Already facing a spate of private lawsuits, the legal troubles of the country&S217;s largest credit rating agencies deepened on Friday when the attorney general of Ohio sued Moody&S217;s Investors Service, Standard &&8; Poor&S217;s and Fitch, claiming that they had cost state retirement and pension funds some $457 million by approving high-risk Wall Street securities that went bust in the financial collapse.

The case could test whether the agencies&S217; ratings are constitutionally protected as a form of free speech.

The lawsuit asserts that Moody&S217;s, Standard &&8; Poor&S217;s and Fitch were in league with the banks and other issuers, helping to create an assortment of exotic financial instruments that led to a disastrous bubble in the housing market.

&S220;We believe that the credit rating agencies, in exchange for fees, departed from their objective, neutral role as arbiters,&S221; the attorney general, Richard Cordray, said at a news conference. &S220;At minimum, they were aiding and abetting misconduct by issuers.&S221;

He accused the companies of selling their integrity to the highest bidder.

Steven Weiss, a spokesman for McGraw-Hill, which owns S.&&8; P., said that the lawsuit had no merit and that the company would vigorously defend itself.

&S220;A recent Securities and Exchange Commission examination of our business practices found no evidence that decisions about rating methodologies or models were based on attracting market share,&S221; he said.

Michael Adler, a spokesman for Moody&S217;s, also disputed the claims. &S220;It is unfortunate that the state attorney general, rather than engaging in an objective review and constructive dialogue regarding credit ratings, instead appears to be seeking new scapegoats for investment losses incurred during an unprecedented global market disruption,&S221; he said.

A spokesman for Fitch said the company would not comment because it had not seen the lawsuit.

The litigation adds to a growing stack of lawsuits against the three largest credit rating agencies, which together command an 85 percent share of the market. Since the credit crisis began last year, dozens of investors have sought to recover billions of dollars from worthless or nearly worthless bonds on which the rating agencies had conferred their highest grades.

One of those groups is largest pension fund in the country, the California Public Employees Retirement System, which filed a lawsuit in state court in California in July, claiming that &S220;wildly inaccurate ratings&S221; had led to roughly $1 billion in losses.

And more litigation is likely. As part of a broader financial reform, Congress is considering provisions that make it easier for plaintiffs to sue rating agencies. And the Ohio attorney general&S217;s action raises the possibility of similar filings from other states. California&S217;s attorney general, Jerry Brown, said in September that his office was investigating the rating agencies, with an eye toward determining &S220;how these agencies could get it so wrong and whether they violated California law in the process.&S221;

As a group, the attorneys general have proved formidable opponents, most notably in the landmark litigation and multibillion-dollar settlement against tobacco makers in 1998 faxless payday loan.

To date, however, the rating agencies are undefeated in court, and aside from one modest settlement in a case 10 years ago, no one has forced them to hand over any money. Moody&S217;s, S.&&8; P. and Fitch have successfully argued that their ratings are essentially opinions about the future, and therefore subject to First Amendment protections identical to those of journalists.

But that was before billions of dollars in triple-A rated bonds went bad in the financial crisis that started last year, and before Congress extracted a number of internal e-mail messages from the companies, suggesting that employees were aware they were giving their blessing to bonds that were all but doomed. In one of those messages, an S.&&8; P. analyst said that a deal &S220;could be structured by cows and we&S217;d rate it.&S221;

Recent cases, like the suit filed Friday, are founded on the premise that the companies were aware that investments they said were sturdy were dangerously unsafe. And if analysts knew that they were overstating the quality of the products they rated, and did so because it was a path to profits, the ratings could forfeit First Amendment protections, legal experts say.

&S220;If they hold themselves out to the marketplace as objective when in fact they are influenced by the fees they are receiving, then they are perpetrating a falsehood on the marketplace,&S221; said Rodney A. Smolla, dean of the Washington and Lee University School of Law. &S220;The First Amendment doesn&S217;t extend to the deliberate manipulation of financial markets.&S221;

The 73-page complaint, filed on behalf of Ohio Police and Fire Pension Fund, the Ohio Public Employees Retirement System and other groups, claims that in recent years the rating agencies abandoned their role as impartial referees as they began binging on fees from deals involving mortgage-backed securities.

