UPI NewsTrack Business

UPI NewsTrack Business

May 20, 2009 (United Press International) -- U.S. markets edge lower Wednesday

NEW YORK, May 20 (UPI) -- Early gains in U.S. stock markets vanished by the close of trading Wednesday after Federal Reserve said the recovery would take longer than expected.

The central bank's Open Market Committee meeting minutes for the April 28-29 meeting, released Wednesday, said policy makers expected 'the pace of recover would continue to be dampened in 2010.'

After a quick 80-point bounce, the Dow Jones industrial average fell through the day, closing 52.81 points in the red, off 0.62 percent, to 8,422.04. The Standard & Poor's (NYSE:MHP) 500 dropped 0.51 percent, 4.66 points, to 903.47. The Nasdaq composite index lost 6.70 points, 0.39 percent, to 1,727.84.

On the New York Stock Exchange, 1,591 stocks advanced and 1,452 declined on a volume of 6 billion shares traded.

The benchmark 10-year U.S. Treasury bond rose 16/32 to yield 3.19 percent.

The euro rose to $1.3774, compared to Tuesday's $1.3637. Against the Japanese yen, the dollar fell to 94.775 yen, compared to Tuesday's 96.04 yen.

In Tokyo, the Nikkei average gained 54.35 points to 9,344.64, up 0.59 percent.

In London, the FTSE index lost 13.84 points, 0.31 percent, to 4,468.41.
Treasury to loan GMAC (NYSE:GM) $7.5 billion

WASHINGTON, May 20 (UPI) -- The U.S. Treasury is planning to announce a $7.5 billion loan for GMAC LLC, sources close to the deal making said Wednesday.

The Treasury's recently concluded bank stress tests concluded with the government's mandate that GMAC find $11.5 billion in additional capital to weather a potential downturn in the economy.

In December, the government loaned GMAC $5 billion with a purchase of preferred stock.

Those shares, if turned into voting stock, would give the government 35 percent of the company. Depending on how the deal is structured, the new loan could put the government in control of GMAC, the lending arm for General Motors Corp., The Detroit News reported Wednesday.

GMAC is waiting for additional government support to begin assuming the role of primary lender for Chrysler Financial, the News said.

GMAC spokeswoman Gina Proia said Tuesday the company was still discussing how much support it required from the government.

The company plans to file a financial plan with the Chicago Federal Reserve Bank by June 8, the News said.
Death benefits survive shareholder vote

FORT WORTH, Texas, May 20 (UPI) -- A narrowly-decided shareholder vote in Texas allowed three top XTO Energy (NYSE:XTO) executives to keep huge death benefits that kick in, so to speak, if they kick off.

A proposition for the company to submit its executive death benefits policy to a shareholder vote was defeated with the proposition receiving 49 percent approval, the Fort Worth, Texas, Star-Telegram reported Wednesday.

Company Chairman Bob Simpson's death in 2008 would have set the company back $140 million, including a $110 million cash bonus and $4.35 million in unearned salary benefits in what the newspaper termed a 'golden coffin' arrangement.

The benefits available to Simpson if he was, so to speak, unavailable included a car allowance worth $158,000.

Chief Executive Officer Keith Hutton and XTO President Vaughn Vennerberg also have huge 'golden coffin' clauses in their contracts, which, irony notwithstanding, the company said would help retain top executives.

With the close vote, Simpson said he would 'relook' at the issue, the newspaper said.
Britain rules: Pringles are potato chips

LONDON, May 20 (UPI) -- An appeals court in Britain said Wednesday that Procter and Gamble's (NYSE:PG) snack treat Pringles were, technically, potato chips and subject to sales tax.

The ruling has a potential to require the company to pay $155 million in back taxes and $31 million per year, but a Procter and Gamble spokesperson said prior arrangements with Her Majesty's Revenue and Customs meant there were no back taxes due, The Daily Telegraph reported.

Foods are rarely subject to sales tax in Britain, but potato chips happen to be singled out as an exception.

The court heard arguments on whether or not Pringles, made 42 percent from potato and 33 percent from fat and flour, contained enough 'potatoness,' to be considered a potato chip, or crisp.

The court decided there was 'more than enough potato content for it to be a reasonable view that it is made from potato,' the Telegraph said.