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Jan. 17, 2013 at 2:40 PM   |   Comments

U.S. stocks head higher Thursday

NEW YORK, Jan. 17 (UPI) -- The blue chip Dow stock index rebounded Thursday.

The Labor Department provided encouraging news. First-time unemployment benefit claims for the week ending Saturday fell by 37,000 to 335,000, the lowest figure since November 2007.

The Commerce Department said housing starts rose sharply in 2012, climbing 28.1 percent over 2011.

Housing starts are a leading index, as a home sale is often followed by purchase of furniture, appliances, lawn mowers and other household necessities.

In afternoon trading, the Dow Jones industrial average added 112.97 points or 0.84 percent to 13,625.20. The Nasdaq composite index added 24.01 points or 0.77 percent to 3,141.56. The Standard and Poor's 500 gained 11.57 points or 0.79 percent to 1,484.20.

The 10-year treasury note fell 18/32 to yield 1.888 percent.

Against the dollar, the euro rose to $1.3384 from Wednesday's $1.3289. The dollar gained against the yen, hitting 89.84 yen from 88.38 yen.

In Tokyo, the Nikkei 225 index gained 0.09 percent, 9.20 points, to 10,609.64.

In London, the FTSE 100 index added 0.46 percent, 28.38 points, to 6,132.36.


Foreclosure activity declined in 2012

IRVINE, Calif., Jan. 17 (UPI) -- The number of U.S. homes in the process of foreclosure dropped 3 percent in 2012 from the previous year, online marketplace RealtyTrac said Thursday.

The decline is modest compared with the decline from 2010. From the 2.9 million properties involved in foreclosures in 2010, filings have dropped by 36 percent, the firm said.

Including default notices, scheduled auctions and bank repossessions, there were a total of 2,304,941 foreclosure filings reported on 1,836,634 U.S. properties in 2012, RealtyTrac said.

With those numbers, 1.39 percent of all housing units -- one out of every 72 -- were involved in a foreclosure filing in the year, a drop from 1.45 percent in 2011 and from 2.23 percent in 2010.

With many filings derailed by the foreclosure mills controversy that surfaced in 2010, states that require a judicial review for a bank repossession were still catching up with a backlog of foreclosures. As such, in 2012, foreclosure activity increased in 25 states from 2011 -- 20 of which require judicial reviews. In New Jersey, foreclosures increased by 55 percent in the year. In Florida, they rose by 53 percent.

The foreclosure mills controversy involved banks subcontracting foreclosure reviews to firms that were labeled "foreclosure mills," because they processed them so quickly it was judged the banks were cheating homeowners on due process. Several major banks pulled back from proceeding with foreclosures until agreements were reached with prosecutors on how to repay mortgage owners.

In April 2012, five major banks reached a $26 billion deal with prosecutors to settle charges of foreclosure abuses. More recently, 10 U.S. banks reached an $8.5 billion deal and Morgan Stanley and Goldman Sachs on Wednesday struck a $557 million deal to settle foreclosure abuse charges.

The increase in foreclosures in judicial review states was offset by declines in states where foreclosures are handled out of court.

Foreclosure activity dropped in 25 states, 19 of which do not require judicial reviews. In Nevada, foreclosure activity dropped 57 percent. In Utah, foreclosures declined by 40 percent, RealtyTrac said.


Kodak's bankruptcy bills piling up

ROCHESTER, N.Y., Jan. 17 (UPI) -- Storied New York firm Eastman Kodak has spent $125 million on attorneys and accountants after one year in bankruptcy, court papers indicate.

The (Rochester) Democrat and Chronicle reported Thursday medical benefits and insurance coverage for the company's employees came to a halt at the start of the new year, but legal fees continue to pile up.

Kodak has spent almost $22 million on the services of one law firm alone, the newspaper said.

The firm, Sullivan & Cromwell, is charging $1,150 per hour for attorney services and up to $850 per hour for non-attorney services, racking up 900 billable hours and 4,000 billable hours, respectively, records show.

Accounting giant Ernst & Young has earned $13 million in the first year of Kodak's bankruptcy. Corporate restructuring specialist Jim Mesterharm of consulting firm AlixPartners has earned $1.5 million.

On top of its own expenses, Kodak is responsible for paying the bills for legal services provided to creditor committees, a line-item that has cost $3.2 million so far.

In spite of the big numbers, "That doesn't shock me. Bankruptcy's expensive," Martha Salzman, assistant professor of accounting and law at the State University of New York at Buffalo told the newspaper.

"A modern Chapter 11 case is just hugely expensive. It goes in proportion to the size of the company and the complexity of the debt structure," said bankruptcy attorney Robert Rock.

Further, the company is duty-bound to seek outside help.

"You can't have the internal management do it. Theoretically, that's how Kodak got where it is today," said MaryAnn Monforte, clinical assistant professor of accounting at Syracuse University's Whitman School of Management.


New U.S. jobless claims fall sharply

WASHINGTON, Jan. 17 (UPI) -- The U.S. Labor Department said first-time jobless benefits claims dropped to a pre-recession level in the week ending Saturday.

Initial claims for unemployment benefits fell by 37,000 in the week to 335,000, a weekly toll unseen since November 2007, just before the Great Recession became official.

The four-week rolling average for the week was 359,250, a decrease of 6,750 from the previous week's revised average of 366,000.

In the current week, the unadjusted advance number of first-time unemployment benefits claims under state programs totaled 555,708 for the week, an increase of 2,360 from the previous week, the Labor Department said.

For the comparable week of 2012, there were 525,422 initial claims.

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