At the root of the problem, according to the complaint, is the business model of rating agencies, which are paid by the issuers of the securities they are paid to appraise. The lawsuit, and many critics of the companies, have described that arrangement as a glaring conflict of interest.

&S220;Given that the rating agencies did not receive their full fees for a deal unless the deal was completed and the requested rating was provided,&S221; the attorney general&S217;s suit maintains, &S220;they had an acute financial incentive to relax their stated standards of &S216;integrity&S217; and &S216;objectivity&S217; to placate their clients.&S221;

To complicate problems in the system of incentives, the lawsuit states, the methodologies used by the rating agencies were outdated and flawed. By the time those flaws were obvious, nearly half a billion dollars in pension and retirement funds had evaporated in Ohio, revealing the bonds to be &S220;high-risk securities that both issuers and rating agencies knew to be little more than a house of cards,&S221; the complaint states.

Ohio Sues Rating Firms for Losses in Funds

WASHINGTON – The Securities and Exchange Commission must tighten its process for deciding which investment advisers to inspect if it is to avoid colossal breakdowns like the one that allowed Bernard Madoff's multibillion-dollar fraud to go undetected for 16 years, the agency's inspector general says.

A report released Thursday by the office of Inspector General David Kotz proposes new requirements that the SEC's inspections office examine databases and documents related to investment advisers that may be inspected.

The Office of Compliance Inspections and Examinations and the SEC's enforcement division should also establish procedures for sharing tips, complaints, disciplinary history and violations regarding investment advisers, Kotz recommends.

The IG's review found that the inspections office never undertook an exam of Madoff's investment business — which was separate from his brokerage operation — even after he was forced by the SEC in August 2006 to finally register the investment business.

The inspector general found that "failures to communicate" within the SEC led to the agency's OCIE never inspecting Madoff's investment business.

It was Kotz's second set of proposals for the OCIE in less than two months easy payday loans. In late September, he recommended that the office establish a specific process for identifying red flags and potential violations of securities laws.

Kotz has detailed how the SEC bungled five investigations of Madoff's brokerage business between June 1992 and last December, when the financier confessed to his sons that he was operating a fraudulent scheme. Top SEC officials have pledged to fix the problems and say they already have made major changes.

Madoff pleaded guilty in March to charges that his secretive investment operation was a multibillion-dollar Ponzi scheme that destroyed thousands of people's life savings and wrecked charities. He is serving a 150-year sentence in federal prison in North Carolina.

Kotz asked OCIE, the enforcement division and the division that oversees investment companies to submit a corrective action plan within 45 days to address the recommendations. The three entities, plus the office of SEC Chairman Mary Schapiro, told Kotz that they agree with his recommendations.

SEC told to improve ways it chooses probe targets

BARCELONA (Reuters) – Vivendi could exit from U.S. media group NBCU Universal as it has no intention to be part of the future joint venture being discussed by Comcast and General Electric, its chief financial officer said on Thursday.

Philippe Capron also told the Morgan Stanley Media & Telecoms conference that selling its 20 percent stake in NBCU would give Vivendi "additional financial headroom" after it gained control of Brazil&&9;s telecoms operator GVT last week.

"We are not interested in staying onboard a new GE-Comcast ownership of NBCU ... we will exit and it will give us more headroom," Capron said, adding "We are not there yet."

Capron later told Reuters on the sideline of the conference: "We have never been closer to the end of this story."

But Vivendi&&9;s board had made no decision on the matter, he said.

When asked if negotiations over NBCU were about the price, he said: "It often is."

General Electric, which owns 80 percent of NBCU, and Comcast Corp have agreed on the structure of the board for the proposed joint venture with NBC Universal, a person familiar with the matter said last week payday loans.

Any deal between GE and Comcast would depend on Vivendi selling its NBCU stake.

