UPI NewsTrack Business

U.S. markets recover at close

NEW YORK, Feb. 14 (UPI) -- U.S. markets stocks recovered at the end of the day Tuesday to close slightly higher despite ongoing worries about Greece and disappointing retail figures.

Markets opened lower as Moody's Investors Service downgraded credit ratings for six European countries, including Spain and Italy.

Moody's also put France and Britain on notice that their triple A ratings were in jeopardy. Britain's rating was given a negative status.

The U.S. Commerce Department said retail sales rose 0.4 percent in January after falling flat in December. Excluding automobiles, sales rose 0.7 percent in the month of January.

At the close, the Dow Jones industrial average gained 4.24 points, or 0.03 percent, to close at 12,878.28. The Standard & Poor's 500 index ended down 1.27 point, or 0.1 percent, to 1350.5. The Nasdaq composite index was up 0.44 point, or 0.02 percent, to 2,931.83.

The benchmark 10-year treasury note rose 9/32 to yield 1.92 percent.

The euro fell to $1.3124 from Monday's $1.3187. Against the yen, the dollar rose to 78.43 yen from Monday's 77.57 yen.

In Tokyo, the Nikkei 225 index rose 0.59 percent, 52.89, to 9,052.07.

In London, the FTSE 100 index shed 0.1 percent, 5.83, to 5,899.87.

Moody's warns France and Britain

PARIS, Feb. 14 (UPI) -- Moody's Investor's Service warned France Tuesday that its credit rating could be lowered if the debt problem spreading through Europe is not contained.

The fear of the debt issue spreading further and deeper in the region has already resulted in repeated downgrades of credit scored across Europe. France, however, has the second largest economy in Europe after Germany and is clinging to a top-tier triple A rating, having been downgraded in January by ratings assessment firm Standard & Poor's.

Moody's on Tuesday downgraded the ratings of six other European countries, including Italy and Spain, the EUobserver reported.

In addition, the credit rating service shifted Britain's triple A status to negative, a sure indicator that its top-tier rating is in jeopardy.

British Finance Minister George Osborne said the negative status was a "reality check," that indicated Britain must lower its budget deficit.

"This is proof that, in the current global situation, Britain cannot waver from dealing with its debts," he said.

France has already begun to take steps to reduce its deficit and remains "determined to press ahead with its actions to boost growth and competitiveness, notably the reform of the financing of welfare, of employment and the reduction of public deficits," finance minister Francois Baroin said in a statement.

Spain already heard this week that S&P and the third big ratings firm Fitch's lowered ratings on four of the country's largest banks, including Santander, the largest bank by market capitalization in the 17-member eurozone.

"The downgrade of Spain indicates a weakening of its ability to support its largest banks," Fitch said in a statement.

Geithner defends cuts, hints at tax reform

WASHINGTON, Feb. 14 (UPI) -- U.S. Treasury Secretary Timothy Geithner says significant budget cuts necessary to reduce the deficit will be phased in gradually to protect economic recovery.

Geithner defended President Obama's budget plan Tuesday in testimony before the Senate Finance Committee. He said cutting spending too deeply or too soon "would damage the economy in the short-term, impede our ability to make necessary investments for long-term growth, and achieve deficit reduction at the expense of the most vulnerable Americans, including seniors and the poor."

Geithner said a corporate tax reform plan that will be unveiled this month will reduce the large number of loopholes and special interest carve-outs that allow some corporations to avoid paying their fair share of income taxes.

"This creates problems beyond forgone revenue: It forces some businesses to carry a larger share of the tax burden than they would under a more equitable system, and it also hurts overall economic growth by distorting incentives for investment and job creation," he said.

The framework for reforming the corporate tax system will lower the maximum statutory rate and limit the ability of firms to shift profits to low-tax jurisdictions. "In short, it will help level the playing field for businesses and allow the government to collect needed revenue while promoting economic growth."

McDonnell family member sues Boeing

ST. LOUIS, Feb. 14 (UPI) -- A member of the McDonnell aerospace family says he is suing U.S. aircraft maker Boeing for alleged patent infringement.

William "Randy" McDonnell, owner of Missouri-based Advanced Aerospace Technologies, is seeking $160 million from Boeing Co. and Insitu, a Boeing subsidiary that produces unmanned aircraft, for allegedly encroaching on McDonnell's patent for a skyhook retrieval system that enables drones to set down without a runway, the St. Louis Post-Dispatch reported Tuesday.

The lawsuit was filed last week in U.S. District Court in St. Louis.

McDonnell says he provided his patented technology to Insitu, which then incorporated it into its various unmanned aircraft systems. Insitu and Boeing have never paid any royalties or other amounts to McDonnell's company for their use of the inventions, McDonnell said Tuesday in a release.

Boeing denied the allegations, the newspaper said.

McDonnell said most of Insitu's and Boeing's revenues from the unmanned aerial systems have been generated from the sale of services to the United States and foreign governments, with Boeing and Insitu maintaining ownership of the systems. In some cases, however, the hardware has been sold to the U.S. government, attorneys for Advanced Aeropsace Technologies said..

McDonnell's company has filed a companion lawsuit in Washington against the U.S. government to recover royalties due on those sales "to whatever extent that it can be shown that, in accepting such hardware, the government authorized and consented to the infringement," attorneys said in a release.

McDonnell is the son of Sanford McDonnell, chief executive and chairman of McDonnell Douglas from 1972 to 1988, and a cousin of John McDonnell, a former McDonnell Douglas chief executive and chairman who guided the corporation through its merger with Boeing and still holds a seat on Boeing's board of directors, the newspaper said.