Eurozone GDP slows U.S. markets
NEW YORK, Feb. 14 (UPI) -- U.S. stock indexes slid Thursday, despite a sharp drop in first-time unemployment benefit claims.
Initial claims for unemployment benefits declined by 27,000 to a seasonally adjusted 341,000, the U.S. Labor Department said.
Stocks were broadly lower in Europe, however, and U.S. markets followed.
Eurostat said the eurozone's gross domestic product in the fourth quarter of 2012 dropped for the third consecutive quarter. The eurozone's economy was flat for the two quarters prior to the downturn, meaning the GDP in the 17-member currency region has not grown for five consecutive quarters.
In late morning trading, the Dow Jones industrial average lost 9.80 points or 0.07 percent to 13,973.11. The Nasdaq composite index shed 1.30 points or 0.04 percent to 3,195.58. The Standard & Poor's 100 dropped 0.36 points or 0.02 percent to 1,519.97.
The 10-year treasury note rose 1 23/32 to yield 2.037 percent.
Against the dollar, the euro fell to $1.3332 from Wednesday's $1.3453. The dollar fell to 93.06 yen from 93.42 yen.
The Nikkei 225 index in Tokyo gained 0.5 percent, 55.87 points, to 11,307.28.
In London, the FTSE 100 index gave up 0.44 percent, 28 points, to 6,331.11.
First-time unemployment claims held above 400,000 from April 2008 through October 2011. Claims spiked up to 451,000 after Hurricane Sandy pummeled the East Coast in late October 2012. They have run steadily below 400,000 since.
Foreclosure filings drop
IRVINE, Calif., Feb. 14 (UPI) -- The number of U.S. homes in the process of foreclosure dropped 7 percent from December to January, online marketplace RealtyTrac said Thursday.
There were 150,864 properties involved in foreclosure in the month, one out of every 869 U.S. housing units, the firms said. Foreclosures includes several levels of distress including default notices, scheduled auctions and bank repossessions.
RealtyTrac Vice President Daren Blomquist said a new homeowner protection law in California that took effect at the first of the year, "profoundly altered," what he called the "foreclosure landscape."
The law, called a Homeowners Bill of Rights, mandates borrowers have a single contact point for all issues related to a mortgage in distress and imposes a fine of $7,500 per loan for lenders in California for unverified document filings related to foreclosures.
"As a result, the downward foreclosure trend in California accelerated into hyperspeed," Blomquist said.
Due to the law, California did not lead the nation in foreclosure filings for the first time since January 2007 when the housing bubble burst.
The monthly tracking report also found foreclosure starts down 11 percent December to January and 20 percent lower than January 2012, reaching a 79-month low.
Bank repossessions declined 5 percent from December and 24 percent from January 2012, also reaching a multiyear low. Bank repossessions have not been this low since February 2008, RealtyTrac said.
The statistics were pushed by a sharp drop in foreclosure starts in California -- down 62 percent from December and down 75 percent from January 2012, the firm said.
American-US Airways announce merger
DALLAS, Feb. 14 (UPI) -- The boards controlling American Airlines and US Airways announced an $11 billion merger Thursday that creates the world's largest airline.
Shareholders of AMR, the parent company of American Airlines, would own 72 percent of the combined company while US Airways shareholders would own the remaining 28 percent, the announcement said.
"Together, we will be even better positioned to deliver for all of our stakeholders, including our customers, people, investors, partners and the many communities we serve," AA President, Chairman and Chief Executive Officer Tom Horton said.
The merger, which faces a few hurdles before completion, would create a combined airline with 94,000 employees, 950 planes, 6,500 daily flights, eight major hubs and total sales of nearly $39 billion.
Among other advantages, the combined airline would be a major customer in the industry. The two companies currently have "firm orders for more than 600 new mainline aircraft."
The announcement said the merger would create "one of the most modern and efficient fleets in the industry."
Among other hurdles to complete the deal, it requires approval from the bankruptcy court. AMR filed for Chapter 11 in November 2011.
The combined carrier, which the announcement calls the New American Airlines, would be based in Dallas-Fort Worth where current AMR Corp. has its headquarters.
Its hub airports, used as transfer points, were expected to combine American's hubs in Dallas, Miami, Chicago, Los Angeles and New York and US Airways' in Phoenix, Philadelphia, Ronald Reagan-Washington National Airport outside the District of Columbia and Charlotte, N.C.
The morning announcement said the two airlines would realize $1 billion of annual savings in the deal, but also touted its expectation of maintaining "all [currently operating] hubs and service to all destinations."
The new American -- taking the No. 1 spot from United Airlines, which merged with Continental Airlines in 2011 -- would be the market leader on the U.S. East Coast and Southwest and in South America but would remain a lesser player in Europe than United and Delta Air Lines, The New York Times said.
The merger was not expected to significantly strengthen American's presence in Asia where it also would trail United and Delta, the Times said.
If the merger is approved, American, United, Delta and Southwest Airlines would control 87 percent of the domestic U.S. airline market, Airline Weekly analyst Seth Kaplan told USA Today.
In Europe, recession digs in
BRUSSELS, Feb. 14 (UPI) -- The eurozone remained in recession in the fourth quarter with five of the largest European economies in decline, Eurostat said Thursday.
The economy of the 17-member eurozone contracted 0.6 percent from the third quarter, the data agency said. In the overall European Union, which has 27 members, the gross domestic product declined 0.5 percent quarter to quarter.
Compared to the fourth quarter of 2011, the eurozone's GDP was down 0.9 percent, while the European Union posted a 0.6 percent decline.
In the fourth quarter, the GDP shrank in the top five European economies. In the largest, Germany, the economy contracted 0.6 percent from the third quarter. In France, it declined 0.3 percent. In Britain, Spain and Italy, the GDP dropped 0.3 percent, 0.7 percent and 0.9 percent, respectively.
The largest drop was in Greece. Compared to the fourth quarter of 2011, the economy in Greece has plunged 6 percent, Eurostat said.
The bright spots were in smaller countries. In Latvia, the GDP was up 5.7 percent compared to the fourth quarter a year earlier. In Slovakia, the GDP rose 1.2 percent over the same period.
But in quarter to quarter growth, only Latvia -- at 1.3 percent -- could muster a climb of more than 1 percent. From the third quarter, among the 19 countries with data available for the fourth quarter, 13 experienced economic contraction, Eurostat said.