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U.S. markets lift with BOE rate unchanged

NEW YORK, Dec. 10 (UPI) -- U.S. markets headed up Thursday morning after the Bank of England said it would leave its bank-to-bank lending rate unchanged at 0.5 percent.

Markets made gains, despite a Labor Department report that said first-time claims for unemployment insurance benefits surged by 17,000 to 474,000 last week.

In late morning trading, the Dow Jones industrial average added 82.23 points, 0.80 percent, to 10,419.28. The Standard & Poor's 500 rose 0.77 percent, 8.45 points, to 1,104.40. The Nasdaq composite index gained 0.70 percent, 15.33 points, to 2,199.06.

The benchmark 10-year U.S. Treasury bill fell 8/32 to yield 3.463 percent.

The euro fell to $1.4714 from Wednesday's $1.473. Against the yen, the dollar rose to 88.29 yen from Wednesday's 87.86 yen.

In Japan, the Nikkei 225 index lost 141.90 points, 1.42 percent, to 9,862.82.

Citigroup presses case to repay government

NEW YORK, Dec. 10 (UPI) -- Sources close to Citigroup said the last Wall Street banking giant with bailout funds on its books has ramped up efforts to repay its $20 billion federal loan.

Citigroup was given $45 billion in bailout funds, but converted $25 billion of that to common stock, giving the government a substantial stake in the company while diminishing the size of its loan.

The New York Times said Thursday that Citigroup Chief Executive Officer Vikram Pandit has asked thefo Treasury for permission to sell new stock, which would raise funds, while diluting its existing share values.

The move would not fully split the bank away from government support, as the government has guaranteed $301 billion worth of Citigroup's frozen assets, a deal the bank paid for with preferred stock.

What happens to that insurance policy is unclear at this point. Sources, however, said Citigroup increased its efforts to negotiate acceptable conditions for selling stock after Bank of America said was granted permission to do the same thing last week.

Shhh: AIG back on top in fixed annuities

NEW YORK, Dec. 10 (UPI) -- American International Group has anonymously climbed back to the top spot in fixed annuity sales, a private U.S. research firm said.

Research firm Kehrer-Limra said Western National Life, an AIG subsidiary, was the top seller of fixed annuities in the third quarter, while the previous leader, New York Life, dropped to third and Transamerica fell to fourth place.

But many customers are no longer aware the annuities they buy are backed by bailed out insurer AIG, where sales slid until Western National and another subsidiary, First SunAmerica, dropped references to AIG on their contracts, The New York Times reported Thursday.

The editor of the Insurance Forum, Joseph Belth, said customers were entitled to know which company was backing their purchases. Competitors, meanwhile, are complaining the federal bailout funds given AIG have allowed it to offer higher teaser rates or bonus rates than it might otherwise afford.

"Some insurers are selling annuities at rates that suggest that they are either building more risk into the investment portfolio than might be prudent, or using this as a way of raising cash," said Gary Wendlandt, chief investment officer and vice chairman of New York Life.

AT&T exec links data load to fees

DALLAS, Dec. 10 (UPI) -- A top executive at U.S. phone gaint AT&T said wireless customers may need to pay rates that vary depending on how much data they demand from the system.

Referring to AT&T's 81.6 million wireless customers, Ralph de la Vega, chief executive of mobility and consumer markets, said "about 3 percent of smart phone customers are driving about 40 percent of the wireless traffic," The Dallas Morning News Online reported Thursday.

"If 3 (percent) are costing 40 percent, then we're going to focus on making sure we give incentives to that small percentage to either reduce or modify their usage so they don't crowd out the other customers," he said at an analyst conference in New York.

De la Vega said video and audio "that plays around the clock" was putting extensive demands on the service. He said heavy use customers needed to "change their pattern or there will be other things they have to do to reduce their usage."

"This is meant not to punish the 3 percent, but to protect the 97 percent until more bandwidth can be brought to bear," industry analyst Jeff Kagan said.