Home prices rose modestly in October, thanks to a flood of buyers seeking to take advantage of the government&S217;s offer of a tax credit, data released Tuesday showed.

The Standard &&8; Poor&S217;s/Case-Shiller home price index, a closely watched measure of the housing markets in 20 metropolitan areas, rose 0.4 percent from September on a seasonally adjusted basis. It was the fifth consecutive month that prices were up.

Underneath this apparent good news were some disquieting signs of deterioration, however.

Seasonal adjustments tend to hide any weakness in the cooler months, when fewer houses are sold. On an unadjusted basis, the index was flat in October.

&S220;We&S217;ve started to see the possibility of either a leveling off of prices for a few months or perhaps a double-dip,&S221; said Maureen Maitland, the vice president for index services at S emergency payday loan.&&8; P.

The Case-Shiller index is down 7.3 percent from October a year ago.

Prices fell or were flat in nine of the 20 cities surveyed in October, the same as in September. But the recovery is beginning to diverge sharply by metro area, Wells Fargo chief economist John Silvia noted.

In the last three months, prices in San Francisco increased at a 25 percent annual rate while Minneapolis was up 17 percent and Los Angeles rose 11 percent. Phoenix, long a laggard, rose 13 percent.

But New York, Portland and Boston were up less than 2 percent.

Home Prices Rose Slightly in October

NEW YORK (MarketWatch) -- Benchmark stock indexes in Mexico and Brazil closed higher Wednesday, adding to the prior session's rally, after J.P. Morgan upgraded Mexico and industrial production in Brazil improved for a 10th month.

Mexico's IPC index rallied 1.1% to 32,112 and Brazil's Bovespa gained 0.3% to 68,615.

The swing in Mexico's economic growth in 2010 is predicted to be 0.5% from this year, one of the largest turnarounds in emerging markets, J.P. Morgan analysts wrote in a research note. Still, the nation's stocks are under-owned, and growth in the U.S. will be a big boost for one of its largest trading partners, Adrian Mowat and Ben Laidler said.

Among the shares J.P. Morgan now rates at overweight, Ternium's U.S. shares gained 2.5% and brewer Femsa's shares rose 1.4%.

DOW INDUSTRIALS (DJIA)

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Separately, bank concern Banorte jumped 3.5% in local trading.

Among some of the most actively-traded Mexican companies, U.S. shares of fixed-line telecommunications firm Telmex advanced 2 fast cash.6%.

Retailing giant Wal-Mart de Mexico gained 3.9% on U.S. exchanges.

U.S. shares of wireless giant American Movil declined 1.7% while cement maker Cemex slid 0.5%.

In ETF action, the iShares MSCI Mexico Investable index rose 1.4%

Meanwhile, iShares MSCI Brazil Index gained 1.1%.

Is It Too Late To Buy Stocks?

WSJ's personal finance reporter Shefali Anand talks to India Bureau Chief Paul Beckett about whether individual investors can still buy stocks in light of massive gains in 2009.

Industrial production in Brazil rose 2.2% in October compared to the previous month, the national statistics agency said.

Utility companies led the advance, with local shares of Centrais Eletricas Brasileiras up 8.5% and Eletrobras shares gaining 6.6%.

Petrochemicals company Braskem's U.S. shares rose 4.2%.

Steel firms were among the gainers, with U.S. shares of Gerdau up 2.5% and CSN advancing 2.4%.

Oil giant Petrobras declined 0.1%.

Elsewhere in South America, Argentina's Merval index advanced 0.5% to 2,221. In Chile, the IPSA index gained 0.6% to 3,344.

Latin American Markets: Latin America stock rise; analyst upgrades Mexico

Bear Stearns and Lehman Brothers paid their executives largely in stock, and that stock lost most or all of its value when those companies collapsed.

Many people on Wall Street say these examples help make the case that pay incentives were not what caused executives at these fallen firms to take excessive risks.

But three professors at Harvard are disputing that logic in a new study, saying it is an urban myth that executives at Bear and Lehman were wiped out along with their companies.

Though the chiefs at both investment banks lost more than $900 million in their stock holdings, the professors argue that it is important to also consider all the riches the bankers took off the table in the years preceding the crisis.

At Lehman, the top five executives received cash bonuses and proceeds from stock sales totaling $1 billion between 2000 and 2008, and at Bear, the top five received more than $1.4 billion, according to the study, which was released on Sunday night on the Web site of the Program on Corporate Governance at Harvard Law School.

The payouts came in the form of cash bonuses as well as thousands of shares of stock that the executives sold as the share prices of their companies soared. Most of the executives sold far more shares during that period than the number they held when their companies hit bottom.

&S220;There&S217;s no question they would have done massively better had their firms not collapsed,&S221; said Lucian Bebchuk, one of the study&S217;s authors. &S220;But the wealth of those top executives was hardly wiped out. The idea that they were devastated financially has kind of colored the picture people have about what payoffs they were facing.&S221;

Many of the solutions that policy makers and regulators are considering for Wall Street pay are tactics that were already in place at Lehman and Bear. Both firms required executives to wait several years before selling their stock. Both firms paid heavily in stock.

Critics of compensation reform have pointed to these two firms as examples of why change in pay practices may not make a difference and have said the focus should be on things like risk management and regulatory oversight.

However, the Harvard study says the executives may have had reason to focus on the short-term prices they could attain with stock selling.

