U.S. markets close mixed Tuesday
NEW YORK, May 12 (UPI) -- U.S. markets were mixed Tuesday after the government said the international trade deficit rose to $27.6 billion in March, pushed by rising oil prices.
Economists had forecast an increase from February's $26.1 billion deficit to $28.9 billion. Although the rise was lower than expected, markets turned lower.
By close, the Dow Jones industrial average gained 50.34 points, or 0.6 percent, to 8,469.11. The Standard & Poor's 500 fell 0.1 percent, 0.89 points, to 908.35. The Nasdaq composite index shed 15.32 points, 0.88 percent, to 1,715.92.
On the New York Stock Exchange, 1,270 stocks advanced and 1,744 declined on a volume of 6.5 billion shares traded.
The benchmark 10-year U.S. Treasury bond rose 3/32 to yield 3.176 percent.
The euro rose to $1.3636, compared to Monday's $1.3584. Against the Japanese yen, the dollar fell to 96.51 yen, compared to Monday's 97.42 yen.
In Tokyo, the Nikkei average lost 153.37 points, 1.62 percent, to 9,298.61.
In London, the FTSE index lost 0.22 percent, 9.96, to 4,425.54 points.
Subprime case a 'landmark,' expert says
BOSTON, May 12 (UPI) -- A Goldman Sachs settlement over its role in the subprime mortgage market collapse in Massachusetts is a "landmark case," a mortgage finance expert said.
"This is a landmark case. It is one of the few times we've seen somebody who didn't actually originate the loans being held accountable," said Guy Cecala, the chief executive of Inside Mortgage Finance, The Boston Globe reported Tuesday.
Cecala said the case, in which Goldman Sachs agreed to a $60 million settlement, was a "significant precedent."
"If Massachusetts can do it with Goldman Sachs, who else can they do it with?" Cecala asked.
While Goldman Sachs did not originate the loans, it played a hand in keeping the market open by buying bundled loans, known as securities, which funded more loan activity, the Globe said.
As the market collapsed, the loans were viewed as unfair.
"We've made the determination, and our courts have agreed, that many of these loans were unfair. They were destined to fail," said state Attorney General Martha Coakley. "Our focus is on trying to get relief for homeowners and for Massachusetts."
Price gains at the pump should calm down
NEW YORK, May 12 (UPI) -- Escalating U.S. prices for gasoline are not likely to reach the same, dizzying $4.00 per gallon price they hit last summer, market analysts said.
The average pump price of gasoline has jumped 18 percent in the past two weeks, reaching $2.226 per gallon Monday, AAA reported Tuesday.
But "the bump up is expected this time of year," AAA spokesman Troy Green told CNNMoney.com.
"We're not on the way to another spike," he said.
Chris Lafakis, economist at Moody's Economy.com. said the economic environment was too weak to support a sharp rise in gasoline prices.
"In an environment where income growth is very weak or has declined, you're not going to get the kind of demand that is necessary to push gas prices to $2.50 or $3.00 a gallon."
"That won't happen this summer because the macro economic environment is putting a ceiling on gas prices," he said.
Banks turn to network marketing
NEW YORK, May 12 (UPI) -- Large U.S. banks are turning to Internet social network Web sites to get the word out on a variety of marketing messages, bank officials said.
"Social media is a whole new world," said Pamela Blasé, a spokeswoman for Kansas City's UMB Financial. "You cannot afford to not be a part of it," she said.
Banks, such as Citigroup Inc., American Express and Wells Fargo & Co., have placed messages on Web sites such as Facebook and Myspace, USA Today reported Tuesday.
Other banks have turned to the popular YouTube Web site for broadcasting information on features and services.
"There's a lot of worry out there," said Ed Terpening, vice president of social media at Wells Fargo. "That means that we have to stay close to our customers."
The networking sites provide a "pure, instant" media for banks, Discover's director of e-commerce Steve Furman said.
The Web sites also give customers a chance to speak their minds.
"Stop making your living off my late fees!" wrote Jesse Hattabaugh of San Francisco in recent post. "You fine me more than you loan me!" Hattabaugh wrote.