Each year between mid-November and mid-December, Vivendi has to decide whether to exercise its put option to sell the stake.

This year, Vivendi is eager to dispose of the stake and is determined to get good value for it, sources have said.

Last week, Vivendi snatched Brazilian telecom group GVT from under Telefonica&&9;s nose in a dramatic and high-priced purchase.

Vivendi&&9;s bid values GVT at 7.2 billion reais, or about &&6;4.8 billion against Telefonica&&9;s offer of &&6;4 billion.

Faced with a more costly acquisition pricetag, Vivendi was however more likely to now sell its holding in U.S. media group NBCU to help fund the deal, some analysts have said.

(Reporting by Dominique Vidalon and Georgina Prodhan; Editing by Jon Loades-Carter)

Vivendi eyes NBC Universal exit: CFO

CHICAGO (MarketWatch) -- After months of paying off debt, some Americans pulled out their credit cards and started charging in October, according to data from two credit tracking firms. The data suggest consumption habits don't ever really die, especially when the busiest shopping season of the year is at hand.

Synovate Mail Monitor and Credit Karma both said that average credit-card balances increased as consumers added new purchases. But Synovate also said that credit-card consolidation contributed to higher average balances.

The most recent government figures for consumers' use of credit are from September, when the Federal Reserve said outstanding consumer credit fell at a 7.2% annual rate, the eighth straight month of declines.

How much do you pay for your 401(k)?

Few investors know what they're paying in administrative and other fees for their 401(k), but there are ways to find out, says Ryan Alfred, president of BrightScope, a retirement-plan ratings and research firm. MarketWatch's Andrea Coombes reports.

Meanwhile, the U.S. Commerce Department said Monday that October sales increased more than expected, thanks mostly to an appetite for new cars, but also due to consumers buying a variety of other goods.

"It's silly to expect people to have a complete change in the model of how they buy things forever -- and especially in the holiday season," said John Ulzheimer, president of consumer education for Credit.com.

Synovate Mail Monitor, which tracks credit-card acquisition volume and response rates throughout the U.S., saw average balances edge up about 8% to $8,083 in the third quarter, from $7,489 in the second.

CreditKarma.com, a consumer research and credit-score site that follows a smaller percentage of cards, saw a bigger jump in card usage in October, with the average consumer carrying $7,573 of credit-card debt, a 14% increase from $6,641 a month earlier.

The holidays typically account for some 40% of spending at national retail stores with most shopping done in the four to six weeks before Dec. 25. But this year, Christmas came sooner as retailers began promotions and discounts as early as July.

"The seasonal aspect can be pretty strong," said Ken Lin, founder of Credit Karma. "Consumer spending is so much higher in the fourth quarter than any other quarter of the year."

Tighter limits also push balances higher

Anuj Shahani, director of competitive tracking services for Synovate, agrees that consumers are spending a little more but said the bigger impact on balances is a result of fewer cards and tighter credit limits in force payday loan lenders.

By Synovate's estimation, the average number of credit cards per household slipped to 2.8 in the third quarter from three in the first quarter. Many consumers saw their credit limits slashed, so some transferred their charging to one or two main cards. Consequently, the average balances went up.

Of course, one month does not make a trend. But if Americans' love affair with their credit cards is reheated, the eight months of steadfastly paying down debt may turn out to be nothing more than a temporary hiatus from credit cards.

"I don't see many people staying on the wagon and completely giving up credit cards permanently," said Credit.com's Ulzheimer. "As much as it pains me to say this, the best vehicle for buying things on a convenience basis is a credit card."

Sales rise in some sectors

There's no question that the consumer is still gun-shy about spending, despite the 1.4% rise in U.S. retail sales last month. The Commerce Dept. said a chunk of those sales were fueled by new demand in autos, rebounding from the post "cash for clunkers" stimulus crash.

Housing-related merchandise sales were sharply lower and electronic and appliance sales slipped, as did sporting goods and hobby sales.

But restaurant and bar sales, mail order and Internet purchases, and general merchandise sales got a boost -- all indicating that consumers were more flexible in their spending than they've been for most of the year.

