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Markets close lower Monday

NEW YORK, Jan. 12 (UPI) -- U.S. markets closed lower Monday with financial firms among those leading the decline.

Citigroup Inc., under pressure to sell a portion of Smith Barney, fell 19.26 percent. Bank of America shares dropped 12.24 percent.

By close, the Dow Jones industrial average lost 125.13 points, or 1.46 percent, to 8,474.05. The Standard & Poor's 500 fell 2.26 percent, 20.09 points, to 870.26. The Nasdaq composite index fell 32.80 points, 2.09 percent, to 1,538.79.

On the New York Stock Exchange, 731 stocks advanced and 2,362 declined on a volume of 5.1 billion shares traded.

The benchmark 10-year U.S. Treasury bond rose 24/32, to yield 2.316 percent.

The euro fell to $1.3371, compared to Friday's $1.3431. Against the Japanese yen, the dollar fell to 89.14 yen from Friday's 90.24 yen.

In Tokyo, the Nikkei average lost 39.62 points to 8,836.80, down 0.45 percent.

In London, the FTSE 100 index dropped 0.5 percent, 22.35 points, to 4,426.19.

U.S. airlines balance year on fuel prices

NEW YORK, Jan. 12 (UPI) -- Earnings at U.S. airlines could take off this year as the price of fuel has plummeted from the record price set last summer, an industry analyst said.

Vaughn Cordle, chief executive officer of AirlineForecasts LLC said earnings could hit $3.5 billion this year after losing $4.5 billion in 2008, the Chicago Tribune reported Monday.

The key to the airlines' earning potential is the price of fuel. The nine largest U.S. carriers could spend $20.4 billion less on fuel this year compared with 2008 if the price of crude oil averages $60 a barrel, Cordle said.

Current prices of oil are below $40 per barrel.

"If at $140 (per barrel) you're dying, you've got a chance at $50," former Continental Airlines CEO Gordon Bethune said.

Ticket revenues could fall 7 percent with the slower economy, Cordle said. But, Delta Air Lines President Ed Bastian said in December that passenger revenues need to fall 17 percent to offset the $5 billion the airline would save if oil prices averaged $50 per barrel for the year.

Madoff to remain out on bail

NEW YORK, Jan. 12 (UPI) -- A federal judge said Monday that New York trader Bernard Madoff can remain confined to his Manhattan penthouse with an electronic monitor bracelet.

U.S. Magistrate Judge Ronald Ellis said prosecutors did not prove Madoff, accused of conducting a $50 billion Ponzi scheme, was a flight risk, The New York Times reported.

Madoff has been confined to his luxury apartment on $10 million bail since his arrest in December. But prosecutors asked for bail to be revoked after Madoff sent a million dollars worth of jewelry to friend and relatives, which prosecutors said was a violation of his bail terms.

Prosecutors said Madoff was distributing valuable assets. His attorneys said he was giving family heirlooms to relatives.

His lawyers agreed that Madoff's outgoing mail could be monitored. Prosecutors had also said Madoff had $173 million in signed checks in his desk, potentially ready for distribution, when he was arrested.

Madoff's lawyers have also agreed to a 30-day extension on a deadline -- which would have been today -- for prosecutors to file a formal indictment against Madoff.

Denny's finds recession good for business

SPARTANBURG, S.C., Jan. 12 (UPI) -- The recession that started in December 2007 roughly coincides with a turnaround year for U.S. restaurant chain Denny's, the company said.

In October, the chain raised its earnings expectations for 2008 to $20 million, a jump of 90 percent above its 2007 earnings, the Miami Herald reported Monday.

Chief Executive Officer Nelson Marchioli said the turnaround actually began three years ago.

Marchioli, a former Burger King executive, said he closed 139 restaurants in his first 15 months with the company and "I didn't do that because they were good."

In the past three years, however, the company has revamped its menu, added specialty items and attempted to bring out a new image.

"If you haven't been to Denny's in the past three years, you haven't been to Denny's," Marchioli said.

The message falls in step with the Marchioli's efforts to increase the restaurant's repeat business.

Marchioli also said, "This economy is a perfect time for Denny's."

"If you think about it, people are pressed for money," he said. "Value is a big deal. The chains that are doing well have a value message and they talk about it," he said.