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SAN DIEGO – Investigators are confronted with a series of nagging questions as they try to unravel the case of a California real estate agent who said his Toyota Prius turned into a runaway death trap after the gas pedal became stuck.

Why didn’t the driver simply throw the transmission into neutral as officers urged him to do? Why didn’t a safety mechanism activate that was supposed to cut power to the engine in such situations? And could he have made the story up in pursuit of fame and money?

Each question is getting scrutiny from the Internet-consuming public as they question the motives of the driver, a 61-year-old real estate agent named James Sikes. Some skeptics have even invoked the infamous “balloon boy hoax” in expressing doubts about the story.

No evidence has emerged to suggest that Sikes was dishonest when he called 911 on Monday to report that the accelerator of his 2008 Prius was jammed during a trip home from his lawyer’s office.

Sikes and his car emerged unscathed, but the incident has been another major headache for the Japanese automaker amid questions over the safety and reliability of its vehicles.

The California Highway Patrol has repeatedly said it has no reason to suspect a hoax. It does not plan to investigate the incident or perform a mechanical inspection because there were no injuries or property damage. Investigators from Toyota and the federal government are also looking into the incident.

“There is no factual information that I’m aware of, or the highway patrol is aware of, that would discredit his story,” agency spokesman Brian Pennings said Friday.

Sikes spoke to throngs of reporters twice this week about his ordeal, but he has but he has not sought out attention or talk show interviews like others have done during their 15 minutes of fame. Pennings said he urged Sikes to speak with reporters the first time, on Monday, after the white-knuckled journey down Interstate 8 to avoid getting besieged later by the media.

And a law firm representing Sikes during the investigation said its client does not intend to take legal action against the automaker.

Doubters have asked why Sikes didn’t put the car in neutral as a California Highway Patrol dispatcher and an officer repeatedly urged him to do. Sikes said he considered going into neutral but worried he might go into reverse or flip.

“I had never played with this kind of transmission, especially when you’re driving, and I was actually afraid to do that,” he said Tuesday. “I was afraid to do anything out of the normal.”

Toyota has said all Priuses are equipped with a computer system that cuts power to the wheels if the brake and gas pedals are depressed at the same time, as Sikes was doing.

“It’s tough for us to say if we’re skeptical. I’m mystified in how it could happen with the brake override system,” Don Esmond, senior vice president of automotive operations for Toyota Motor Sales, said Thursday.

Raj Rajkumar, an electrical and computer-engineering professor at Carnegie Mellon University in Pittsburgh who studies auto electronics, said the Prius could still have acceleration malfunctions even with the fail-safe system.

Toyota says the fail-safe and the engine are controlled by a central computer that contains two independent microprocessors that communicate and must agree with each other free business cards. If there’s a disagreement, power would be cut to the wheels.

But Rajkumar said the two engine control unit microprocessors could still receive common erroneous signals from sensors or experience software errors that could cause the throttle and the fail-safe mechanism to malfunction.

Sikes came to a stop after a Highway Patrol officer blared instructions from a loudspeaker, telling him to push the brake pedal to the floor while applying the emergency brake. Sikes apparently did this, allowing him to slow the car to 50 mph and shut off the engine.

At one point during the 911 call, the dispatcher asks if he can press the ignition button for five seconds and she gets no response. Sikes said later that he struggled to hold the phone and keep his hands on the wheel.

Todd Neibert, the officer who gave instructions to Sikes over a loudspeaker, said he smelled burning brakes when he caught up with the Prius. He examined the car when it came to a stop.

“The brakes were definitely down to hardly any material,” he told reporters. “There was a bunch of brake material on the ground and inside the wheels.”

Sikes said afterward that he was “embarrassed” by the incident, suggesting that he wished he would have handled it differently. “I’m just embarrassed about that,” he said. “You have to be there. That’s all I can say.”

Kurt Bardella, a spokesman for Rep. Darrell Issa, R-Calif., said Friday that investigators are best positioned to determine if there was a hoax, but no evidence has emerged.

A representative of Issa’s office was at a California Toyota dealership when investigators from the National Highway Traffic Safety Administration and Toyota examined Sikes’ blue Prius on Wednesday and Thursday.

“Where are these suggestions coming from?” he said. “It would be irresponsible to assert it’s a hoax without having facts.”

Joan Claybrook, a former NHTSA administrator, said Sikes’ refusal to shift to neutral, is understandable.

“It’s such a horrifying experience to be completely out of control,” she said. “It’s the kind of thing you dream about when you’re really upset and you wake up in sweats.”

The same firm handling Sikes’ case also represents the family of California Highway Patrol Officer Mark Saylor, which sued Toyota last week in San Diego Superior Court.

Saylor was killed in August along with his wife, her brother and the couple’s daughter after their Lexus accelerator became trapped by a wrong-size floor mat on a freeway in La Mesa, near San Diego. Their loaner car hit a sport utility vehicle and burst into flames.

Representatives of the firm did not respond to phone messages seeking additional comment Friday.

Claybrook, the former federal administrator, noted that drivers often come under heavy scrutiny for reporting unintended acceleration.

“Attacking the driver has long been the answer that not just Toyota, but the entire industry, has had,” she said. “Blaming the driver is old hat.”

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AP Auto Writer Tom Krisher in Troy, Mich., contributed to this report.

Runaway Prius case presents nagging questions

NEW YORK – Tim Burton and Johnny Depp’s trip down the rabbit hole drew huge crowds, as “Alice in Wonderland” earned a whopping $116.3 million in its opening weekend — a record for a 3-D film.