Mr. Bebchuk has been advising the Treasury Department on compensation at bailed-out companies. He advocates locking up stock compensation for longer periods as well as pay clawback provisions for years later.

James E. Cayne, the former Bear chief executive, stands out for selling fewer shares over the years than he held at the firm&S217;s demise. Mr. Cayne sold 2,720,845 shares for $289 million over eight years, beginning in 2000. He was still holding 5,685,591 shares at the start of 2008 payday loan.

The other Bear executives sold nearly five times as many shares in the years leading up to the firm&S217;s collapse as they held in 2008, and at Lehman, the executives sold about 1.3 times the shares they owned at the end.

The study does not take into account that the executives might have sold shares in part to pay hefty tax bills. Shares of stock are not taxed until they transfer in ownership to executives, which was a period of multiple years at both investment banks. At that time, some executives sold the number of shares needed to pay the tax bill on the shares they still held.

Some compensation experts said over the weekend that the study did not seem to prove that compensation caused the crisis and that it instead just pointed out that the bankers were wealthy.

&S220;I don&S217;t think anybody would question that they were well compensated,&S221; said Ren&>33; Stulz, a professor at Ohio State University who has studied bank compensation. &S220;It&S217;s certainly true that the incentive effects are different if you&S217;re already very wealthy, but that does not mean that the incentive effects are not there.&S221;

Executives at companies that were bailed out by the government have in many cases had their stock holdings recover in value in the last year, and that might have been the case at Bear or Lehman if they had received the same treatment.

Shortly after Bear collapsed, Richard S. Fuld Jr., the chief executive at Lehman, called Peter J. Solomon, an investment banker who used to work at Lehman.

&S220;He reiterated the fact that when firms like Bear Stearns fold and if Lehman Brothers got into trouble, the executives own so much stock that they were losing a lot,&S221; Mr. Solomon recalled over the weekend.

But Mr. Solomon, who has been critical of pay levels and of the fact that investment banks are publicly traded, said the executives who presided over Wall Street&S217;s collapse have suffered, despite the money they retained.

&S220;There&S217;s not one person involved in the demise of Lehman Brothers, Bear or even the troubles that have fallen on Citigroup who thinks they&S217;re living happily ever after,&S221; Mr. Solomon said, &S220;because their reputations have been tarnished, and what do you have at the end of the day but your reputation?&S221;

Through intermediaries, several of the executives examined in the study declined to comment. The other authors of the study were Alma Cohen, a professor visiting Harvard from Tel Aviv University, and Holger Spamann, a lecturer at Harvard.

Executives Kept Wealth as Firms Failed, Study Says

SAN DIEGO (MarketWatch) -- The Federal Housing Administration is considering a variety of changes -- including requiring larger down payments for FHA-insured mortgages, demanding higher credit scores of FHA borrowers and upping FHA mortgage premiums -- to manage risk as it deals with losses in its capital reserve fund, FHA Commissioner David H. Stevens said Saturday.

"Nothing is off the table," Stevens said at the National Association of Realtors' annual conference, being held in San Diego this weekend. "I will consider everything, and I've already made several risk changes to manage the portfolio."

Yet while there is concern about the FHA's finances, its situation doesn't resemble the losses seen in the subprime mortgage market, he said.

A report released in the past week showed that the FHA has sustained significant losses from loans made before this year, as the country's foreclosure problem deepened. Its capital reserves have fallen below the threshold mandated by Congress.

By law, FHA must have two reserve accounts, Stevens explained to the Realtor audience. One is to hold funds to pay all forecasted losses, he said.

Then, "there's a secondary account, it's an excess valve that is used to pay unforecasted losses," he said. The creation of the secondary account is why FHA is "still standing while many others did not survive this tumultuous time," he said.

That secondary account is also the cause of concern.

The independent study projected that the secondary account was 0.53% of the total insurance in force this year -- below the 2% statutory threshold, according to a news release from the U.S. Department of Housing and Urban Development. That said, by combining both accounts, FHA holds $31 billion in reserves, or more than 4.5% of total insurance in force.

The study concluded that under most economic scenarios, the FHA's reserves would remain above zero. Still, some have compared FHA's troubles to those that brought down the subprime market -- a comparison Stevens says isn't fair.

Stevens said quality of FHA loans is much better than risky subprime products that became popular during the real-estate boom.

FHA-backed mortgages are for principal residences, borrowers have to fully document their income, and nearly all of them are 30-year fully amortizing fixed-rate mortgages, he said. That contrasts with poor performing subprime and Alt-a loans that required little if any income documentation and often involved low teaser rates that skyrocketed when the introductory period was over, he said payday loans with no fax.

And recently, the overall credit quality of FHA borrowers has crept up: The average borrower's FICO score today is 693, compared with 633 two years ago.

Taking action

Even though FHA is considering a variety of ways to address the reserve situation, Stevens also said it's important not to jump to conclusions and "overcorrect."

"I am modeling everything right now and looking at impacts. If you are concerned about defaults in the FHA portfolio, there are only a few primary areas that you can look at. One is the [mortgage insurance] premium, second is the qualifying guidelines -- the credit score and the down payment," he said in an interview following his speech.

"But we're doing it all with an eye on our No. 1 priority, which is to get the housing market back on track ... getting stability back in the housing system is the most important thing," he said.

