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UPI NewsTrack Business

  |   May 24, 2012 at 9:04 PM
U.S. markets mixed at the close

NEW YORK, May 24 (UPI) -- U.S. stocks closed mixed Thursday as worries persisted that Greece may be forced to leave the eurozone and economic data from Washington were uneven.

Financial leaders in Europe agreed this week to work on individual contingency plans for a possible exit of Greece from the 17-member currency region, which would be an unprecedented step. At a summit meeting that ended late Wednesday, leaders failed to agree on a new proposal to create a region-wide euro bond.

The Labor Department in Washington said Thursday there were 2,000 fewer first-time jobless claims filed in the week, with the total dropping to 370,000 initial claims. The Commerce Department reported durable goods orders rose 0.2 percent in April to $215.5 billion, which was short of the 0.7 percent increase economists expected.

By close of trading on Wall Street, the Dow Jones Industrial Average was up 33.60 points, or 0.27 percent, at 12,529.75. The Standard & Poor's 500 added 1.82 points, or 0.14 percent, to 1,320.68. The Nasdaq Composite shed 10.74 points, 0.38 percent, to 2,839.38.

On the New York Stock Exchange, 1,760 stocks rose and 1,274 declined on a volume of 3.5 billion shares traded.

The benchmark 10-year treasury note rose 1/32 to 1.777 percent.

The euro fell to $1.2542 from Wednesday's $1.2582. Against the yen, the dollar rose to 79.56 from Wednesday's 79.49 yen.

In Tokyo, the Nikkei 225 index was flat, gaining 0.08 percent, 6.78 points, to 8,563.38.

In London, the FTSE 100 index rose 1.59 percent, 83.64, to 5,350.05.


Homeowners 'underwater' by $1.2 trillion

SEATTLE, May 24 (UPI) -- U.S. homeowners owed $1.2 trillion more on their homes than the homes were worth at the end of the first quarter, real estate Web site Zillow said Thursday.

The company said 31.4 percent of U.S. homeowners were "underwater," which is the trade term describing homes for which the value has fallen below what is owed the lender for the property.

"Negative equity remained high despite increasing home values in the latter part of the first quarter," Zillow said, pointing to "a slower pace of foreclosures after the robo-signing issues of 2010," as part of the reason the underwater rate has remained stubbornly high.

In contrast to previous years, in which many homeowners walked away from mortgage commitments to avoid monthly payments on a losing proposition, homeowners now appear willing to stick it out, Zillow said.

"Despite the high rate of negative equity, the majority of underwater homeowners are current on their mortgages. Nine in 10 continue to make their mortgage and home loan payments on time, with just 10.1 percent of underwater homeowners more than 90 days delinquent," Zillow reported.

While that could be explained by rising hope that home values could be turning higher, for the moment, at least, "many homeowners in negative equity are not deeply underwater," Zillow said.

Nearly 40 percent of underwater homeowners owe 1 percent to 20 percent more than their homes are worth, Zillow said.


U.S. banks in quarter earned $35.3 billion

WASHINGTON, May 24 (UPI) -- U.S. banks earned $35.3 billion in profits in the first three months of the year, a federal regulator said.

The Federal Deposit Insurance Corp., said profits rose by $6.6 billion from the first quarter of 2011, a 22.9 percent rise.

Average return on assets rose above 1 percent for only the second time out of the past 19 quarters.

Income for banks, however, has improved compared to the same quarter of the previous year for 11 consecutive quarters, the FDIC said.

In the first quarter, 67.5 percent of the country's banks and savings institutions reported year-over-year gains in earnings with only 10.3 percent of banks losing money in January through March, the lowest level since the second quarter of 2007.

In a sharp turnaround, only 16 banks out of 7,307 failed in the first quarter, the smallest number of failures since the fourth quarter of 2008, when 12 banks failed.

The agency's ominous "Problem list," which keeps track of banks in trouble, dropped from 813 banks to 772 in the quarter. Total assets among "problem" banks dropped from $319 billion to $292 billion in the quarter.


Bahrain invests in the energy sector

MANAMA, Bahrain, May 24 (UPI) -- The government of Bahrain said it plans to invest $10 billion in its energy sector and attract $10 billion more from outside investors in the next 15 years.

"The Middle East, in addition to its role of being the leading producer of oil and gas in the world, is becoming one of the fastest growing areas of demand," Bahrain Energy Minister Abdulhussain Mirza told reporters Thursday.

"While demand in the region accounted for 6.6 percent of world consumption in 2000, today it represents just over 9 percent. It is estimated that by 2015, about $530 billion will be invested in the energy industries in the Middle East."

The newspaper Trade Arabia said Bahrain was looking at its refining capacity to give it a competitive advantage and better position it to capture the future opportunities.

Mirza also announced in keeping with Bahrain's desire to meet environmental standards, the state had invested in two renewable energy projects.

"Two plants, generating five megawatts of electricity each, based on solar and wind technologies will be set up soon," Mirza said.

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