UPI NewsTrack Business

Markets mixed Friday

NEW YORK, May 15 (UPI) -- U.S. markets were mixed Friday after the Labor Department said consumer prices held steady for the month, but were down sharply from a year ago.

The 0.7 percent annual drop was the sharpest 12-month decline since 1955, the department said. Energy prices led declines with a 12-month drop of 25.2 percent.

In late morning trading, the Dow Jones industrial average was up just 2.07 points, or 0.02 percent, to 8,333.39. The Standard & Poor's 500 lost 0.28 percent, 2.47 points, to 890.60. The Nasdaq composite index gained 5.02 points, 0.30 percent, to 1,694.23.

The benchmark 10-year U.S. Treasury bond rose 8/32 to yield 3.121 percent.

The euro fell to $1.3575, compared to Thursday's $1.3637. Against the Japanese yen, the dollar fell to 95.25 yen, compared to Thursday's 95.75 yen.

In Tokyo, the Nikkei average gained 171.29 points to 9,265.02, up 1.88 percent.

GM to close 1,100 dealerships

DETROIT, May 15 (UPI) -- U.S. auto giant General Motors Corp. said Friday it would severe ties with 1,100 car dealerships, a day after Chrysler cut 789 outlets.

Susan Garontakos, spokeswoman for GM, the largest U.S. automaker, said the dealerships would have until October 2010 to close. But many are expected to close this year, CNNMoney.com reported.

GM will pare down to 3,600 active dealerships, a 40 percent total reduction.

Analysts said the move could push GM into a legal corner that makes bankruptcy inevitable. Closing dealerships without declaring bankruptcy could lead to legal clashes with the outlets that were forced to close, CBS News reported.

About 600 of the dealerships to be cut sold primarily Pontiac, Saab, Hummer or Saturn brands, which the company expects to close out or sell, CNNMoney.com said.

Even before the announcement, about 300 GM dealerships closed this year due to a prolonged sales slump that has crippled the automotive industry.

GM, which has accepted $15.4 billion in federal loans, has until June 1 to trim its debt and find union concessions to qualify for more federal assistance. It has already said it would close 16 factories this year and lay off 27,000 workers.

Treasury offers TARP funds to insurers

WASHINGTON, May 15 (UPI) -- The U.S. Treasury said it would offer $22 billion in loans to insurance companies that qualified for federal assistance.

Several insurance companies scrambled to buy savings and loans after the government assembled the $700 billion Troubled Asset Relief Program last fall as a bailout for banks.

After receiving tentative approval for the funds in April, the Treasury said Thursday that Hartford Financial Services Group, Prudential Financial, Lincoln National, Allstate, Ameriprise and Principal Financial Group were eligible for assistance, The New York Times reported Friday.

Although designated for banks, TARP funding has been used to help insurance giant American International Group Inc. and General Motors Corp.'s financial lender GMAC. Credit card company American Express, also changed its status to qualify for assistance.

"These funds would further fortify our capital resources and provide us with additional financial flexibility during one of the most volatile market climates in our nation's history," Hartford's Chairman and Chief Executive Officer Ramani Ayer said.

"You want the regulatory program to be as broad as possible," Financial Roundtable lobbyist Scott Talbott told the Times.

"If all it took was regulatory gymnastics, that expands the program," he said.

Panasonic reports loss of $4 billion

OSAKA, Japan, May 15 (UPI) -- Japanese semi-conductor and electronics giant Panasonic said it lost $4 billion in the past year.

Panasonic -- formerly Matsushita Electric -- said sales fell 14 percent in the fiscal year that ended March 31, CNN reported Friday.

The firm lost about $3 billion more than analysts had expected. But losses are not unprecedented among Japanese firms that rely heavily on exports.

Sony said it lost $1 billion last year, its first annual loss in 14 years.

Toyota Motors said last week it expected to lose $5.5 billion over the fiscal year, the Detroit Free Press reported. Hitachi said it lost $8 billion in the fiscal year with revenues down 11 percent, CNN reported.

NEC Corp. lost $3 billion in the past fiscal year. Nissan posted a loss of $2.3 billion.