Those in the real-estate industry are concerned about any action that would reduce available mortgage money. If down payment requirements for FHA rise, for example, that will take some prospective buyers out of the market and slow a recovery, said Helen Hanna Casey, president of Howard Hanna Real Estate Services, during an earlier panel on Saturday.

FHA popularity

To give an idea of FHA's recent popularity, half of the FHA's current portfolio was originated this year, Stevens said.

In the second quarter, nearly 50% of all first-time buyers in the market used a loan insured by the FHA. FHA-insured loans typically require a 3.5% down payment, which can be helpful for those buying their first home.

FHA backed about $360 billion in mortgages in 2009 and forecasts it will back $400 billion next year, Stevens said.

But FHA won't play this large of a role in the lending market forever. And it shouldn't, Stevens said.

"We are a counter-cyclical provider of capital to the housing finance system, and for it to be this large is concerning to everyone in the administration. We're filling the role and will continue to fill the role, but ultimately have to be concerned about private capital returning to the system," Stevens said.

FHA considering changes in wake of reserve losses

TOKYO/AMSTERDAM (Reuters) – Japan&&9;s Canon (7751.T) plans to buy Dutch copier and printer maker Oce (OCEN.AS) for 730 million euros (&&6;1.09 billion), challenging rivals Ricoh (7752.T) and Xerox (XRX.N) in a hunt for growth during the sector downturn.

Copier and digital camera maker Canon and Oce said in a joint statement Monday that Canon intends to offer 8.60 euros per share, or 730 million euros, for Oce&&9;s outstanding shares. The offer represents a premium of 70 percent to Oce&&9;s Friday close.

Canon&&9;s offer follows little over a year after Japan&&9;s Ricoh, the world&&9;s largest copier maker, bought U.S. office equipment distributor Ikon Office Solutions, a deal which hit Canon&&9;s U.S. operations hard as Canon machines had represented 60 percent of the products Ikon handled before the acquisition.

Canon, Oce and rivals have suffered from the economic slump, which forced companies to cut spending, including costs on copying and printing.

Oce, which was loss-making in the past two quarters, has been cutting costs and jobs and has not paid a final 2008 dividend, while Canon and Ricoh reported sharp falls in their quarterly profit last month.

"The deterioration of the economic market circumstances has influenced the performance of the industry but it was not the initiator for the strategic review process which, after thorough and careful evaluation, led to this proposal of joining forces with Canon," Oce CEO Rokus van Iperen told reporters.

Canon and Oce products are mutually supplementary, with the Japanese company having strength in regular office machines and mid- to lower-end production printers, while Oce excels in high-end production printers and advertisement-use large-sized printers, the Tokyo-based company said.

Production printers, or digital commercial printers, are used to print such documents as product manuals and direct mail quickly and in large volume, and are a fast-growing segment of the global printer market.

Oce shares were up 68.5 percent at 8.53 euros by 1119 GMT, after earlier reaching their highest level since June last year.

Including debt and other obligations, the deal values Oce -- which competes with Xerox (XRX payday loans.N) and Konica Minolta Holdings (4902.T) -- at about 1.5 billion euros (&&6;2.2 billion), Van Iperen said.

HP, KYOCERA POSSIBLE COUNTERBIDDERS

Analysts said the deal was good for Oce shareholders, as it solved most or all of the problems the company faced due to the drop in demand. They were divided about a possible rival offer.

SNS Securities said in a note Hewlett-Packard (HPQ.N) and Kyocera (6971.T) had sufficient financing options for a counter bid, while Ricoh and Konica Minolta currently had high debt levels and relatively low earnings generation.

Petercam analyst Eric de Graaf, however, said it was unlikely that another bidder would emerge because of the bid price and commitment of some shareholders and Oce&&9;s boards.

Preference share holders Ducatus, ASR and ING -- which together hold 19 percent of Oce&&9;s share capital -- agreed to sell their interests to Canon, while Oce shareholder Bestinver Gestion S.A. has agreed to tender its 9.5 percent stake.

Oce&&9;s management and supervisory boards support and will recommend the intended offer, Oce and Canon said.

Canon, the world&&9;s largest digital camera maker, is Japan&&9;s 6th-most valuable company with market capitalization totaling &&6;50 billion. Its printers and copiers accounted for 65 percent of total revenues in 2008.

Analysts said the deal is positive for Canon, while potentially negative for rival Japanese copier and printer maker Konica Minolta, which is in a business alliance with Oce.

"Konica Minolta procures high-end production printing machines from Oce, while Oce procures lower-end machines from Konica Minolta," Mizuho Securities analyst Ryosuke Katsura said.

"(The) chances are Canon machines will replace Konica Minolta gear in this relationship," he said.

Shares in Canon closed down 1.5 percent at 3,370 yen ahead of the announcement, underperforming the benchmark Nikkei average (.N225), which gained 0.2 percent.

(&&6;1=89.60 Yen)

(&&6;1=.6685 euros)

(Editing by Joseph Radford, Mike Nesbit and Simon Jessop)

Canon seeks printer power with $1.1 billion Oce bid

COLUMBUS, Ohio – After Richard Handy of Fairfield received an e-mail from a conservative group calling Gov. Ted Strickland's proposed delay of Ohio's income tax cuts a "retroactive tax increase," Handy fired off a few passionate words to some state senators.

