UPI NewsTrack Business

U.S. markets regain some lost ground

NEW YORK, June 25 (UPI) -- U.S. markets closed higher Thursday as the Commerce Department reduced its earlier assessment of the first quarter's economic contraction.

The gross domestic product fell 5.5 percent in the first quarter, a final figure that was an improvement over last month's 5.7 percent estimate.

The Department of Labor said first-time claims for unemployment benefits turned higher this week, climbing by 15,000 to 627,000 claims in the week ended June 20.

By close, the Dow Jones industrial average added 172.54 points or 2.08 percent to 8,472.40. The Standard & Poor's 500 added 19.32 or 2.14 percent to 920.26. The Nasdaq composite index was up 37.20 or 2.08 percent to 1,829.547.

On the New York Stock Exchange, 2,460 stocks advanced and 571 declined on a volume of 5 billion shares traded.

The benchmark 10-year U.S. Treasury bond rose 1 9/32 to yield 3.536 percent.

The euro rose to $1.399, compared to Wednesday's $1.3942. Against the Japanese yen, the dollar rose to 95.84 yen, compared to Wednesday's 95.47 yen.

In Tokyo, the Nikkei average gained 205.76 points to 9,796.08, up 2.15 percent.

In London, the FTSE 100 index lost 27.42, 0.64 percent, to 4,252.57.

Texas 'billionaire' pleads not guilty

HOUSTON, June 25 (UPI) -- Texas businessman R. Allen Stanford pleaded not guilty to fraud charges in Houston Thursday in a case defined by a potential loss of $7 billion.

The one-time billionaire arrived for his packed courthouse appearance before Federal Magistrate Frances Stacy in handcuffs and shackles, wearing a short-sleeved, prison-issue orange jump suit.

The judge could rule Thursday on a bond agreement that would set Stanford free until his trial, The New York Times reported.

Stanford is accused of running a Ponzi scheme that revolved around promises of unrealistically high rates of returns for investors.

Stanford Financial Group executives Laura Pendergest-Holt, Gilberto Lopez and Mark Kuhrt also entered not guilty pleas, the newspaper said.

The Times said Leroy King, a financial regulator from Antigua, had surrendered to authorities.

King is accused of accepting payment to overlook irregularities in the Stanford Financial Group's operations.

Bernanke says Fed acted above board

WASHINGTON, June 25 (UPI) -- U.S. Federal Reserve Chairman Ben Bernanke said the central bank acted with integrity in guiding the sale of Merrill Lynch & Co.

"I believe that the Federal Reserve acted with the highest integrity throughout its discussions with Bank of America," Bernanke told members of the House Committee on Oversight and Government Reform.

The bank has come under criticism after Bank of America Chief Executive Officer Kenneth Lewis suggested top regulators pushed the deal through last winter by threatening jobs and advising him to keep Merrill Lynch losses a secret from shareholders.

In a prepared statement, Bernanke said, "I did not play a role in arranging this transaction and no Federal Reserve assistance was promised or provided in connection with that agreement."

When Lewis threatened to pull back from the purchase on Dec. 17, Bernanke said he "expressed concerns" about the bank's credibility and the possibility of "a broader systemic crisis."

The $20 billion rescue package for Bank of America after the deal was struck was made "to reduce the risk of market disruption," Bernanke said.

"I did not tell Bank of America's management that the Federal Reserve would take action against the board or management," if they decided against making the deal, he said.

L'Oreal discrimination verdict upheld

PARIS, June 25 (UPI) -- The highest court in France upheld a 2007 ruling Thursday, declaring cosmetic giant L'Oreal guilty of racial discrimination.

Attorneys said the company's beauty division, Garnier, had a hiring policy known as "blue, white, red" -- the colors of the French flag -- meaning employees should be white and French-born, The Times of London reported.

The company's image had already been tarnished by rumors singer Beyonce Knowles' skin had been lightened for an advertising campaign. Company executives were forced to deny the allegation.

France's highest court, the Court of Cassation, also ruled recruitment agency Adecco was guilty of discrimination.

The lower court had ordered the companies to pay $83,600, including $41,000 each to SOS Racisme, the group that had brought the complaints.

SOS Racisme Vice Chairman Samuel Thomas called the decision a "very great victory."

"Whatever the size of the company, none is able to escape prosecution," he said.