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Markets turn higher

NEW YORK, June 12 (UPI) -- U.S. stock indexes scratched for higher ground Tuesday as investors remained focused on the financial crisis in Europe.

After accepting a $125 billion bailout on behalf of its banks over the weekend, Spain saw its yields on its 10-year benchmark government bonds rise Monday. Yields also rose Monday in Italy, where there is fear that the spreading crisis in confidence could accelerate.

In early afternoon trading, stock markets rose in New York, the Dow Jones industrial average gaining 111.03 points, 0.89 percent, to 12,522.26.

The Nasdaq composite index added 20.43 points or 0.73 percent to 2,830.16.

The Standard and Poor's 500 gained 9.37 points or 0.72 percent to 1,318.30.

The benchmark 10-year treasury note fell 19/32 to yield 1.652 percent.

The euro rose to $1.2509 from Monday's $1.2482. Against the yen, the dollar held steady at 79.44 yen.

In Tokyo, the Nikkei 225 index lost 1.02 percent, 88.18 points, to 8,536.72.

In London, the FTSE 100 index rose 0.76 percent, 41.37, to 5,473.74.

EC, BIS chiefs call for EU banking union

BRUSSELS, June 12 (UPI) -- The European Union's big banks should join together in a cross-border banking union supervised by a single controller, the European Commission chief said.

Such a union is needed if the 27-member European Union -- which is supposed to be an economic and political union -- is to learn the lessons of the sovereign debt crisis, commission President Jose Manuel Barroso said as the French central bank governor and chairman of an international "bank for central banks" called for a similar EU banking union.

Barroso told the Financial Times the EU needed to move beyond incremental measures and take "a very big step" toward broad financial integration.

"I think now we have conditions to go further that, frankly, we did not have before," he told the newspaper.

The banking union -- which would include an EU-wide deposit-guarantee organization like the U.S. Federal Deposit Insurance Corp., as well as a rescue fund paid for with bank levies -- could be achieved next year, Barroso said, adding he didn't think it would require EU treaty changes.

Germany, Europe's largest economy, has insisted such measures can only come about with a legal overhaul.

German Chancellor Angela Merkel has also expressed objections to sweeping reforms.

Adopting language Merkel uses to express those objections, Barroso said: "The European project has always made progress step-by-step. We should continue step-by-step, but now we need a very big step.

"Either Europe makes a step forward or there is a risk of fragmentation," he said.

Great Recession erases 20 years of wealth

WASHINGTON, June 12 (UPI) -- The Great Recession erased two decades of American wealth in three years, with a typical family's net worth falling nearly 40 percent, the Federal Reserve said.

A median family's net assets plunged to $77,300 in 2010 from $126,400 in 2007, the Fed said in its Survey of Consumer Finances, issued every three years.

The survey is widely considered one of the broadest and deepest sources of information about the financial health of U.S. families.

The wealth loss put Americans in 2010 roughly on par with where they were in 1992, when a gallon of gasoline cost an average $1.05, Bill Clinton became president, Prince Charles and Princess Diana separated, Microsoft Corp. released Windows 3.1 and "Home Alone 2: Lost in New York" was a box-office hit.

"It's hard to overstate how serious the collapse in the economy was," Moody's Analytics Chief Economist Mark Zandi told The Washington Post. "We were in free fall."

Young middle-age families, headed by people ages 35 to 44, were hardest hit, the Fed said. Their median net worth fell 54 percent to $42,100 in 2010.

A crash of housing prices directly accounted for three-quarters of the 2007-2010 loss, the Fed report said.

The median value of Americans' stake in their homes fell 42 percent between 2007 and 2010, to $55,000, according to the Fed.

Median family income fell 8 percent to $45,800 in 2010 from $49,600 in 2007, the report said, adjusting all figures for inflation.

The portion of families putting money into savings fell to 52 percent from 56.4 percent. Fewer said they were saving for retirement, or for education, or for a down payment on a home.

Fewer families also said they carried credit-card balances -- or even credit cards.

The median credit-card balance dropped 16 percent to $2,600 in 2010 from $3,100 in 2007.

Thirty-two percent of families said they had no cards at all, up from 27 percent in 2007.

But the share of families with education-related debt rose to 19.2 percent from 15.2 percent in 2007, the report said.

Confidence index hits low for the year

RAMSEY, N.J., June 12 (UPI) -- A monthly index of consumer optimism showed U.S. consumer confidence hit a low for the year in June.

The Economic Optimism Index, released by the Investor's Business Daily TechnoMetrica Institute of Policy and Politics, showed consumer sentiment about economic conditions fell by 1.8 points or 3.7 percent from May to June, with the index reaching 46.7.

The index is 2.6 points above its 12-month average of 44.1, IBD/TIPP reported.

The index is derived from a national survey that included more than 900 interviews conducted in the first week of each month. The results carry a margin of error of plus or minus 3.3 percentage points.

The Economic Optimism Index includes three components: the Six-Month Economic Outlook, the Personal Financial Outlook and the Confidence in Federal Economic Policies Index. All three components declined in June, IBD/TIPP reported

The Six-Month Economic Outlook Index fell by 7.1 percent to 46.8, off 3.6 points.

The Personal Financial Outlook Index dropped 0.4 percent to 56.1, off 0.2 points.

The Confidence in Federal Economic Policies Index gained fell 4.1 percent to 37.1, off 1.6 points.

"Consumer confidence declined as the high unemployment persists," said Raghavan Mayur, president of TIPP, a unit of TechnoMetrica Market Intelligence, IBD's polling partner.

"According to our survey, 24 percent of households have at least one member of their household unemployed and looking for employment now which translates to approximately 30 million Americans," Mayur said.

Forty-three percent of survey respondents indicated they believed the economy was growing, while 54 percent indicated the economy was shrinking.