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Dec. 13, 2012 at 6:54 PM
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Stocks drop Thursday

NEW YORK, Dec. 13 (UPI) -- Stocks slipped Thursday in New York despite a drop in first-time unemployment benefit claims.

First-time claims dropped by 29,000 to 343,000, the lowest level since early October and near a multiyear low.

Unemployment is currently at 7.7 percent.

Stocks turned lower, anyway. Among blue-chip stocks, Merck & Co. shares fell 2.34 percent while Boeing shares dropped 1.1 percent. Microsoft Corp. gave up 0.79 percent while Intel slipped 0.65 percent.

By close of trading, the Dow Jones industrial average gave up 74.73 points or 0.56 percent to 13,170.72.

The tech-heavy Nasdaq index shed 21.65 points or 0.72 percent to 2,992.16. The Standard and Poor's 500 lost 9.03 points or 0.63 percent to 1,419.45.

On the New York Stock Exchange, 914 stocks advanced and 2,128 declined on a volume of 3.3 billion shares traded.

The 10-year treasury note fell 9/32 to yield 1.735 percent.

The euro rose to $1.3075 from Wednesday's $1.3074. The dollar rose to 83.66 yen from 83.27 yen.

Japan's Nikkei 225 index rose 1.68 percent, 161.27 points, to 9,742.73.

Britain's FTSE 100 index dropped 0.27 percent, 16.24 points, to 5,929.61.

UBS close to Libor settlement

WASHINGTON, Dec. 13 (UPI) -- Swiss banking giant UBS is close to reaching a deal with regulators to settle charges of interest rate manipulation, sources told The Wall Street Journal.

It is expected that the bank will pay more than $1 billion to settle charges that it attempted to manipulate the London interbank offered rate, or Libor, which is an average lending rate among banks and is used to establish the rate for hundreds of trillions in commercial and personal loans and other contracts.

UBS would be the second bank to settle charges against it for Libor manipulation. Last summer, British bank Barclays paid $450 million to settle charges against it. Meanwhile, regulators have been investigating at least a dozen other major banks.

The scandal shook Barclays right up to the top. Several top executives, including its chief executive officer, were forced to resign after the settlement was announced.

The New York Times reported Thursday that a deal with UBS and regulators from the United States, Britain and Switzerland could be announced early next week.

Among new developments, Royal Bank of Scotland and Deutsche Bank have both indicated they were preparing to pay settlements with authorities.

British regulators Tuesday arrested three people involved in interest rate manipulation, including Thomas Hayes, who worked as a trader for UBS in Tokyo from 2006 to 2009 and then went to Citigroup, where he was fired for allegedly attempting to involve himself with rate manipulation.

S&P says Britain's AAA rating at risk

LONDON, Dec. 13 (UPI) -- Credit rating firm Standard & Poor's said Thursday there was a one in three chance Britain would lose its pristine AAA rating within the next two years.

"We now expect the United Kingdom's net general government debt as a percentage of gross domestic product to continue to rise in 2015, before declining again," S&P said.

S&P noted "future employment or growth shocks could pressure government finances further."

S&P said the government's focus on fiscal discipline would hamper economic growth.

"We continue to believe the government's efforts over the next few years to engineer the planned correction in the U.K.'s fiscal accounts will likely drag on economic growth, although we note that the expected pace of consolidation is to ease in the short term," S&P said in a statement.

"We could lower the ratings on the U.K. within the next two years if fiscal performance weakens beyond our current expectations. We believe this could occur in particular as a result of a delayed and uneven economic recovery, or a weakening of political commitment to consolidation," S&P said.

"We expect economic growth to rise slowly in the medium term, with net general government debt as a percentage of GDP continuing to rise in 2015, instead of stabilizing in 2014 as previously expected."

Sprint Nextel bids on rest of Clearwire

OVERLAND PARK, Kan., Dec. 13 (UPI) -- U.S. phone carrier Sprint Nextel is poised to pounce, offering $2.1 billion for the shares of Clearwire Corp. that it does not own, a public filing said.

Sprint Nextel currently owns 51.7 percent of Clearwire.

A deal struck in October has given Sprint Nextel, the third largest phone carrier in the country, the confidence and the cash to look for acquisitions that would help it to expand.

In October, Sprint Nextel sold a majority of its own stake to SoftBank of Japan for $20.1 billion, which greatly increased Sprint's purchasing power.

The offer to buy Clearwire would require SoftBank to sign off on the deal, The New York Times reported Thursday.

The offer from Sprint Nextel values Clearwire at $4 billion. It would give Spring Nextel a sizable portion of the wireless spectrum and the ability to speed up its pursuit of a next generation wireless network.

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