Market gains fizzle
NEW YORK, Dec. 27 (UPI) -- U.S. market gains were held in check Tuesday by a home price report and news Sears Holdings expects to close 100 to 120 Sears and Kmart stores.
The quarter-to-date decline was largely due to poor consumer electronics and home appliance sales, the company said in a statement. Retail, however, is supposed to shine in the fourth quarter. Promising early market gains were tempered by the news.
The S&P/Case-Shiller home price report said 19 of 20 cities monitored experienced price declines in October.
By close of trading on Wall Street, the Dow Jones industrial average settled down from initial gains to shed 2.65 points, 0.02 percent, to 12,291.35.
The Standard & Poor's 500 index added 0.10 points, 0.01 percent, to 1,265.43. The tech-heavy Nasdaq composite index gained 6.56 points, 0.25 percent, to 2,625.20.
On the New York Stock Exchange, 1,543 stocks advanced and 1,460 declined on a light volume of 1.9 billion shares traded.
The benchmark 10-year treasury note rose 8/32 to yield 2.005 percent.
The euro rose to $1.3071 from $1.306. Against the yen, the dollar fell to 77.87 yen from 77.97 yen.
In Tokyo, the Nikkei 225 index shed 0.46 percent, 38.78, to 8,440.56.
In London, the FTSE 100 index gained 1.02 percent, 55.73, to 5,512.70.
Detroit warned about bankruptcy option
DETROIT, Dec. 27 (UPI) -- Bankruptcy experts said Detroit should choose a path other than seeking court protection, which would be costly in terms of time and money.
The city would lawyer up. The unions would lawyer up. Creditors would also seek legal advice, "so you're talking tens of millions of dollars in legal fees," said Ray Graves, a retired U.S. bankruptcy judge, The Detroit News reported Tuesday.
"I'll guarantee you this: It's not going to be a quick in-and-out of bankruptcy that we saw with GM and Chrysler. That's not going to happen," he said.
In Michigan, a financial emergency plan for counties and municipalities that passed into law in March allows the governor to appoint an emergency manager to take over a local government's finances if solutions prove elusive.
If an emergency manager is appointed, he or she would have the authority to tear up contracts with unions and would be the only one who can file for bankruptcy on a city's behalf.
The object, however, is to avoid bankruptcy if at all possible.
"This emergency manager law is really set up to accomplish what you can do in bankruptcy without having to file for bankruptcy," said Brad Coulter, a municipal turnaround expert at O'Keefe & Associates Consulting.
"That's how you would do it the proper way, versus fighting until the end until you have no choice but to do an EM or file (Chapter 9)," he said.
For now, the governor's office, the state Treasury Department and Detroit Mayor Dave Bing's office are refusing to speculate on whether or not Detroit, with $12 billion long-term liabilities, would actually be forced to file for court protection.
Currently, the mayor is seeking concessions with each of the city's 48 unions, the News said.
"As Mayor Bing has repeatedly said, the remedy for the city's financial crisis is his plan that seeks $102 million in savings for this fiscal year, including structural reforms in health care and pensions, layoffs and other cuts," said Bing's Chief of Staff Kirk Lewis.
"Speculating on worst-case scenarios … is not productive nor is it something we're focused on," he said.
Obama nominates two for Fed board
WASHINGTON, Dec. 27 (UPI) -- President Obama Tuesday nominated one Washington insider and one academic to serve on the Board of Governors of the U.S. Federal Reserve.
Obama tapped former Undersecretary of the Treasury for Finance Jerome Powell and Harvard University economics Professor Jeremy Stein, the White House said in a statement.
"I am grateful that these individuals have agreed to serve their nation at this important time for our economy," Obama said, pointing to "their distinguished backgrounds and experience coupled with their impressive knowledge of economic and monetary policy."
Powell is currently a visiting scholar at the Bipartisan Policy Center in Washington. He worked in the Treasury under former President George H.W. Bush with responsibility for policy on financial institutions and treasury debt, the statement said.
Prior to that, Powell worked as an investment banker and attorney in New York.
Stein is currently the Moise Y. Safra professor of economics at Harvard University. Prior to Harvard, Stein, before 2000, was on the finance faculty at M.I.T.'s Sloan School of Management for 10 years.
The nominations have to be approved by the U.S. Senate. Obama has had mixed responses to his nominations for the Fed board. His nomination of Nobel Prize-winner Peter Diamond ran into opposition and was withdrawn. However, his nominations of Janet Yellen and Sarah Bloom Raskin were confirmed.
Tourism on pace for record year
WASHINGTON, Dec. 27 (UPI) -- Foreign visitors spent $13.1 billion to see the sights while visiting the United States in October, the U.S. Office of Travel and Tourism Industries said.
Expenditures on transportation and tourism jumped 13 percent over October 2010, putting tourism in a rare category of an industry doing better than it did before the recession, the Los Angeles Times reported Tuesday.
For the year, the industry is expected to take in a record $152 billion.
On the flip side, Americans traveling abroad for the first 10 months of 2011 spent $91.9 billion, an 8 percent jump over January through October of 2010.