What's troubling, however, is that last month also saw a slowdown in the number of credit-card defaults at a time when delinquencies -- mostly those 30 days or more late -- were on the rise. (Defaults, however, are still at high levels at the largest credit-card issuers.)

Delinquencies can be a harbinger of future losses and tend to lag default rates by three to six months. "It doesn't make any sense that delinquency rates are going up and default rates going down," Ulzheimer said. "There may be another wave of defaults coming."

Credit-card balances rise as holidays approach

DETROIT &<51; GMAC Financial Services, the former lending arm of General Motors, replaced its chief executive on Monday as it negotiates for another round of bailout financing from the federal government.

The company&S217;s directors appointed Michael A. Carpenter, a former Citigroup executive and current GMAC director, to succeed Alvaro de Molina, who had run the company since April 2008. Mr. Carpenter said the board believed that he would be more appropriate as chief executive than Mr. de Molina, who resigned at the board&S217;s request.

GMAC, in a statement, said it had asked the Treasury Department to postpone a decision on more aid under the Troubled Asset Relief Program until the new management team had &S220;assessed the current situation and can advise the board and Treasury regarding the appropriate amount and form of such funding.&S221;

GMAC already has received $12.5 billion from the government, which now owns almost 35 percent of the company, but was expected to ask for as much as $5.6 billion more this month. This year, the Treasury told GMAC, based on the results of stress tests to evaluate its liquidity, that it must raise $11.5 billion in capital by the end of November.

GMAC, a 90-year-old auto and home lender that was converted to a bank holding company last year to qualify for bailout financing, is the only bank of the 19 subjected to the stress tests that has been unable to borrow more capital from private investors.

&S220;We don&S217;t see any need for the maximum amount of capital that Treasury was anticipating putting in,&S221; Mr. Carpenter, 62, said in an interview.

&S220;The $5.6 billion is off the table business cards design. What the exact number is, I don&S217;t know.&S221;

Mr. Carpenter, who resigned from the board of the CIT Group to focus on his new position, said the board was not pressured by regulators to request Mr. de Molina&S217;s resignation.

GMAC is now the primary lender to dealers of both G.M. and Chrysler, and it provides financing to customers of both automakers as well. It also operates Ally Bank, an online retail bank.

The company lost $5.3 billion in the first nine months of the year.

Mr. Carpenter said he wanted GMAC to provide a financial backbone to a revitalized G.M. and Chrysler and to be able to repay most, if not all, of its financial lifelines.

Initially, many of GMAC&S217;s problems were created by subprime lending at its home mortgage unit, which racked up hundreds of millions of dollars in losses. The trouble was compounded by a severe slump in auto sales and a tightening of credit markets that in late 2008 virtually eliminated GMAC as a financing source for G.M. customers.

&S220;I came to GMAC thinking that it was a short-term assignment working through a liquidity crisis,&S221; Mr. de Molina, 52, said in Monday&S217;s statement. &S220;That crisis lasted two years. With the help of government support and the incredible efforts of our team, we are now on stable footing, positioned for profitability in 2010 and beyond.&S221;

Michael J. de la Merced contributed reporting from New York.

A Change at the Top of GMAC as It Negotiates for Another Government Bailout

BEIJING (Reuters) – China should keep the yuan stable, in part because that is beneficial for a global economic recovery, a Commerce Ministry spokesman said on Monday.

The yuan&&9;s exchange rate has little to do with its trade imbalance, spokesman Yao Jian told a news conference.

He added that it was unfair to urge just one country to increase the value of its currency, as other currencies fall in value.

Yao was speaking shortly after International Monetary Fund Managing Director Dominique Strauss-Kahn said a stronger yuan is part of the reforms that Beijing needs to implement to increase domestic consumption and help ease global imbalances fast cash.

(Reporting by Aileen Wang and Jason Subler; Editing by Ken Wills)

China should keep yuan stable: commerce ministry

BEIJING, Nov. 15 (Xinhua) -- China should enhance supervision and management of the country's insurance investment, said Li Kemu, vice chairman of the China Insurance Regulatory Commission (CIRC),on Sunday.

