UPI NewsTrack Business

U.S. markets off slightly Tuesday

NEW YORK, Nov. 24 (UPI) -- U.S. markets put on the brakes Tuesday after the Commerce Department lowered its third-quarter gross domestic product estimate.

Commerce said higher imports and smaller business inventories contributed to the revision. A month ago, Commerce put the GDP at 3.5 percent for the third quarter. On Tuesday, it released a revised figure of 2.8 percent.

By close, the Dow Jones industrial average lost 17.24 points, 0.16 percent, to 10,433.71. The Standard & Poor's 500 lost 0.05 percent, 0.59, to 1,105.65. The Nasdaq composite index lost 0.31 percent, 6.83, to 2,169.18.

On the New York Stock Exchange, 1,386 stocks advanced and 1,628 declined on a volume of 3.7 billion shares traded.

The benchmark 10-year Treasury rose 11/32 to yield 3.314 percent.

The euro fell to $1.4962 from Monday's $1.4969. Against the yen, the dollar fell to 88.52 yen from Monday's 88.97 yen.

In Japan, the Nikkei 225 index came off a bank holiday with a 1.01 percent slide, 96.10 points, to 9,401.58.

In Britain, the FTSE 100 index lost 0.59 percent, 31.54, to 5,323.96.

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Lending dropped sharply in third quarter

WASHINGTON, Nov. 24 (UPI) -- The Federal Deposit Insurance Corp. said Tuesday U.S. bank lending had declined for the fifth consecutive quarter, July through September.

The drop in lending, down 2.8 percent in the quarter, was the largest single-quarter decline since 1984, The Washington Post reported.

Lending dropped further on average at larger banks, despite larger banks accepting the lion's share of federal bailout funds that was meant to spur lending.

"We need to see banks making more loans to their business customers," FDIC Chairwoman Shela Bair said.

In the third quarter, lending declined in every category of loan with the drop taking a potential $210.4 billion in loans out of the economy.

While loans declined, the FDIC said banks posted a total profit of $2.8 billion in the third quarter, a gain from the second quarter, when banks lost $4.3 billion.

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Insurance fund for bank deposits turns red

WASHINGTON, Nov. 24 (UPI) -- An increase in U.S. bank failures put the federal fund that guarantees consumer deposits in the red in the third quarter, a report released Tuesday showed.

Bank deposits are still insured, as much of the loss in the fund involves money set aside for future losses, but the account is now listed as a negative $8.2 billion, the first time it has been below zero since the savings and loan crisis in the early 1990s, The New York Times reported.

The negative balance was expected. The Federal Deposit Insurance Corp. said in October the fund was in jeopardy.

Bad loans continue to plague the industry, with the FDIC placing 552 banks on its list of lenders at risk of failure, up from 416 in the second quarter. Banks, however, earned $2.8 billion in the third quarter after losing $3.7 billion in the second quarter, the FDIC said.

"The credit adversity we have been discussing for some time remains with us, and we expect it will be a couple of more quarters before we see a meaningful improvement," FDIC Chairwoman Sheila Bair said.

"I am optimistic that if we address these problems head on, we will see clear signs of improvement in bank earnings and lending in 2010."

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FAA fines airlines for stranding

WASHINGTON, Nov. 24 (UPI) -- Federal aviation regulators fined three airlines $175,000 Tuesday for stranding passengers overnight in a plane in Rochester, Minn., officials said.

The penalty is the first by the Federal Aviation Administration involving passengers being left on the tarmac for an unreasonable period, The Wall Street Journal reported. The companies involved are Continental Airlines and ExpressJet, a Continental feeder, as well as Mesabi Airlines, a Minnesota-based Delta subsidiary.

Flight 2816 was carrying 47 passengers from Houston to Minneapolis in August when thunderstorms forced the crew to divert to Rochester. FAA officials said a Mesabi employee refused to reopen the terminal after the airport closed for the night to allow the passengers to leave the plane.

Continental and ExpressJet agreed to pay a total penalty of $100,000 while Mesabi is to pay $50,000. The settlement ends the FAA investigation.

"I hope this sends a signal to the rest of the airline industry that we expect airlines to respect the rights of air travelers," DOT Secretary Ray LaHood said in a statement.

The Mesabi employee said passengers could not enter the terminal as there were no Transportation Security Administration personnel on duty. But passengers could have entered what is known as the "sterile" areas of the airport, the DOT said.