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Nov. 12, 2012 at 7:23 PM
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Markets close pool-table flat

NEW YORK, Nov. 12 (UPI) -- U.S. stock indexes closed pool-table flat Monday.

With no government reports issued on the economy due to the Veterans Day holiday, markets were on their own -- and after a modest attempt at making gains slumped right back to the starting line.

By close of trading, the Dow Jones industrial average lost 0.31 points, off less than 0.01 percent at 12,815.08.

The Nasdaq shed 0.67 points, 0.02 percent, to 2,904.26.

The Standard and Poor's 500 gained 0.18 points, 0.01 percent, to 1,380.03.

The bond market was closed, leaving the benchmark 10-year treasury unchanged, yielding 1.611 percent.

The euro fell to $1.2706 from Friday's $1.2711. Against the yen, the dollar was 79.56 from 79.40 yen.

In Tokyo, the Nikkei 225 index lost 0.18 percent, 81.16 points, to 8,676.44.

In London, the FTSE 100 index lost 0.04 percent, 2.41 points, to 5,767.27.

SAS to cut 800 jobs

SIGTUNA, Sweden, Nov. 12 (UPI) -- Scandinavian airline SAS said it would cut 800 jobs and sell an asset in Norway in an effort to cut $445 million in annual operating costs.

SAS also expects to cut salaries by 15 percent. Chief Executive Officer and President Rickard Gustafson has agreed to a 20 percent cut in pay, The Local.se reported Monday.

"This is truly our final call if there is to be a SAS in the future. We have been given this final chance to make a fresh start and to carry on these fundamental changes," Gustafson said.

"I know that we are asking a lot of our employees, but there is no other way. I hope that our loyal and dedicated employees are willing to fight for the survival of SAS and for our jobs," he said.

He said the savings would allow the company to invest in new aircraft "and to further develop our operations."

The company said the board of directors, after an emergency meeting, were unanimously behind the restructuring plan.

Following the job cuts, SAS will have a remaining workforce of about 9,000 employees.

The Swedish government owns 20 percent of SAS, but Financial Markets Minister Peter Norman said, "The government is willing to create the conditions for a limited time that will allow SAS to carry out the comprehensive changes called for."

A loan to the airline might be extended, but the government has no plans to increase provide more cash for the company.

On the contrary, the government is looking to divest itself of the 20 percent of the company it owns.

"The government's ambition is to continue to look for another owner for SAS," Norman said.

Philippines welcomes Hong Kong tourism

MANILA, Philippines, Nov. 12 (UPI) -- The Philippines Department of Tourism announced a campaign to bring in tourists from Hong Kong, inviting Hong Kong travel agents and media to a tour of resorts.

The "familiarization tour" will take travelers to business centers, the beach resorts of Daluyon, Sheridan and Dos Palmas, a "firefly watch" in Iwahig and a cruise on the Bacungan River, China's Xinhua News Agency reported Monday.

The campaign aims to promote the Philippines as a "viable and safe tourist destination for the Hong Kong public," the country's Department of Foreign Affairs said in a statement.

Hong Kong has not yet lifted a travel restriction, in force after a hostage-taking incident in Manila, Philippines, in 2010 killed eight Hong Kong nationals and led to a steep decline in tourism, the Philippine news agency GMA said Monday.

Japan's GDP contracted in third quarter

TOKYO, Nov. 12 (UPI) -- Japan said Monday its gross domestic product shrank 0.9 in the third quarter from the second, or 3.5 percent on a 12-month basis.

"I think they are severe numbers ... we will respond with a sense of crisis," said Prime Minister Yoshihiko Noda at a session in Parliament, Kyodo reported.

The Los Angeles Times reported that a dispute over sovereignty of a group of uninhabited islands in the East China Sea provoked a boycott of Japanese goods in China. Consequently, sales of Japanese cars in China plummeted, the newspaper said.

A major portion of Japan's economy, consumer spending, dropped 0.5 percent quarter to quarter. Capital expenditures by large corporations declined sharply, falling 3.2 percent, as companies are spending less with consumer spending slow.

"The Japanese economy enjoyed a modest recovery (January through June) thanks to strong private consumption and government reconstruction spending," HSBC economist Izumi Davalier wrote in a research note.

"But now that these temporary factors have faded and with exports declining at a faster-than-expected pace, GDP has started to contract in substantial terms again," the economist said.

"We expect this to repeat in the last quarter of 2012, before economic activity starts to pick up again early next year," he wrote.

Although not an official definition, for many two consecutive quarters of GDP contraction indicates a recession.

Analysts also said there were risks the economy could contract even faster, as much of the downturn is now linked to the European market, which is close to an official recession, and China, where business hinges on political events associated with the islands in dispute.

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