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U.S. markets advance Friday morning

NEW YORK, Aug. 28 (UPI) -- U.S. markets advanced early Friday after the Commerce Department said consumer spending in July rose 0.2 percent.

The month-to-month increase was in line with expectations and a drop from June's 0.6 percent increase over May.

In late morning trading, the Dow Jones industrial average rose 26.37 points, 0.28 percent, to 9,607.00. The S&P 500 index added 5.81 points, 0.56 percent, to 1,035.22. The Nasdaq composite index gained 1.08 percent, 21.85 points, to 2,048.58.

The benchmark 10-year Treasury fell 11/32 to yield 3.505 percent.

The euro rose to $1.4366 from Thursday's $1.4359. Against the yen, the dollar rose to 93.58 yen from Thursday's 93.50 yen.

In Tokyo, the Nikkei 225 advanced 0.57 points, 0.57 percent, to 10,534.14.

Gov: California plant closure 'a sad day'

FREMONT, Calif., Aug. 28 (UPI) -- Toyota Motors Corp.'s decision to close a Fremont, Calif., production plant was a "sad day" for the state, Gov. Arnold Schwarzenegger said.

Toyota signaled it would end a 25-year relationship with GM called NUMMI -- New United Motor Manufacturing Inc. -- which opened the door for Toyota to build cars in the United States, The Detroit News reported Friday.

"Today is a sad day in the history of Fremont as California joins the ranks of states adversely affected by the bankruptcy of General Motors and the worldwide collapse in demand for automobiles," Schwarzenegger said.

Toyota Executive Vice President Atsushi Niimi said, "We deeply regret having to take this action," which would be the first plant closing for Toyota in the company's 72-year history and the closure of the last large auto assembly plant in California, the News said.

NUMMI employs 4,800 people. The plant is expected to close in March.

The United Auto Workers union offered last-minute concessions to avoid the plant's closure, which UAW President Ron Gettlefinger called "devastating news."

"It's unfortunate the company chose to close a U.S. facility after benefiting so greatly from the federal "cash-for-clunkers" program," he said.

AIG stocks jump, curiously

NEW YORK, Aug. 28 (UPI) -- An unlikely resurgence of American International Group may epitomize the new appetite for risk on Wall Street, an equity analyst at Optique Capital said.

Analyst William Fitzpatrick wondered "who would want to buy stock that's still 80 percent owned by the government?"

On the other hand, he said, "the risk appetite has returned to the marketplace."

There appears to be a willingness among investors to pounce on stock that was beaten down through the economic crisis and may be poised to return to normalcy, or at least head in that direction.

AIG, which received $180 billion in bailout funds, recently replaced Chief Executive Officer Edward Liddy with former MetLife executive Robert Benmosche, who said he frequently talks with former AIG CEO Maurice Greenberg and that he wants to pay the government back as soon as possible, The New York Times reported Friday.

Is that enough to explain a 27 percent jump in share value Thursday?

AIG stocks closed at $47.84, having gone up four-fold in the past two months.

That puts the value of the company at $6.4 billion, far less than it owes the government, the Times said.

Plea points to bribes and blood oaths

HOUSTON, Aug. 28 (UPI) -- Billionaire businessman R. Allen Stanford and the top bank regulator in Antigua took a blood oath in 2003, a court plea agreement in Houston says.

The meeting included cutting wrists and mixing blood, a plea agreement entered by the bank's Chief Financial Officer James Davis said.

The "brotherhood ceremony" Stanford and banking supervisor Leroy King performed was then backed by bribes, The New York Times reported Friday.

Davis' plea agreement says Stanford directed him to manage a Swiss bank account for Antigua's top bank regulator.

Stanford has been charged with operating a Ponzi scheme, using an offshore bank, Stanford International, to sell fraudulent certificates of deposit.

Davis' plea agreement says Stanford's fraudulent practices began at the Guardian International Bank on Montserrat in 1988, the Houston Chronicle reported.

On Thursday, a separate hearing for Stanford was postponed after Stanford was hospitalized due to a racing heartbeat.

Stanford has blamed Davis for any wrongdoing.

After entering a guilty plea in federal court in Houston Thursday, Davis said, "I did wrong. I'm sorry. I apologize. And I take responsibility for my actions."