"With insurance funds were extended into disparate fields, other than bank deposit, demand for a better supervision and risk control enhanced, said Li at the International Finance Forum held in Beijing.

By the end of September, 3.4 trillion yuan (497.8 billion U.S. dollars) of insurance funds were invested in bonds, mutual funds, and stocks markets. Bonds investment alone accounted for 50.6 percent of the total.

Jiang Dingzhi, China Banking Regulatory Commission (CBRC) Vice Chairman also highlighted the importance of establishing a "all-coverage" financial supervision system guaranteed online payday loans.

He suggested the country broaden the financial supervision and management system, which would put the mutual funds, hedge funds, and credit risks appraisal agencies under control.

The new system requires financial institutions to share information, and also cooperate to fill the supervision blanks between different financial markets, he said.

Chinese insurance regulator stresses supervision on insurance investment

SAN FRANCISCO/LOS ANGELES (Reuters) – Wal-Mart Stores Inc (WMT.N) is helping "well over 1,000" of its apparel suppliers secure financing based on the strength of its own credit rating.

The program, outlined in a November 2 letter to suppliers, was designed to address concerns about liquidity, company spokesman John Simley said.

"We didn&&9;t want our suppliers to be in a position where they could not secure financing at an attractive rate," he said.

Under its "Supplier Alliance Program," an eligible supplier can go to a bank with a purchase order from Wal-Mart and the bank can arrange for financing based on Wal-Mart&&9;s strong financial position.

The retailer, which has a AA credit rating, said it has partnered with Wells Fargo & Co (WFC.N) and Citibank Inc (C.N) to provide the program.

"We&&9;re not underwriting and we&&9;re not extending our (credit) rating," he said.

Factors buy receivables -- or the right to receive money owed by retailers -- from suppliers at a discount so that those suppliers continue to have working capital.

But worries about the health of factors has heightened following the November 1 bankruptcy of CIT Group Inc (CITGQ easy payday loans.PK), a major player in the factoring industry.

"We know that many of our suppliers are dependent upon factoring and financing companies that are reportedly in financial distress," Wal-Mart wrote in its letter to supplies.

"We are contacting you as part of our effort to proactively minimize the exposure of our supplier base to the financial difficulties of any particular factoring source."

Wal-Mart&&9;s ultimate goal with the program though is to keep its own costs down.

"It gives us a more secure supply of the things we need to sell and, if the suppliers are getting a little bit better rate because their loan was negotiated on the strength of our financial position, we can lower our costs and that can be passed on in the form of lower prices," Simley added.

(Reporting by Nicole Maestri and Lisa Baertlein; editing by Leslie Gevirtz and Andre Grenon)

Wal-Mart helps apparel suppliers secure financing

NEW YORK (Reuters) – Gold retreated from a record high above &&6;1,120 an ounce on Thursday and global stocks lost ground as doubts about a lasting economic recovery underpinned the dollar.

Stocks slumped as the U.S. dollar strengthened against other currencies, also on technical factors.

The yellow metal pushed to a record high on the momentum of months of dollar weakness, only to drop &&6;15.35 to &&6;1,102.40 as the currency recovered. A weak greenback makes metals priced in dollars less expensive for holders of other currencies.

Gold&&9;s rally from near &&6;800 an ounce in January and the upcoming yearend also prompted investors to book profits.

"Gold&&9;s weakness (on Thursday) was a reflection of profit-taking after the metal&&9;s recent impressive run," said Peter Buchanan, commodities analyst at CIBC.

The dollar also rose after the euro failed to break through and hold above the psychologically important 1.50 level. The euro declined 0.92 percent to &&6;1.4843. The dollar rose 0.56 percent against the Japanese yen, to 90.32 yen.

Prospects that U.S. interest rates will remain at negligible levels for some time are expected to continue weighing on the dollar. It rebounded 0.67 percent against a basket of major currencies on Thursday but is still down nearly 1 percent this month and 14.5 percent since early March.

