UPI NewsTrack Business

U.S. markets head higher

WASHINGTON, March 1 (UPI) -- U.S. markets made early gains Monday after the Department of Commerce said consumer spending rose 0.5 percent in January.

Personal incomes rose 0.1 percent in the month and savings slowed, the department said. In Europe, talk of a international help to support Greece's effort to reduce its national dept also gave investors more confidence.

In late morning trading, the Dow Jones industrial average added 76.56.12 points, 0.74 percent, to 10,401.82. The Standard & Poor's 500 added 9.76 points, 0.88 percent, to 1,114255. The Nasdaq composite index rose 1.32 percent, 29.60 to 2,267.86.

The benchmark 10-year Treasury was unchanged, yielding 3.619 percent.

The euro fell to $1.353 from Friday's $1.3617. Against the yen, the dollar rose to 89.13 yen from Friday's 88.84 yen.

In Japan, the Nikkei 225 index rose 0.45 percent, 46.03, to 10,172.06.

Euro gains on Greek rescue talks

FRANKFURT, Germany, March 1 (UPI) -- The euro rose Monday while finance ministers worked on details of an agreement to bail out debt-burdened Greece.

The euro went from $1.3616 to $1.3622 and gained against the yen, reaching 121.66 yen from 121 yen on reports that European banks would buy about $40 billion in Greek debt that would help the country meet its obligations through May.

Germany, with the largest economy in Europe, is sure to be a major player in any rescue effort, even after German Chancellor Angela Merkel said a bailout was "not the case."

"We've got a treaty that does not include any provision for bailing out states. We can best help Greece by making clear that Greece does its own homework, just like it is doing at the moment," Merkel said in a Wall Street Journal report.

The Purchasing Managers Index for the eurozone rose from 54.1 to 54.2 in February, the highest level since August 2007.

"It does appear that the manufacturing sector is one of the region's bright spots at the moment," said Howard Archer, chief European economist with IHS Global Insight.

AIG sells Asian business AIA for $35.5B

NEW YORK, March 1 (UPI) -- American International Group said Monday it would sell American International Assurance to British Prudential for $35.5 billion.

AIG said the sale would include $25 billion in cash that would allow it to repay $16 billion to the New York Federal Reserve Bank, to date the largest single payment in its effort to pay down its government bailout debt of more than $180 billion.

"This transaction, the most significant milestone to date in our ongoing effort to repay taxpayers, also gives us greater flexibility to move forward with AIG's restructuring," AIG President and Chief Executive Officer Bob Benmosche said in a statement.

The purchase of AIA, which is based in Hong Kong, gives the 160-year-old British firm a far larger presence in Asia, where it already has 11 million insurance policies, The New York Times reported.

AIA has 23,500 employees and 23 million customers in 15 Asian markets, AIG said.

Canadian economy outperforms 4Q forecast

OTTAWA, March 1 (UPI) -- Canada's economy surpassed fourth-quarter expectations as gross domestic product figures rose 1.2 percent, Statistics Canada reported Monday.

Despite the global recession, the three months ending 2009 marked the largest quarterly increase since the third quarter of 2000, the agency said.

"For a third consecutive quarter, growth in final domestic demand was led by increases in personal expenditures, government expenditures and investment in residential structures," StatsCan said. "Export and import volumes both rose for a second consecutive quarter, with growth in exports outpacing that of imports in the fourth quarter."

The costs of goods and services produced in Canada dropped 1.9 percent in 2009, led by "significant price decreases" for gasoline, crude petroleum and natural gas, the report said.

On a monthly basis, the GDP in December grew 0.6 percent from November, the agency said.