UPI NewsTrack Business

Markets start week slow, but head up

NEW YORK, Dec. 7 (UPI) -- U.S. markets opened the week with gains Monday morning on more positive news from the financial sector.

The U.S. Treasury estimates the $700 billion Troubled Asset Relief Program, set up to help banks during the financial crisis a year ago, would cost $200 billion less than expected.

The Treasury estimates $175 billion of $370 billion loaned to companies would be returned by the end of 2010, The New York Times said.

In late morning trading, the Dow Jones industrial average gained 27.73 points, 0.27 percent, to 10,416.63. The Standard & Poor's 500 rose 0.11 percent, 1.24, to 1,107.22. The Nasdaq composite index added 0.04 percent, 0.57 points, to 2,194.92.

The benchmark 10-year U.S. Treasury bill rose 9/32 to yield 3.446 percent.

The euro fell to $1.4795 from Friday's $1.4846. Against the yen, the dollar fell to 89.85 yen from Friday's 90.51 yen.

In Japan, the Nikkei 225 index gained 1.45 percent, 145.01, to 10,167.60.

Treasury more optimistic on bailout costs

WASHINGTON, Dec. 7 (UPI) -- The U.S. Treasury has sharply reduced the cost estimate for the $700 billion bank bailout program that was inherited by the Obama administration.

The Treasury is scheduled to release a report Monday that changes an early projection of a loss of $341 billion to a loss of $141 billion.

Banks have rebounded quicker than expected. The Treasury now says banks in the program have paid $10 billion in dividends and interest and returned $70 billion in principal on the funds loaned through the Troubled Asset Relief Program, The Washington Post reported Monday.

In addition, Bank of America said last week it would return its $45 billion bailout funding soon. The Treasury expects $175 billion will be returned by the end of 2010.

Since President Obama took office in January, the TARP program loaned out $7 billion in addition to more than $350 billion loaned during the Bush administration.

Lending remains tight and unemployment high, giving rise to the perception that Washington came to the aid of wealthy bankers, leaving Main Street to bear the burden of the recovery.

House Minority Leader John Boehner, R-Ohio, quickly called for the $200 windfall to go towards deficit reduction.

Temporary improvement in job sector

NEW YORK, Dec. 7 (UPI) -- Temporary staffing agencies are reporting a lift in business as the U.S. economic recovery has prompted cautious hiring, a Manpower executive said.

"Companies are hesitant to say demand is lasting and they go first to the contract labor market," Manpower Chief Executive Officer Jeff Joerres told USA Today.

Manpower says business rose more than 10 percent in the last quarter, the newspaper reported Monday.

Nelson Staffing, a California agency, said its temporary placements rose 20 percent since October.

Contracted workers, also called contingent workers, can be quickly let go if a project is canceled and typically do not receive health benefits.

Temporary placements are also rising in professional ranks. Barry Acin, chief researcher at Staffing Industry Analysts, said more than half of temporary placements are now professionals. Business Talent Group , which places executives in jobs, said business rose 70 percent April through June this year.

Overall, the Bureau of Labor statistics said Friday that U.S. worker placed in jobs by temporary staffing agencies in November rose by 52,000 from October, the biggest jump since 2004.

Iceland's GDP falls sharply

REYKJAVIK, Iceland, Dec. 7 (UPI) -- Iceland's gross domestic product fell 7.2 percent on an annual basis in the third quarter and 5.7 percent from the second quarter, the government said.

The year-on-year comparison was the largest decline on record, The Times of London reported Monday.

Iceland's economic collapse began last winter, with the failure of its three largest banks, Kaupthing, Landsbanki and Glitnir. Since then, domestic spending has dropped sharply "because there is still no fully functioning financial system," Peter Sandgren, the head of money markets at Swedish banking group SEB.

Separately, both the Organization for Economic Co-operation and Development and the Icelandic government have forecast economic growth would not return to Iceland until at least the end of 2010.