"I am absolutely against changing the rules in the middle of the game," wrote Handy in an Oct. 19 e-mail about Strickland's proposal to delay the final 4.2 percent reduction in income taxes to close an $850 million budget gap.

"I am sure the vast majority of Ohioans agree with me in opposing this idiotic proposal ... If Ohio needs more money, STOP SPENDING! That's what budgets are for."

An Associated Press public records request for constituent correspondence to legislative leaders on the tax proposal found that most was fueled by organized interests — the anti-tax group Americans for Prosperity that opposed it, and school teachers and employees and mental health service providers that supported it.

Some Republicans have argued that because current law has the last tax cut in place and because withholding for the tax year has already started, Strickland's tax proposal is a tax increase.

But the relatively light feedback from constituents in comparison to other legislative issues, including the budget earlier this year, suggests that most Ohioans are not particularly inflamed by the tax talk.

Lawmakers considering what to do about the budget gap received both dry form letters distributed among like-minded individuals and more personal — and sometimes humorous — pleas.

"CUT SPENDING! That's what my husband and I are doing, that's what my neighbors are doing," wrote Alice Martin of Huron to Republican Senate President Bill Harris of Ashland on Oct. 20. "I'll bet your wife could explain it to you!"

Peg Carter fired off a few quick words when she was crunched for time.

"I don't have much time here at the library internet because I have ice cream in the car," Carter wrote guaranteed payday loans. "I do think that Ohioans who are still working, are able to accept a tax freeze — in light of your pay cuts — in order to provide help for those who have lost their jobs because of the economy."

The tax proposal approved by the Democratic-controlled House and pending in the Republican-controlled Senate includes a 5 percent pay cut for lawmakers.

Teachers and employees from several school districts used form letters, the most common e-mails sent to legislative leaders on the issue. Democratic lawmakers have said that delaying the tax reduction will protect school funding from both state and federal cuts, even naming the proposal the Education Funding Protection Act.

"My district cannot afford to lose state and federal funding," Debra McRoberts of Westerville told Harris in an Oct. 19 missive. "This will force our district to reduce learning opportunities for students and lead to further elimination of education employees."

The same letter was sent to Harris and House Speaker Armond Budish, D-Beachwood, from school personnel in Mount Vernon, Perrysburg, Sunbury, Shelby, Mansfield and other towns.

Many e-mails sent to Republican leaders opposing the tax proposal called it a "retroactive tax increase," a description the Strickland administration said is inaccurate. Several constituents said they received an e-mail from Americans for Prosperity describing it as "retroactive."

The state constitution bans retroactive laws. And Ohio Department of Taxation spokesman John Kohlstrand noted that "retroactive" is a legal term. He said a retroactive tax hike would be, for example, if lawmakers changed the tax rate for the 2008 tax year after that year is over.

Proposed delay of Ohio tax cuts spurs e-mails

The United States economy shed 190,000 jobs in October, and the unemployment rate reached a 26-year high of 10.2 percent, up from 9.8 percent in September, the Department of Labor said Friday in its monthly economic appraisal.

While the pace of job losses has slowed significantly since the peak of the recession last winter, the unemployment rate, which measures the number of people actively seeking work, continues to climb, and economists do not foresee relief until well into next year.

&S220;There&S217;s no doubt that the slashing and burning of jobs has abated quite a lot,&S221; said Allen L. Sinai, the founder of Decision Economics, a research firm. &S220;The economy is recovering, but it is a very soft recovery.&S221;

The biggest losses came in the construction, manufacturing and retailing sectors. Health care companies added 29,000 jobs to their payrolls, and the number of temporary workers increased by 34,000 &<51; a significant gain that could indicate employers are beginning to expand their businesses again.

The Labor Department also revised September&S217;s losses to 219,000 from 263,000.

Dean Baker, a director for the Center for Economic and Policy Research, said he did not expect declining unemployment rates until next spring. &S220;We may be looking at very high levels,&S221; Mr. Baker said, &S220;barring a policy response, for several years into the future.&S221;

The dissonance of the economic recovery, with steep job losses coming even as production intensifies and companies show better-than-expected profits, has placed policy makers in a delicate position.

On Thursday, in anticipation of the unemployment report, Congress overwhelmingly voted to extend benefits for jobless workers for up to 20 weeks. That will soothe the short-term financial pain of many families, but demands for a new wave of government relief may intensify if companies continue to cut back.

So far, the federal stimulus package has injected billions into local economies, giving states money, for instance, to finance construction projects or retain teachers. The housing and auto sectors have been propped up with government credits meant to encourage spending. But weak consumer demand and hefty labor costs are still forcing many employers to cut positions and reduce hours to survive.

The recession has forced many Americans to settle for part-time work because companies are reluctant to add full-time employees. The underemployment rate, which includes part-time workers, the jobless and those who have given up on searching, was 17 bad credit pay day loans.5 percent in October &<51; the highest level since at least 1994.

Even as unemployment remains high, there are signs that critical industries are gaining steam.

The manufacturing sector, considered the engine of the economy, was given its most optimistic bill of health in three years by a private group on Monday. Manufacturers added jobs for the first time in 15 months in October, the group said, largely by bringing in temporary workers or recalling laid-off workers. Economists say that the first sign of recovery in jobs will be when more companies begin bringing in temporary workers.

The economy expanded at a 3.5 percent annual rate in the third quarter, ending a year of back-to-back contractions. But whether that economic expansion will translate into immediate job creation is still widely debated.

