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Feb. 14, 2013 at 6:10 PM   |   0 comments

Markets close flat

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.

By close of trading, the Dow Jones industrial average lost 9.52 points or 0.07 percent to 13,973.39. The Nasdaq composite index added 1.78 points or 0.06 percent to 3,198.66. The Standard & Poor's 100 gained 1.05 points or 0.07 percent to 1,521.38.

On the New York Stock Exchange, a nearly even split. On the day, 1,511 stocks advanced and 1,507 declined on a volume of 3.7 billion shares traded.

The 10-year treasury note rose 2 2/32 to yield 2.001 percent.

Against the dollar, the euro fell to $1.336 from Wednesday's $1.3453. The dollar fell to 92.96 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.


Heinz sold for $28 billion

PITTSBURGH, Feb. 14 (UPI) -- U.S. food giant H.J. Heinz Co. said Thursday it agreed to sell itself to Berkshire Hathaway and 3G Capital for $28 billion.

Heinz shareholders will receive $72.50 per share of common stock -- considered a 20 percent premium -- in a deal that also includes the transition of Heinz's outstanding debt. On Wednesday, the value of Heinz shares closed the day at $60.48.

After 30 consecutive quarters of "organic, topline growth Heinz is being acquired from a position of strength," Heinz Chairman, President and Chief Executive Officer William Johnson said.

"As a private enterprise, Heinz will have an opportunity to drive further growth and advance our commitment to providing consumers across the globe with great tasting, nutritious and wholesome products," Johnson said in a statement.

Warren Buffett, chairman and CEO of Berkshire Hathaway, praised Heinz as a company with "strong, sustainable investment growth potential based on high quality standards, continuous innovation, excellent management and great tasting products."

Berkshire Hathaway and 3G Capital said Heinz would keep its company headquarters in Pittsburgh.

The deal is subject to regulatory approval and must be approved by Heinz shareholders, as well.


14 arrested for stock fraud

LOS ANGELES, Feb. 14 (UPI) -- Federal authorities in Southern California said they arrested 14 people in a stock fraud case known as a "pump and dump" scheme.

The scheme involves promoting worthless stock, driving up the price, and then unloading the stock for a significant profit.

Thom Mrozek, a spokesman for the U.S. attorney's office in Los Angeles said actress Pamela Anderson was not accused of any wrongdoing although she promoted one of the valueless companies in an infomercial, the Los Angeles Times reported Thursday.

Anderson promoted a company called frogads.com, the Times said.

Prosecutors said one of the suspects in the case were taped describing one of the companies by saying: "There's nothing in there. There's nothing to the company. It's monkey business."

"This scheme hurt innocent victims who were looking at the market, seeing high-volume trading and thinking, 'This will be a good investment,'" U.S. Attorney Andre Birotte Jr. said.

"What they don't know is it's all a sham," he said.

Among the 14 arrested is Sherman Mazur, described by Birotte as "a serial market manipulator." Mazur, whose record includes convictions for bankruptcy fraud and tax evasion, faces 30 felony charges that could result in a sentence of more than 100 years in prison, the Times said.

Investor losses in the pump-and-dump scheme could reach $300 million, prosecutors said.


Toyota settles safety lawsuit for $29M

TORRANCE, Calif., Feb. 14 (UPI) -- Toyota Motor Corp. said it reached a $29 million settlement with 29 U.S. states and one territory regarding inadequate safety information practices.

The settlement involves 29 states and American Samoa, which took the company to court for failing to disclose important safety information. Prosecutors also said there were communication problems between Toyota's offices in Japan and in the United States, the Los Angeles Times reported Thursday.

Toyota has recently reached a $1.1 billion settlement agreement to take care of claims from car owners that uncontrolled acceleration problems, which prompted recalls of more than 10 million vehicles, had depressed the resale value of its cars.

The company also faces approximately 300 additional wrongful death and injury lawsuits involving the uncontrolled acceleration problems, which sparked recalls beginning in late 2009.

Toyota has settled one wrongful death suit for $10 million. That case involved a 2007 Lexus ES in an accident that killed four people.

That case was settled in 2010.

In addition to the monetary penalty in the case settled Thursday, Toyota has agreed to be more forthcoming on information that concerns safety issues and to continue a rapid-response program to help drivers when safety-oriented issues arise.

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