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U.S. markets close mixed Friday

NEW YORK, July 10 (UPI) -- U.S. markets closed flat Friday as investors feared the second quarter's corporate reporting season would be disappointing.

By the closing bell, the Dow Jones industrial average lost 36.65 points, or 0.45 percent, to 8,146.52. The Standard & Poor's 500 fell 0.4 percent, 3.55 points, to 879.13. The Nasdaq composite index was slightly higher, up 3.48 points, 0.2 percent at 1,756.03.

On the New York Stock Exchange, 1,446 stocks advanced and 1,525 declined on a volume of 4.4 billion shares traded.

The benchmark 10-year U.S. Treasury bond rose 32/32 to yield 3.293 percent.

The euro fell to $1.3949, compared to Thursday's $1.4032. Against the Japanese yen, the dollar fell to 92.42 yen, compared to Thursday's 92.95 yen.

In Tokyo, the Nikkei average lost 0.04 percent, 3.78 points to 9,287.28.

In London, the FTSE 100 index dropped 0.76 percent, 31.49 points, to 4,127.17.

Banks set deadline for California's IOUs

SACRAMENTO, July 10 (UPI) -- Several major U.S. banks said Friday would be the last day they would honor IOUs issued by the state of California.

The Golden State, mired in a budget crisis, has been issuing interest bearing registered warrants known as IOUs to taxpayers and local governments in lieu of checks. Last week, the state mailed out 91,000 warrants worth $354 million worth, The Los Angeles Times reported.

But Bank of America, Wells Fargo & Co., and other financial institutions said they were no longer willing to accept the IOUs, which carry a 3.75 percent annual interest rate and mature on Oct. 2.

Wells Fargo spokeswoman Mary Trigg said the bank was "pretty reluctant to accept the warrants in the first place."

Bank of America spokeswoman Britney Sheehan said, "we agreed to help customers and clients on an immediate basis, but it doesn't provide an incentive for the state to reach an agreement if we just accept the IOUs through perpetuity."

Some banks said they would honor the IOUs, perhaps as "an opportunity to differentiate themselves and open their doors to more customers," Henry Kertman, a spokesman for the California Credit Union League said.

About 60 credit unions said they would continue to accept the IOUs, the Times said.

Jolts in a bottle now $700M market

NEW YORK, July 10 (UPI) -- Slugging down quick shots of a concentrated energy drink has now become a $700 million enterprise, a U.S. market research firm said.

Sales of small shots of caffeine-loaded drinks that typically come in 2-ounce bottles has almost doubled from the $370 million in business the energy shots rang up a year ago, Consumer Edge Research reported.

Sales of 16-ounce energy drinks, like Red Bull, have hit a plateau, The New York Times reported Friday. But energy shots are taking off.

Living Essentials, a Michigan firm, controls 80 percent of the market with with its product 5-Hour Energy, Consumer Edge Research said.

But competitors are hot on the trail.

Frequently with a bitter taste, new products like 6 Hour Power and Mr. Energy 9-hour Energy are finding their way into stores.

They typically boast a walloping dose of caffeine and essential vitamins, but New York University nutrition professor Marion Nestle said, "it sounds like a great placebo to me."

"And I'll bet you ask people and they say they feel better. It's got caffeine -- why not?" she said.

China's confidence measure rises

BEIJING, July 10 (UPI) -- China's National Bureau of Statistics said confidence the Chinese economy jumped in the second quarter after sinking to an eight-year low in 2008.

The leading index measuring the country's confidence in the economy jumped from 101.1 in the first quarter to 110.2 in the second. In the final quarter of 2008, the index fell to 94.6.

"There is little doubt that China's economy is now embarking on an upward trend and this is more evidence that China had bottomed out in the first quarter," economist Zhuang Jian at the Asian Development Bank said.

Billionaire investor George Soros said this week, China was on track to becoming, "one of the motors of the world economy," China Daily reported Friday.

On Wednesday, the International Monetary Fund in Washington said China's economy would grow 7.5 percent in 2009 and 8.5 percent in 2010.

Economists are now concerned the government's stimulus spending will push too far.

"As soon as China's consumer price index turns positive, the government should stop its lending spree," Zhuang said.