&S220;You can&S217;t force businesses to use their profits to hire,&S221; Mr. Sinai said.

Consumer confidence is still low, and many economists believe an economic turnaround will not come until consumers feel at ease again. With families taking home smaller paychecks each month, that could take time.

For the 15.7 million Americans who were without work in October, Friday&S217;s data did little to change the realities of their daily lives &<51; mornings spent combing online job sites, afternoons devoted to fighting off bill collectors. Their r&>33;sum&>33;s will still go out, their interviews will go on, and, more likely than not, their phones will not ring.

Melissa Grodhaus, 42, a laid-off cemetery worker from Winona, Ohio, said she had filled out 150 applications since she lost her job nearly two years ago. She struggles to keep up with mortgage payments and utility bills, and she must also take care of her three children.

&S220;There&S217;s nothing here,&S221; she said. &S220;I can&S217;t see anything worse than it is right now.&S221;

Ms. Grodhaus has started selling old clothes on eBay, and she has told her children she cannot afford to pay the fees for school sports this year. Every two weeks, when the local church brings out food baskets, she rushes to pick up her share. Within minutes, she said, they are gone.

U.S. Unemployment Rate Hits 10.2%, Highest in 26 Years

NEW YORK (Reuters) – U.S. stocks gained sharply on Thursday after an expansion in business productivity and a fall in jobless claims boosted investor confidence about the economy, while Cisco led gains in tech shares.

U.S. non-farm productivity rose more than expected in the third quarter as companies squeezed more output from a smaller pool of labor, while fewer U.S. workers filed new jobless insurance claims than forecast last week -- hitting a 10-month low.

Cisco (CSCO.O) shares gained 2.2 percent to &&6;23.79 after the company reported earnings late on Wednesday. The technology bellwether reported better-than-expected quarterly revenue, and its board authorized up to &&6;10 billion in stock buybacks.

"We opened on good news from Cisco and the market just moved up higher on better news on productivity and unemployment numbers ... The next news that will move the market will be the raft of earnings after the bell today, and the unemployment numbers tomorrow," said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.

The Dow Jones industrial average (.DJI) gained 172.76 points, or 1.76 percent, to 9,974.90. The Standard & Poor&&9;s 500 Index (.SPX) advanced 15.95 points, or 1.52 percent, to 1,062.45. The Nasdaq Composite Index (.IXIC) rose 44.18 points, or 2.15 percent, to 2,099.70.

On Friday, the Labor Department is expected to report that fewer jobs were cut in October than in the previous month companies making payday loans. But the jobless rate is expected to rise to 9.9 percent, exceeding a 26-year high of 9.8 percent in September. Economists polled by Reuters have forecast a loss of 175,000 jobs in October, sharply below the 263,000 jobs cut in the previous month.

In Thursday&&9;s session at midday, other technology stocks also advanced. Intel Corp (INTC.O) gained 2.2 percent to &&6;19.00 and Microsoft (MSFT.O) rose 2.2 percent to &&6;28.68.

Shares of IMS Health Inc (RX.N) soared 23.5 percent to &&6;20.76 after the company agreed to be bought by TPG and CPP Investment board. The deal was valued at &&6;5.2 billion, including the assumption of debt.

But CVS Caremark Corp (CVS.N) tumbled 19.7 percent to &&6;29.04 after comments from Chief Executive Tom Ryan on weakness in the pharmacy benefit management business.

U.S. retail chains reported October sales that rebounded from the lows of a year ago, but many failed to surpass Wall Street&&9;s increased expectations as consumers spend selectively headed into the holiday season.

The S&P retail index (.RLX) rose 1.2 percent.

(Reporting by Angela Moon, Editing by Jan Paschal)

Stocks rally on data; Cisco earnings lift techs

Following the lead of foreign regulators, New York&S217;s attorney general, Andrew M. Cuomo, filed a federal antitrust lawsuit Wednesday against Intel, the world&S217;s largest chip maker.

The lawsuit charges that Intel violated state and federal laws by abusing its dominant position in the chip market to keep its main rival, Advanced Micro Devices, at bay. Intel has faced similar lawsuits in Asia and Europe, and in May the European Commission fined the company a record $1.45 billion for antitrust violations.

These cases have largely revolved around deals Intel has struck with computer makers and retailers that, regulators say, pressured them into picking the company&S217;s microprocessors &<51; which serve as the central chip inside personal computers and servers &<51; instead of competing products from A.M.D.

&S220;Rather than compete fairly, Intel used bribery and coercion to maintain a stranglehold on the market,&S221; Mr. Cuomo said in a statement. &S220;Intel&S217;s actions not only unfairly restricted potential competitors, but also hurt average consumers who were robbed of better products and lower prices.&S221;

To date, Intel has denied the charges against it and has filed an appeal against the European Commission&S217;s ruling.

The New York attorney general&S217;s suit is the first formal antitrust action against Intel by any government agency in the United States in more than a decade. The Federal Trade Commission has been investigating Intel since 2008 but has not begun formal proceedings against the company.

Intel, based in Santa Clara, Calif., also faces a four-year-old antitrust lawsuit filed by A.M.D. in Delaware. That suit is scheduled to go to trial early next year.

