U.S. markets close higher
NEW YORK, May 28 (UPI) -- U.S. stocks closed with gains Thursday after the Labor and Commerce departments reported positive employment and manufacturing news.
First-time unemployment claims dropped by 13,000 compared to the previous week, the Labor Department said. Commerce reported new orders for durable goods climbed 1.9 percent in April compared to March.
Although expected, the Organization of Petroleum Exporting Countries said it would leave oil production quotas unchanged "for the time being."
By close, the Dow Jones industrial average gained 103.78 points or 1.25 percent to 8,403.80. The Standard & Poor's 500 rose 13.77 or 1.54 percent to 906.45. The Nasdaq composite index added 20.71 or 1.2 percent to 1,751.79.
On the New York Stock Exchange, 2,001 stocks advanced and 1,042 declined on a volume of 5.9 billion shares traded.
The benchmark 10-year U.S. Treasury bond rose 30/32 to yield 3.618 percent.
The euro rose to $1.3943, compared to Wednesday's $1.3941. Against the Japanese yen, the dollar fell to 96.82 yen, compared to Wednesday's 96.92 yen.
In Tokyo, the Nikkei average gained 12.62 points to 9,451.39, up 0.13 percent.
In London, the FTSE index shed 28.69 points, 0.65 percent, to 4,387.54.
Nader warns against aiding outsourced GM
DETROIT, May 28 (UPI) -- U.S. consumer advocate Ralph Nader said taxpayer assistance for General Motors Corp. should not benefit its outsourced operations.
"Do we really want the United States of America to export its auto industry paid for by the taxpayer and unemployed workers to a dictatorship (in) a country like China?" Nader said, CNN reported Thursday.
As GM's North American and European operations struggle to survive the recession, the company's operation in China has prospered.
GM is currently the third largest automaker in China, which is now the world's largest auto market. However, the company has accepted $19.4 billion in emergency loans from the U.S. government and is on the verge of filing for bankruptcy.
President and Managing Director of GM China Kevin Wale said the business in China "is run as separate joint-ventures … in partnership with Shanghai Automotive Industry Corp."
Michael Dunne, an industry analyst at J.D. Power and Associates China said GM in China would remain "insulated from the bankruptcy back home."
The concern, however, has found a voice on Capital Hill. "That cannot be a part of their restructuring of this company. Their business plan cannot include more outsourcing of jobs while taking taxpayer money," said Sen. Sherrod Brown, D-Ohio.
Time Warner to spin off AOL
NEW YORK, May 28 (UPI) -- U.S. telecommunications giant Time Warner Inc. said Thursday it would spin off AOL to provide the company with flexibility and improve its core businesses.
The anticipated separation "will be the best outcome for both Time Warner and AOL," Time Warner's Chairman and Chief Executive Officer Jeff Bewkes said in a statement.
AOL Chairman and CEO Tim Armstrong called the move "a great opportunity for AOL, our employees and our partners."
Time Warner owns 95 percent of AOL; Google owns 5 percent.
AOL, with 107 million unique Web visitors each month, has struggled, as advertising revenues declined last year.
Armstrong conceded, "we have a tremendous amount of work to do."
The proposed spin off would be structured as a tax-free transaction for Time Warner stockholders, Time Warner said.
Checking account fees rise on new law
WASHINGTON, May 28 (UPI) -- U.S. banks are turning to checking account fees to make up for revenue declines expected from the new credit card law, industry experts said.
A new law that cracks down on various credit card practices highlighted "business 101," in which "if you take losses in one area, you try to offset them in other areas of operation," Georgetown University law professor Adam Levitin told USA Today Thursday.
In recent changes, Bank of America said it will increase monthly fees on some checking accounts and initiate a fee for accounts that keep a negative balance. SunTrust said it would increase fees for repeated overdrafts. Wachovia said it would raise the price of transferring funds to overdrawn accounts.
Scott Talbott of the Financial Services Roundtable said overdrafts are, in effect, loans.
"They're exactly like credit cards. There's no collateral for them," he said.
Banks are "supposed to act in the interest of shareholders, so they're gouging customers," said Simon Johnson, a former chief economist for the International Monetary Fund.
A 2008 Federal Deposit Insurance Corp. study said a $27 charge on a $20 overdraft amounted to a loan with an annual percentage rate of 3,520 percent.