With a light economic data calendar on Thursday, apart from strong Australian jobs numbers that boosted the Aussie dollar to a 15-month high, the broader market consolidated.

In the U.S., the Labor Department reported that first time claims for unemployment insurance fell to 502,000 in the latest week from 514,000 in the previous period. That was less than forecast, but supported the view of a fragile recovery ay day loans.

STOCKS WEAKER

World stocks weakened, with the MSCI all-country world index (.MIWD00000PUS) down 0.9 percent and the emerging market component (.MSCIEF) off 1.36 percent.

The main U.S. indexes drifted lower. The Dow Jones Industrial Average (.DJI) busted a six-session rally as a stronger dollar hurt commodity shares. Wal-Mart Stores Inc (WMT.N), the world&&9;s biggest retailer, forecast holiday profit that could miss Wall Street expectations but its shares still managed a slight gain.

The Dow Jones average fell 93.79 points, or 0.91 percent, to 10,197.47. The Standard & Poor&&9;s 500 Index (.SPX) declined 11.27 points, or 1.03 percent, to 1,087.24 and the Nasdaq Composite Index (.IXIC) edged lower by 17.88 points to 2,149.02.

European shares dropped with the FTSEurofirst 300 (.FTEU3) index off 0.1 percent to 1,014.91.

Investors globally remained fairly bullish, however, with signs parts of the world economy are gaining traction.

The Baltic Dry Freight Index (.BADI), which can be a proxy for world trade patterns, rose 5.5 percent, pushed up by freight of iron ore to China.

"A 10th straight increase for the Baltic Dry and a 15-month high for AUD/USD (Australian/U.S. dollar) do not imply that sentiment is about to turn over," Kenneth Brough, an economist at Lloyds TSB, said in a research note.

U.S. Treasuries climbed after the government wrapped up &&6;81 billion of sales this week, and as falling stocks increased the allure of bonds as a haven from risk.

The yield on the benchmark 10-year Treasury note fell by 0.04 percentage point to 3.44 percent.

Dollar bounce triggers gold fall, stocks drop

Hot News: APEC Ministers say Economic Recovery is Fragile

NEW YORK/SAN FRANCISCO (Reuters) – Hewlett-Packard Co (HPQ.N) struck a deal to buy network equipment maker 3Com Corp (COMS.O) for &&6;2.7 billion to step up competition against Cisco Systems Inc (CSCO.O) and expand into China.

HP said it would pay &&6;7.90 per share for 3Com, or a premium of 39 percent over its Wednesday closing price on Nasdaq.

The move comes amid a flurry of acquisitions by Cisco and other technology vendors trying to broaden their product portfolios and provide a one-stop shop for computing, networking and storage equipment.

"It gives HP additional scale within the low-to-mid tier wireless and networking market. It matches up with HP&&9;s switches that compete with Cisco," said Shannon Cross at Cross Research.

3Com, which has a large presence in China, has been pushing into the large enterprise market outside that country with its H3C brand, trying to take on giants like Cisco.

The company has been an acquisition target before. In 2008, Bain Capital Partners and China&&9;s Huawei Technologies (HWT.UL) tried to buy 3Com for &&6;2.2 billion but failed to win approval from a U.S. government security panel bad credit cash loan. Huawei is a privately held company set up by a former Chinese army officer.

Analysts said that by buying 3Com, HP will be competing head to head with Cisco in the networking equipment market. Cisco recently entered the server market, where HP is strong.

"HP has started to find success competing in the communication space. It has been competing with Cisco. To that degree, this is also something in that category," said Lou Miscioscia, analyst at Brigantine Advisors.

The terms of the deal were approved by the HP and 3Com boards of directors, but needs shareholder approval. The deal is expected to close in the first half of 2010.

HP also reported preliminary quarterly profit and revenue that beat analysts&&9; expectations, and raised its outlook for fiscal 2010.

3Com shares jumped 35 percent to &&6;7.66 in after-hours trading. HP shares edged 0.4 percent lower to &&6;49.80.