The New York move increases the chances that the F.T.C. will take action against Intel, according to a person who is familiar with the state&S217;s investigation but is not authorized to discuss it. Mr. Cuomo&S217;s staff, this person said, regularly communicates and cooperates with the commission&S217;s staff.

"These are separate investigations, but it would be very surprising for New York State to go off on its own without being fairly confident the F.T.C. would pursue Intel as well," the person said.

A spokeswoman for the F.T.C., Claudia Bourne Farrell, would not comment beyond saying that the commission&S217;s investigation was continuing.

Intel and Microsoft have long been the personal computer industry&S217;s two most dominant players. About 90 percent of all PCs rely on Microsoft&S217;s Windows software, while Intel&S217;s chips go into about 80 percent of the PCs and computer servers sold every year.

Both companies have caught the attention of antitrust regulators in the past, although Microsoft&S217;s legal battles have been far more confrontational and enduring.

In 1993, the F.T.C. dropped a two-year investigation into Intel&S217;s business practices, saying it lacked evidence to back a lawsuit, and it ended a second investigation in 2000. In 1995, Intel settled a number of cases with A.M.D., including one involving antitrust charges.

&S220;Intel has been more willing to negotiate with the government and less bellicose than Microsoft,&S221; said Harry First, a professor at the New York University School of Law and the former chief of the New York attorney general&S217;s antitrust bureau. &S220;Frankly, I think they&S217;ve been smarter litigants and have escaped more than Microsoft.&S221;

Over the past couple of years, however, regulators have dug in and secured victories against Intel. In 2005, Japanese regulators determined that Intel had violated antitrust laws in that country, and South Korean antitrust authorities followed suit in a similar case. But the verdict handed down in May by the European Commission was by far the biggest blow against the company.

In the 80-page lawsuit, Mr. Cuomo appears to be piggybacking, in part, on extensive e-mail evidence gathered during Europe&S217;s investigation into Intel&S217;s business practices payday advance lender.

In the statement, the attorney general pointed to e-mail messages that detail Intel&S217;s interactions with companies like Hewlett-Packard, Dell and I.B.M. that he said support the case against Intel.

For example, Intel is accused of paying I.B.M. $130 million to hold back on selling a server based on A.M.D.&S217;s Opteron chip, while also threatening to curtail joint projects if I.B.M. marketed A.M.D.&S217;s products.

&S220;The question is, can we afford to accept the wrath of Intel...?&S221; an unnamed I.B.M. executive wrote in a 2005 e-mail, according to Mr. Cuomo&S217;s office.

A similar e-mail from an unnamed H.P. executive talks about Intel planning to &S220;punish&S221; the company for selling products based on A.M.D.&S217;s chips.

Most of the past antitrust cases in Europe and Asia have centered on Intel&S217;s actions in the PC market. But Mr. Cuomo&S217;s case seems to place substantial emphasis on the company&S217;s server chip business as well.

In 2003, A.M.D. released a chip called Opteron that thrust it into the mainstream server market for the first time. For about four years, the product was hailed by analysts and hardware makers as superior to Intel&S217;s Xeon chip.

With Opteron on its side, A.M.D. for the first time managed to attract H.P., I.B.M., Dell and Sun Microsystems as server chip customers. A.M.D. executives, however, have long contended that Intel thwarted the adoption of Opteron through its abusive practices and blunted the company&S217;s ability to capitalize on the product.

They have also argued that Intel has blocked A.M.D.&S217;s attempts to place its chips in computers purchased by businesses. Both the server and business PC markets tend to generate higher profits than the consumer computer market.

I.B.M., which competes with Intel in the server chip market, and A.M.D. have invested billions of dollars in chip plants based in New York.

Along with e-mail from hardware makers, Mr. Cuomo has presented e-mail messages exchanged between Intel executives in which they express anti-trust concerns. &S220;Let&S217;s talk more on the phone as it&S217;s so difficult for me to write or explain without considering anti-trust issue,&S221; one Intel executive is said to have written in an April 2006 message.

In interviews, a number of antitrust experts found similar e-mail exchanges presented by the European Commission unconvincing, and said the regulators&S217; overall evidence was thin on details.

&S220;I look at it, and I don&S217;t have a lot of confidence in what the E.C. alleges,&S221; said John E. Lopatka, a professor and antitrust expert at Penn State&S217;s Dickinson School of Law. &S220;It does smack of a brief more than an objective and honest recitation of the results of investigation.&S221;

The issue of so-called loyalty discounts provided by a supplier to its customers remains a murky area in United States law.

&S220;European law is much harsher on loyalty discounts,&S221; Mr. First said. &S220;There is still a lot of debate here among commentators and the courts on this issue, and the Supreme Court has not spoken on how we should treat this sort of loyalty pricing.&S221;

Mr. Cuomo&S217;s office said it had examined millions of pages of e-mail and documents during its 23-month investigation into Intel and taken testimony from dozens of witnesses.

Mr. Cuomo contends that consumers would have benefited from lower prices and better products had there been an even playing field in the chip market. His lawsuit seeks to stop Intel from continuing its anticompetitive practices and to recover damages and penalties.

Steve Lohr contributed reporting.

Cuomo Files Federal Antitrust Lawsuit Against Intel

Hot News: GMAC posts third quarter loss, hurt by mortgage unit

WASHINGTON, Oct. 29 (Xinhua) -- The U.S. economy rose at a pace of 3.5 percent in the third quarter after four consecutive quarters of contraction, reported the Commerce Department on Thursday.

