell to 88.979 yen from Friday's 90.24 yen.
In Tokyo, the Nikkei average lost 39.62 points to 8,836.80, down 0.45 percent.
Inheritance tax resuscitation likely
WASHINGTON, Jan. 12 (UPI) -- Democratic lawmakers are moving to prevent the estate tax, spun by opponents as a U.S. "death tax," from fading away as an option for tax revenues.
The Senate Finance Committee is expected to introduce legislation that repeals a gradual phase-out of the estate tax pushed by President George Bush in 2001, The Wall Street Journal reported Monday.
A coalition of super-rich, small business owners and farmers moved together to repeal the inheritance tax. But, a recent proposal to block Democratic efforts to stop the phase-out plan included a re-designation of inheritance to capital gains, which would have left small businesses high and dry.
Mark Bloomfield of the American Council for Capital Formation called for the switch, which would have made inheritance eligible for taxation at 15 percent. The previous plan would have meant exemptions for $10 million worth of inheritance for individuals.
Small businesses could have lived with the $10 million ceiling, but the super-rich would have seen the bulk of their estates taxed 45 percent, the Journal said.
The proposal splintered the coalition.
"The very wealthy, in their quest to reduce their exposure, made proposals that threw the small-business community overboard," a lobbyist said.
Citigroup pressured to change leadership
NEW YORK, Jan. 12 (UPI) -- U.S. regulators are pressing New York financial firm Citigroup Inc, to shake up its leadership team, sources said.
The government has provided Citigroup with $45 billion and guarantees on $269 billion of toxic mortgage assets and has recently pushed the company to sell a major share of its brokerage firm Smith Barney, The New York Times reported Monday.
It has also pressured the company to replace Chairman Winfried Bischoff, the German-born Briton who was knighted in 2000, the Times said.
The likely successor would be Richard Parsons, Chairman of Time Warner and a director at Citigroup.
Chief Executive Officer Vikram Pandit's job may be secure. Departing executive Robert Rubin, a former Treasury secretary, said Sunday there was "no current movement afoot to change executive management."
But the government is pressing the company to replace several directors, sources said.
The company's board is meeting Monday to discuss the selling $2.5 billion of Smith Barney shares to Morgan Stanley.
Both the Federal Reserve and the Office of the Comptroller of the Currency, declined to comment on the issue, the Times said.
UAW workers protest at auto show
DETROIT, Jan. 12 (UPI) -- About 75 United Auto Workers members showed up for the opening of Detroit's auto show Monday to protest wage cuts mandated by Washington.
Automakers General Motors Corp. and Chrysler LLC must seek concessions from rank and file workers under terms of $17.4 billion in emergency loans given to the companies to see them through slumping sales and a slow economy, the Detroit Free Press reported Monday.
While automakers struggle, union member have been "demonized," organizer Wendy Thompson said.
The often-told figure of union workers making $72 an hour is "a lie," said union member Frank Warren.
"I think that's ... been promoted by elected individuals to destroy the union," said Warren, who estimated he made $35 an hour including benefits.
The loans mandate GM and Chrysler submit corporate plans by Feb. 17 that include cutting factory pay to match that paid by foreign companies with plants in the United States.
GM must also convince the union to accept two-thirds of a company contribution to a healthcare plan for retired workers in company stock.