(Reporting by Sinead Carew, Ritsuko Ando and Gabriel Madway; Editing by Carol Bishopric, Bernard Orr)

HP to buy 3Com for $2.7 billion

Hot News: Macys Q4 forecast disappoints; shares fall

A day after a spirited rally sent the Dow to its highest levels since the beginning of the financial crisis, Wall Street took a moment to breathe, with stocks showing little or no gains on Tuesday.

From the opening bell to the close, the enthusiasm of Monday&S217;s rally, which pushed the Dow up more than 200 points, seemed to have dissipated. The dollar remained weak, and a rush for gold slowed slightly.

At the end, the Dow Jones industrial average was up 20.03 points, or 0.2 percent, at 10,246.97. The broader Standard and Poor&S217;s 500-stock index declined less than a point to 1,093.01, and the technology-heavy Nasdaq composite index fell 2.98 points, or 0.14 percent, at 2,151.08.

The stock exchanges will be open Wednesday on Veteran&S217;s Day, but the bond markets will be closed.

Shares of financial companies, particularly regional banks, were among laggards. Zions Bancorp declined 7.66 percent, to $13.26; SunTrust fell 3.38 percent, to $20.29; and Huntington Bancshares 3.55 percent, to $3.80. Bank of America, however, rose 1.65 percent, to $16.03, after it said that its integration with Merrill Lynch would generate more savings than expected. American Express rose 1.6 percent, to $39.68, on reports that worldwide credit card spending had increased by 3 percent in October &<51; a sign that consumers might be more optimistic about spending.

The dollar, which has lost 16 percent of its value since March, continued to trade near $1.50 against the euro and fell against other currencies as well. While the dollar is considered a safe-haven investment, low interest rates have kept its yield down, and in response investors have thrown their money to Wall Street in search of higher returns. The price of gold, which in recent weeks has hit record highs nearly every day, climbed slightly, to $1,105.60 an ounce.

Even as the stock market continues an eight-month rally, there are concerns over the speed of a recovery. On Tuesday, the presidents of the Federal Reserve banks in San Francisco and Atlanta suggested that unemployment, which hit a 26-year high in October, could continue to remain high for several years. Janet Yellen, president of the Federal Reserve in San Francisco, said growth was sustainable but that it would not happen fast enough to bring down unemployment anytime soon.

&S220;High unemployment, weak job growth and paltry wage increases are a recipe for sluggish consumer spending growth and a tepid recovery,&S221; Ms no fax payday loans. Yellen told a real estate group in Phoenix.

Also on Tuesday, Senator Christopher J. Dodd, Democrat of Connecticut, who heads the Senate banking committee, released a proposal to overhaul the financial system. He called for establishing an agency to protect consumers and for giving the government more authority to break up companies that pose a threat to the stability of the system.

Oil prices settled down 38 cents, at $79.05 a barrel, as a tropical storm in the Gulf of Mexico began to subside.

Investors expect earnings reports from major retailers later this week, including Macy&S217;s, Wal-Mart and J. C. Penney. As the holiday season approaches, those results will give a snapshot of the state of consumer spending, which makes up about 70 percent of the United States economy.

Doug Roberts, chief investment strategist for ChannelCapitalResearch.com, said investors were ignoring signs that consumer spending might be weak in the coming months, given cost-cutting by companies and a steady rise in the unemployment rate.

&S220;Nobody wants to fight the rally,&S221; he said. &S220;The market is showing a natural pullback at this point, and we will probably see a consolidation phase for awhile.&S221;

In London, shares of HSBC were about 4 percent higher after the bank said its profit in the quarter ended in September was &S220;significantly ahead&S221; of a year earlier. Shares of a rival, Barclays, were down 5.1 percent after profit declined 54 percent. And the Lloyds Banking Group&S217;s shares dropped slightly after the bank announced plans to lay off an additional 5,000 workers.

Ken Mayland, president of ClearView Economics in Ohio, said Wall Street would probably continue to inch upward, with occasional downturns, as investors gunned for a strong finish to 2009.