The increase is better than economists' expectation of 3.3 percent, indicating the strongest signal that the worst recession since the 1930s has ended.

The growth of real gross domestic product (GDP) -- the output of goods and services produced by labor and property within U personal loan for poor credit.S. borders -- in the July to September quarter was mainly propelled by the government's economic stimulus package.
Special Report: Global Financial Crisis

U.S. economy rises 3.5% in third quarter

SAN FRANCISCO (Reuters) – Billionaire activist investor Carl Icahn gave up his seat on the Yahoo Inc (YHOO.O) board of directors on Friday, closing a tumultuous chapter in the Internet company&&9;s 15-year history.

Icahn said in a letter to the board he did not believe Yahoo needed an activist investor as a director at this time, and that his attention was focused on other matters. The letter said his resignation was effective immediately.

Icahn won his seat on the board in July 2008, in the wake of Yahoo&&9;s protracted -- and ultimately fruitless -- talks with Microsoft Corp (MSFT.O), which had offered &&6;47.5 billion to buy Yahoo.

Yahoo CEO Carol Bartz in January replaced Jerry Yang, who had rebuffed the software giant&&9;s offer. Instead, Yahoo and Microsoft announced a 10-year search partnership in July, in which Yahoo will use Microsoft&&9;s back-end search technology on its Web portal.

In his letter, Icahn said he believed the Microsoft transaction would provide great long-term benefits to Yahoo and commended Bartz on a great job.

A Yahoo spokeswoman said on Friday there were no immediate plans to find a replacement for Icahn, and that the board would operate with 11 directors for the time being.

"Carl has been an important member of our board and has helped us through some significant transitions," Yahoo Chairman Roy Bostock said in a statement. "We are all grateful for his active role shaping the future of Yahoo."

Shares of Yahoo were off 25 cents at &&6;16.97 in after hours trade.

Icahn is chairman of Icahn Associates and currently sits on the boards of several companies including Blockbuster Inc (BBI car loans for people with bad credit.N) and American Railcar Industries Inc (ARII.O).

ICAHN PROUD

He owned 62.8 million shares for a roughly 4.5 percent stake in Yahoo as of August 31, according to Reuters data. Icahn amassed the bulk of his Yahoo stake in May 2008, according to media reports at the time, when shares of the company were trading in the low- to mid-&&6;20 range.

After Yahoo rejected Microsoft&&9;s offer that spring, Icahn mounted a proxy contest to try and oust the Yahoo directors, eventually reaching a settlement that gave Icahn and two of his handpicked director nominees seats on the company&&9;s board.

"When I joined the board, the company was in a state of turmoil. In the period since then, we have all worked together to achieve much for the company, most notably bringing Carol on to be the CEO and then consummating the search deal with Microsoft," Icahn said in his letter.

"I am proud to have played a role in both these decisions."

Yahoo has said the search deal with Microsoft, which is awaiting regulatory approval, will allow it to save &&6;425 million in operating expenses and enable them to mount a more effective challenge to search leader Google Inc (GOOG.O).

Last week, Yahoo reported its third-quarter net income tripled thanks to cost-cutting and asset sales.

Icahn sold nearly 13 million Yahoo shares between August 27 and August 31 at prices ranging from &&6;14.75 to &&6;14.92, according to an SEC filing.

(Editing by Edwin Chan; editing by Carol Bishopric)

Carl Icahn quits Yahoo board, commends CEO

ISTANBUL (Reuters) – A newspaper report that Gulf Arab states are in secret talks to replace the U.S. dollar in the trading of oil is wrong, Saudi Arabia&&9;s central bank chief said on Tuesday.

Asked by reporters about the story in Britain&&9;s The Independent, Muhammad al-Jasser said: "Absolutely incorrect."

Asked whether Saudi Arabia was in such talks, he replied: "Absolutely not."

Asked whether Saudi Arabia was committed to the dollar, he said: "You asked the question, I answered it bad credit pay day loans. You asked about the story."

The Independent quoted unidentified sources as saying Gulf Arab states were in secret talks with Russia, China, Japan and France to replace the U.S. dollar with a basket of currencies in the trading of oil.

(Reporting by Simon Rabinovitch; Editing by Andrew Torchia)

Saudi central bank: report on replacing dollar is wrong

ISTANBUL (Reuters) – Fierce disagreement over how much power rich nations should cede to developing countries clouded talks between global finance chiefs on expanding the role of the International Monetary Fund.

The IMF, which has lent more than &&6;50 billion to countries around the world this year, says it needs more resources to oversee the recovery of the global economy and prevent future crises.

But this depends on giving emerging market economies a greater stake in the institution. Major developing nations are demanding an increase in voting power that would see the developed world shift at least 7 percentage points of its share to emerging countries.

"We can only hope that over-represented advanced countries will realize that they may do great harm to the Fund if they attempt to block or delay quota and voice reform," Brazilian Finance Minister Guido Mantega said on Sunday.

He said the Fund needed to change the structure of its board so it could "cease to be regarded as mainly an American-European institution and become a truly multilateral institution."

The Group of 20 major nations agreed at a summit of their leaders in Pittsburgh last month to a power shift of at least 5 percentage points to under-represented countries such as China.

But the demand for 7 percentage points is meeting resistance from the developed world, particularly European nations, which do not want to give up too much of their own power.

