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Dec. 19, 2012 at 1:23 PM   |   Comments

Stocks flat Wednesday

NEW YORK, Dec. 19 (UPI) -- U.S. stock indexes were flat Wednesday after the Commerce Department said housing starts dropped 3 percent October to November.

The report was issued a day after the National Association of Home Builders said Tuesday business confidence among builders had risen for the eighth consecutive month in December.

General Motors stock bucked the trend. The Treasury Department said it would sell its 500.1 million shares of GM, including a sale of 200 million shares by the end of the year to GM for $27.50 per share.

GM stock shot up 8.24 percent to $27.59 in early afternoon trading.

The Dow Jones industrial average dropped 17.31 points or 0.13 percent to 13,333.65. The Standard and Poor's 500 was off 3.59 points or 0.25 percent to 1,443.20. The tech-heavy Nasdaq composite was flat, up 0.23 points or 0.1 percent to 3,054.76.

In Tokyo, the Nikkei 225 index soared, adding 237.39 points, 2.39 percent, to 10,060.40.

In London, the FTSE 100 index added 0.43 percent, 25.69 points, to 5,961.59.

The benchmark 10-year U.S. Treasury note rose 8/32 to yield 1.796 percent.

The dollar rose to 84.44 yen, up from Tuesday's 84.2 yen. The euro rose to $1.343 from Tuesday's $1.3229.


UBS to pay $1.5B to settle Libor charges

WASHINGTON, Dec. 19 (UPI) -- Swiss bank UBS said Wednesday it would pay $1.5 billion to settle charges it attempted to manipulate critical benchmark interest rates.

The settlement involves U.S. and British authorities and is meant to cover malfeasance that spanned from 2005-10, The New York Times reported.

Authorities contend throughout that period, the bank falsified reports that were used to set the Libor or London interbank offered rate, which is the average rate banks charge when they loan money to other banks.

The settlement approaches the record $1.9 billion fine announced last week against HSBC for money laundering.

Last summer, British bank Barclays announced it would pay $450 million to settle charges it had attempted to manipulate the Libor. Several other major banks are also under investigation for manipulating rates.

The Libor is used as a benchmark that determines the interest rate on trillions of dollars in commercial and consumer loans.

Authorities said supervisors at a UBS unit in Japan "inappropriately gave guidance to those employees charged with submitting interest rates, the purpose being to positively influence the perception of UBS' creditworthiness."

Authorities said the interest rates were changed in an attempt to squeeze more profits from loans, but also to make the bank appear healthier than it was, as low interest rates are a sign of strength.

With that reasoning, if a bank's borrowing costs are low, then it would be assumed the bank is strong, an image the bank tried to project during the financial crisis.

"The findings we have set out in our notice today do not make for pretty reading. The integrity of benchmarks are of fundamental importance to both U.K. and international financial markets. UBS traders and managers ignored this," said Tracey McDermott, the enforcement director for the Financial Services Authority, the bank regulator in Britain.

In a statement, UBS said it had cooperated with the investigation, which reportedly involves more than a dozen major banks.

"We discovered behavior of certain employees that is unacceptable. We deeply regret this inappropriate and unethical behavior. No amount of profit is more important than the reputation of this firm, and we are committed to doing business with integrity," UBS Chief Executive Officer Sergio Ermotti said in a statement.


Retail sales bounce back in week

WASHINGTON, Dec. 19 (UPI) -- U.S. retail sales jumped in the week that ended Saturday after three weeks of declines, a Washington retail trade group said.

Sales receipts rose 4.3 percent week to week and 3.5 percent from the same week of 2011, the International Council of Shopping Centers-Goldman Sachs weekly consumer tracking survey indicated.

The trade group said the week "launched the second wave of the 2012 holiday-shopping season."

Gains were posted by department stores, discount outlets and dollar stores. Internet sales were also "strong," ICSC said.

An annual survey taken in November and December also revealed 64.9 percent of respondents indicated they had not completed their holiday gift buying.

While an increase from 51 percent in the previous week, during the same week of 2011, 70.3 percent of shoppers surveyed indicated they still had gifts to buy.


Housing starts slid in November

WASHINGTON, Dec. 19 (UPI) -- Residential construction starts fell 3 percent October to November, the U.S. Commerce Department said Wednesday.

Privately owned housing starts in the month came to 861,000 on a seasonally adjusted basis, down from a revised October figure of 888,000 housing starts.

Starts in November, however, were 21.6 percent higher than November 2011.

The department said housing permits for private projects rose to 899,000 in the month, up 3.6 percent from October and up 26.8 percent from the same month in 2011.

Residential project completions totaled 677,000, a 9.7 percent drop from October's revised figure of 750,000, the department said in a release issued jointly with the Department of Housing and Urban Development.

Housing completions were 16.1 percent above November 2011, when 583,000 home projects were completed.

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