&S220;There&S217;s a lot of money on the sidelines that has missed out on stocks being up,&S221; Mr. Mayland said. &S220;And time to the year-end is getting short.&S221;

The Treasury&S217;s 10-year note rose 4/32, to 101 8/32. The yield fell to 3.47 percent from 3.49 percent on Monday.

Following are the results of Tuesday&S217;s Treasury auction of four-week bills and 10-year notes:

Wall St. Takes a Breather And Shares Close Flat

Hot News: Possible Property Bubble Has Singapore Officials Worried

BEIJING, Nov. 8 (Xinhua) -- The output value of China's energy saving and environmental protection industry would hit 2.8 trillion yuan (412 billion U.S. dollars) by 2012, said Xie Zhenhua, deputy director of the National Development and Reform Commission on Sunday.

Those sectors have become a new economic growth point and have bright prospects in China, Xie said at the fourth China-Japan Energy-saving and Environment Protection Forum which began Sunday.

He said the government will beef up investment in the construction of resource recycling projects, which will directly boost the industry development.

He noted the government will further reform the pricing system of the resource products online payday loans.

Enterprises should also enhance innovation to break technological bottleneck notably in the development of clean coal transfer technology and pollutants treatment facilities.

China has been pushing for a national energy saving campaign to address the worsening conflicts between economic growth and environmental deterioration.

China's energy-saving, environmental protection industry has bright prospect

SINGAPORE, Nov. 8 (Xinhua) -- The Concluding Senior Officials' Meeting of the Asia-Pacific Economic Cooperation (APEC) opened here Sunday, kicking off the APEC Leaders' Week.

Senior officials' meetings of the APEC are a series of meetings held three or four times a year, with the concluding session being convened to prepare agenda and documents for the subsequent ministerial and leaders' meetings.

The theme of this year's APEC Singapore meetings is "Sustaining Growth, Connecting the Region" No teletrak payday loan. It is expected that when leaders of the 21 APEC members meet on Nov. 14-15, they will focus on how to secure an economic recovery and fight trade protectionism. Backgrounder: APEC Senior Officials' Meetings

Concluding Senior Officials' Meeting of APEC opens

WASHINGTON (Reuters) – Bank regulators closed Gateway Bank of St. Louis, in St. Louis, Missouri, and Prosperan Bank, of Oakdale, Minnesota, on Friday, the 118th and 119th U.S. bank to fail this year.

The Federal Deposit Insurance Corp said Gateway Bank of St Louis had &&6;27.7 million in assets and &&6;27.9 million in deposits. The bank&&9;s sole office will reopen on Saturday as a branch of Central Bank of Kansas City, Missouri, which assumed Gateway&&9;s assets bad credit payday advance.

The FDIC entered into an agreement with Alerus Financial NA, of Grand Forks, North Dakota, to assume all of Prosperan&&9;s &&6;175.6 million in deposits and about &&6;173.9 million of its &&6;199.5 million in assets.

(Reporting by Charles Abbott; editing by Carol Bishopric)

U.S. regulators close Gateway Bank, Prosperan Bank

SAN FRANCISCO – The Gymboree Corp. on Thursday said its third-quarter sales at stores open at least a year fell 4 percent, but the children's retailer nevertheless raised its profit forecast for the period.

The figure is an important gauge of retail health, because it measures performance at existing stores, rather than newly opened ones.

Net sales for the quarter ended Oct. 31 rose 2 percent, to $265.6 million, from $261.3 million a year ago.

Analysts polled by Thomson Reuters, on average, were expecting sales for the quarter of $273 business cards.5 million

Gymboree now expects third-quarter profit between $1.10 and $1.13 per share, up from its prior forecast of between $1.05 and $1.10 per share. Analysts project a profit of $1.10 per share.

The company plans to report full third-quarter results on Nov. 18.

Gymboree shares fell $2.36, or 5.4 percent, to $41.17 in morning trading.

Gymboree 3rd-qtr sales comparison falls 4 percent

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