Finance Minister Anders Borg of Sweden, which is currently president of the European Union, warned that Europe could become less generous in its financial support of the Fund if it lost influence over it.

"Adequate participation in the decision-making process of the fund is a prerequisite for our taxpayers&&9; continued support of large financial contributions," he said fast payday loan no faxing.

DEMAND

Just a year ago the IMF was fighting to persuade governments of its importance. But the crisis has greatly increased demand for its loans and advice to countries struggling with budget and current account deficits.

Allowing big developing countries to play a bigger role in the IMF could secure billions of dollars of fresh contributions to the organization.

To ensure the global economy is stable enough for countries to stop accumulating huge foreign exchange reserves as a form of insurance, it is estimated that the IMF might need up to &&6;1 trillion of fresh contributions, IMF Managing Director Dominique Strauss-Kahn said on Friday.

But China, Brazil, Russia and India have said any increase in their contributions must be tied to changes in voting power.

China believes contributions should automatically adjust to reflect the size of individual countries&&9; economies, Yi Gang, a Chinese central bank vice governor, said on Sunday.

In addition to the IMF&&9;s role as a lender of last resort, the Group of 20 major nations, which is managing the global recovery, wants the IMF to ensure balanced growth by reporting back to it on countries&&9; policies and recommending changes.

China, which holds the world&&9;s largest foreign exchange reserves and has seen its financial markets buffeted by volatile capital movements, wants the activities of a reformed IMF to extend even further.

Yi said the IMF should strengthen its supervision over international capital flows and promote the relative stability of major reserve currencies.

(Editing by Andrew Torchia)

Dispute over control clouds IMF expansion

WASHINGTON (Reuters) – The Federal Reserve on Wednesday said that the U.S. economy was in recovery after a severe downturn and decided to slow purchases of mortgage debt to extend that program&&9;s life until the end of next March.

The Fed, as widely expected, held overnight lending rates at close to zero percent and repeated its intention to keep rates exceptionally low for an extended period.

"Information received since the Federal Open Market Committee met in August suggests that economic activity has picked up following its severe downturn," the Fed said a statement.

The Fed said that it would gradually slow the pace of its purchases of mortgage-related debt in order to promote a smooth transition in markets, but reiterated it would keep its options open.

"The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook," it said.

The Fed doubled the size of its balance sheet to around &&6;2 trillion as it flooded financial markets with money during the crisis last year. It has maintained this support through a campaign to buy &&6;300 billion of longer-dated U.S. government bonds and &&6;1.45 trillion of mortgage-related debt in an effort to keep lending rates low allstate insurance.

The Fed opted in August to taper down the Treasury purchases by the end of October, and had been expected to opt for a similar gradual withdrawal for its mortgage debt buying, which initially had been scheduled to close at year-end.

The U.S. central bank must walk a delicate path between acknowledging the recovery evident in the economy, and assuring investors that it remains tuned to the risks of a double dip recession as policy stimulus fades next year.

This means exiting in time from aggressive steps aimed at boosting growth to avoid igniting inflation as the economy picks up steam, while not smothering the recovery in the process.

Recent data has pointed to turnarounds in manufacturing, housing markets and consumer sentiment, and many analysts expect strong growth in the third quarter after four quarters of contraction. However, with unemployment at a 26-year high of 9.7 percent, most analysts nevertheless expect consumer spending to remain weak and damp the recovery.

(Reporting by Alister Bull, Editing by Andrea Ricci)

Fed says U.S. recovery is underway

NEW YORK (AFP) – Oil prices slipped Friday under pressure from a slightly stronger dollar and profit taking from recent gains.

New York&&9;s main contract, light sweet crude for October, dipped 43 cents to close at 72.07 dollars a barrel.

In London, Brent North Sea crude for November delivery dropped 23 cents to settle at 71.32 dollars.

"Oil prices have surrendered some recent gains with the US dollar finding some footing," said Mike Fitzpatrick of MF Global,

The New York futures contract remained above 72 dollars, at the higher end of the narrow trading range of the past three weeks.

The dollar&&9;s small appreciation weighed on dollar-priced oil, making it more expensive for buyers using weaker currencies.

However, the dollar&&9;s overall weakening trend -- it has sunk to a near-year low against the euro -- has been price-supportive of oil and other commodities.

Oil futures closed mainly flat Thursday despite positive US economic data as markets appeared to take a breather from recent gains driven by hopes of recovery from global recession.

"A raft of positive US economic data, from jobless claims to housing starts, continued to provide more evidence of a recovery at play, and should bode well for oil demand prospects in our view," said Amrita Sen of Barclays Capital free 3-in-1 credit report.

"In particular, diesel demand should be the main beneficiary from rising economic activity in the US, with an initial burst of goods restocking activity leading to a sharp improvement in diesel demand through the movement of more trucks and rail," he said.

Sen noted a "substantial" overhang in US diesel supplies that would take some time to erode.

After having closed slightly above 69 dollars a barrel a week ago, the New York contract hit 72.51 dollars Wednesday, thanks to weekly official data showing a large decrease in US crude reserves.

The surprise drop added to a growing outlook that the US economy, the world&&9;s largest energy consumer, is emerging from a deep recession that started in December 2007.

The decline was seen as an indication that US oil demand was improving but some analysts cautioned that stockpiles remained huge and prices had not returned to June highs.

Oil prices dip in profit taking

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