UPI NewsTrack Business

Markets recover on credit, jobs data

NEW YORK, Feb. 5 (UPI) -- U.S. markets, buoyed by consumer credit data, recovered Friday and the Dow Jones industrial average closed above 10,000 points.

The Labor Department said unemployment dropped to 9.7 percent in January from 10 percent. Markets turned lower early, but rebounded in the afternoon on a better-than-expected report on December consumer credit.

At the close, the Dow Jones industrial average was up 10.05 points, or 0.1 percent, to 10,012.23. The Standard & Poor's 500 gained 3.08 points, or 0.29 percent, to 1,066.19. The Nasdaq composite index rose 15.69 points, or 0.74 percent, to 2,141,12.

On the New York Stock Exchange, 1,326 shares advanced and 1,740 declined on a volume of 1.56 million shares traded.

The benchmark 10-year U.S. Treasury bill rose 15/32 to yield 3.57 percent.

The euro fell to $1.3676 from Thursday's $1.3741. Against the yen, the dollar rose to 89.228 yen from Thursday's 88.93 yen.

In Japan, the Nikkei 225 index lost 2.89 percent, 298.89, to 10,057.09.

In Britain, the FTSe 100 index lost 1.53 percent, 78.39, to 5,060.92.

Unemployment rate falls to 9.7 percent

WASHINGTON, Feb. 5 (UPI) -- The U.S. unemployment rate fell unexpectedly in January to 9.7 percent from 10 percent with some sectors adding jobs, the Department of Labor said Friday.

The department said construction, transportation and warehousing lost jobs, but retail and temporary jobs rose leaving non-farm employment "essentially unchanged," with a loss of only 20,000 jobs in the month.

Economists predicted the jobless rate would hold at 10 percent.

The Labor Department said the number of workers who cannot find jobs after 27 weeks of looking "continued to trend up" in the month, putting discouraged workers at 6.3 million, a gain of 5 million since December 2007 at the start of the recession.

During the month, construction lost 75,000 jobs, transportation and warehousing 19,000. Manufacturing added 11,000 positions, while jobs in the automotive industry swung higher, up by 23,000.

Retail businesses added 42,000 jobs in the month.

The average workweek rose by 0.1 hour to 33.9 hours. Hourly earnings in January rose by 0.2 percent or four cents per hour.

Consumer borrowing declines in December

WASHINGTON, Feb. 5 (UPI) -- U.S. consumer borrowing fell by $1.8 billion in December, or 0.8 percent, the 11th straight monthly decline, the Federal Reserve reported Friday.

The decline was a fraction of the November rate, which was revised downward to $21.8 billion, or a 10.6 percent decrease.

For all of 2009, consumer debt fell 4 percent to $2.46 trillion, compared with $2.56 trillion in 2008. Revolving credit, including credit cards, declined at an 11.7 percent annual rate to $866 billion while non-revolving credit, including student and car loans, rose at a 5.2 percent rate to $1.59 trillion.

Regulators urge small business lending

WASHINGTON, Feb. 5 (UPI) -- U.S. federal regulators Friday urged banks to increase lending to small businesses but to make sure such operations were creditworthy.

In a joint statement issued by the Federal Reserve and the Conference of State Bank Supervisors, the regulators said lenders "should understand the long-term viability of the borrower's business and focus on the strength of a borrowers' business plan to manage risk rather than using portfolio management models that rely primarily on general inputs, such as a borrower's geographic location or industry."

The federal government has come under sharp criticism from voters for what was seen as assistance to Wall Street fat cats that failed to trickle down to Main Street.

The regulators said banks have overreacted to the economic climate, making it difficult for "creditworthy small business borrowers" to obtain financing. They blamed "weakness in the broader economy, decreasing loan demand, and higher levels of credit risk and delinquency."

Toyota president bows and apologizes

TOKYO, Feb. 5 (UPI) -- The president of Toyota Motors Co. bowed at a news conference Friday and apologized for quality control problems that had led to massive Toyota recalls.

"I deeply regret that I have caused concern among so many people. We will do our utmost to regain the trust of our customers," said Akio Toyoda, the grandson of the company's founder, who was handed the reins of the company last year.

Sticking gas pedal problems triggered a recall of 4.2 million vehicles. Congress has scheduled hearings on the issue, on the heels of a problem with brakes in 2010 hybrid Prius models involving 300,000 more cars.

Japan's transport minister, Seiji Maehara, said the defective vehicles "leads me to believe Toyota has not put consumers first," The New York Times reported.

Toyoda said the company is "committed to safety." The company is likely to lose $2 billion on the massive recalls, the Detroit Free Press reported Friday.

In the United States, dealerships reported they had begun repairing gas pedals with a 30-minute procedure.

Ford Motor Co., meanwhile, said it would upgrade software for hybrid Fusion cars that use the same regenerative braking system as the Prius.

The National Highway Traffic Safety Administration has reports of Prius brakes hesitating after hitting bumps or potholes.

In the Fusion, "customers may initially perceive the condition as loss of brakes," Ford said in a statement. The cars, however "maintain full braking capability," Ford said.