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U.S. markets close mixed Wednesday

NEW YORK, Feb. 3 (UPI) -- U.S. markets were mixed Wednesday after Automatic Data Processing Inc. said 22,000 jobs were lost in December.

The movement in the labor market included 60,000 fewer jobs in the goods-producing sector and 38,000 additional service-oriented jobs.

While the economy was still shedding jobs, it was the smallest monthly decrease in employment reported by ADP in two years. January losses were also revised from a previous estimate of 84,000 jobs lost to 61,000.

Investors took the news as encouraging, but not positive.

By close, the Dow Jones industrial average lost 0.26 percent, 26.30 points, to 10,270.55. The Standard & Poor's 500 dropped 0.55 percent, 6.04 points, to 1,097.28. The Nasdaq composite index rose 0.04 percent, 0.85 points, to 2,190.91.

On the New York Stock Exchange, 1,162 stocks advanced and 1,856 declined on a volume of 4.2 billion shares traded.

The benchmark 10-year U.S. Treasury bill fell 17/32 to yield 3.705 percent.

The euro fell to $1.3896 from Tuesday's $1.3965. Against the yen, the dollar rose to 90.95 yen from Tuesday's 90.38 yen.

In Japan, the Nikkei 225 index added 0.32 percent, 33.24 points, to 10,404.33.

In Britain, the FTSE 100 index lost 0.57 percent, 30.16, to 5,253.15.

AIG says pay issue is 'largely' solved

NEW YORK, Feb. 3 (UPI) -- U.S. insurance giant American International Group Inc. said it would reduce bonus payments by $20 million to recoup part of a pledge it failed to keep.

After receiving billions of dollars in taxpayer bailout funds, AIG's bonus pay plan of $165 million a year ago sparked an uproar in Washington. At that point, employees -- notably those in the financial product division that lost billions of dollars on credit default swaps -- agreed to return $45 million of their bonus pay, The Wall Street Journal reported Wednesday.

But employees only returned $19 million.

This year, with $195 million in the bonus pool, the company said it had secured an agreement with current and former employees to reduce that by $20 million. AIG also said it would work to recoup another $6 million.

A representative for the U.S. Treasury Department said the department is "encouraged that AIG employees are making good on the repayment pledges they made last spring."

But U.S. Rep. Darrel Issa, R-Calif., said, "Either the payments are justified and the (Obama) administration has an obligation to explain that … or they are not and they should come forward and say so."

AIG said this year's deal with employees "allows us to largely put the matter behind us."

Prius emerges as new concern for Toyota

WASHINGTON, Feb. 3 (UPI) -- Braking problems in the 2010 Toyota Prius have surfaced as another problem for the Japanese automaker that recalled 2.3 million U.S. vehicles in January.

There is no recall listed for the gas-electric hybrid, but the 140 complaints registered with the National Highway Traffic Safety Administration concerning brakes and gas pedals for the 2009 Prius were more than triple the number of complaints from the previous year's model, the Detroit Free Press reported Wednesday.

The Japanese government has ordered the company to investigate a brake problem with the 2010 Prius, The New York Times reported.

The NHTSA has not opened a formal investigation in the Prius, the Free Press said.

The hybrid car is equipped with a regenerative braking system, which transfers energy from the slowing car to the electrical system. The most common complaint at the NHTSA concerns brakes that hesitate to respond after the car hits a bump.

"It makes it impossible to safely judge your braking distance in order to come to a safe stop, because you never know when this phenomenon will occur," one complaint read.

Foreclosures rising as a quick fix option

WASHINGTON, Feb. 3 (UPI) -- The foreclosure crisis is still bubbling away underneath improvements in the U.S. economy, a private research group said.

First American CoreLogic said that number of homeowners with property values dropping below 75 percent of what they owe on their mortgages would rise from 4.5 million in the third quarter of 2009 to 5.1 million in the second quarter of 2010, The New York Times reported Wednesday.

The 75 percent figure is seen as critical -- a point where many homeowners give up their mortgages, the Times said.

"We're now at the point of maximum vulnerability. People's emotional attachment to their property is melting into the air," said Sam Khater, a senior economist at CoreLogic.

The stressed homeowners include Benjamin Koellmann, who said it would take until at least 2025 before he could break even selling a Miami Beach property he bought in 2006.

"People like me are beginning to feel like suckers. Why not let it go in default and rent a better place for less?" Koellmann asked.

A federal solution may not be around any immediate corner. "We haven't yet found a way of dealing with this that would, we think, be practical on a large scale," Herbert Allison Jr., assistant Treasury secretary for financial stability, said recently.