The surprisingly huge total easily surpassed all other films in release and gave Walt Disney Studios an even bigger opening than that of the hugely popular 3-D film “Avatar.” It also marked the biggest opening weekend for a non-sequel.

“This is just one of those cultural phenomenons that has caught everybody’s interest,” said Chuck Viane, Disney’s president of distribution. “They don’t come like this very often.”

The film beat forecasts that ranged between $65 million-$75 million, and the surprising results added some intrigue to Oscar Sunday. Before the weekend, Disney and 20th Century Fox competed over the available 3-D ready screens; screens outfitted for 3-D are rapidly rising, but still amount to fewer than 4,000 in the U.S. and Canada.

Before “Alice,” many of those screens were still dedicated to Fox’s box-office behemoth, “Avatar,” which is up for nine Academy Awards on Sunday, including best picture.

In its 12th week of release, “Avatar” earned $7.7 million over the weekend, bringing its cumulative domestic total to $720.2 million.

Asked whether fewer 3-D and IMAX screens hurt “Avatar,” Chris Aronson, head of distribution for Fox, said, “No question.”

“Are we disappointed? Sure,” said Aronson. “But there are certain market forces that are beyond anything we can do. To have an 11-week window is pretty much unheard of. It certainly allowed this movie to be discovered and witnessed by so many people.”

“Avatar” isn’t disappearing, though, and it can be expected to regain 3-D and IMAX screens, especially if it wins best picture.

“We’ll have that negotiation tomorrow morning with exhibition, without a doubt,” said Aronson.

It also seemed likely that “Alice” benefited from the “Avatar”-effect in galvanizing audiences for 3-D movies. “Alice in Wonderland” is the first film released in 3-D since James Cameron’s epic. “Alice” was shot in 2-D, but transferred to 3-D in post-production.

“In the wake of the impact of `Avatar,’ there’s a whole new audience that’s been indoctrinated to 3-D,” said Paul Dergarabedian, box-office analyst for Hollywood.com. “That paid off big for `Alice in Wonderland.’”

The weekend’s second best performer at the box-office was Overture’s “Brooklyn’s Finest,” Antoine Fuqua’s gritty police thriller, which earned $13.5 million in its first weekend, according to studio estimates.

Martin Scorsese’s “Shutter Island” for Paramount followed closely with $13.3 million in its third week of release, bringing its cumulative total to $95.8 million. Warner Bros.’s comedy “Cop Out” came in fourth, adding $9.1 million for a two-week total of $32.4 million.

But “Alice” thoroughly dominated the weekend, surprising even Disney. Worldwide, it took in $210.3 million.

It was a record release for the first quarter of the year, typically a time of lower box-office expectations and critically acclaimed Oscar contenders. The previous first quarter record was Mel Gibson’s “Passion of the Christ,” which opened with $83.8 million in Feb. 2004.

“We went into Friday thinking that we really had a big hit with us, and then all of a sudden the numbers started to roll in,” said Viane inferred heaters. “Alice” went on to make $41 million on Friday alone.

“We said, `Oh my gosh. This is bigger than any of us could have anticipated,” said Viane.

Though reviews were mostly respectfully negative, much of the film’s draw was surely in teaming director Burton and his frequent collaborator, Depp, who plays the Mad Hatter. It also presented moviegoers with a 3-D updating of Lewis Carroll’s beloved classic. Though at times dark, it gained a PG rating from the MPAA (for, among other things, “a smoking caterpillar”), which meant a large number of kids could attend.

But it proved once again how significant the draw of 3-D is to moviegoers. The technology repeatedly has inflated box-office grosses for everything from “Avatar” to “Cloudy with a Chance of Meatballs.”

“Alice” also played across 188 IMAX screens in North America and gave IMAX its best opening ever, with $11.9 million domestically. That beat the previous record of $9.5 million set by “Avatar.”

IMAX chairman and president Greg Foster said the huge success of “Alice” was unexpected, but that “Avatar” would regain some of those IMAX screens, whether or not it wins best picture.

“The momentum on 3-D is so massive right now,” said Foster. “They were ready for a new movie. They were ready for a new, cool 3-D experience.”

Though most of the Oscar contenders weren’t a big factor at the box-office Sunday, the boffo performance of “Alice” proved the good health of Hollywood, said Dergarabedian.

Estimated ticket sales for Friday through Sunday at U.S. and Canadian theaters, according to Hollywood.com. Final figures will be released Monday.

1. “Alice in Wonderland,” $116.3 million.

2. “Brookyn’s Finest,” $13.5 million.

3. “Shutter Island,” $13.3 million.

4. “Cop Out,” $9.1 million.

5. “Avatar,” $7.7 million.

6. “The Crazies,” $7 million.

7. “Percy Jackson & the Olympians: The Lightning Thief,” $5.1 million.

8. “Valentine’s Day,” $4.3 million.

9. “Crazy Heart,” $3.4 million.

10. “Dear John,” $2.9 million.

___

On the Net:

http://www.hollywood.com/boxoffice

___

Universal Pictures and Focus Features are owned by NBC Universal, a unit of General Electric Co.; Sony Pictures, Sony Screen Gems and Sony Pictures Classics are units of Sony Corp.; Paramount and Paramount Vantage are divisions of Viacom Inc.; Disney’s parent is The Walt Disney Co.; Miramax is a division of The Walt Disney Co.; 20th Century Fox, Fox Searchlight Pictures and Fox Atomic are owned by News Corp.; Warner Bros. and New Line are units of Time Warner Inc.; MGM is owned by a consortium of Providence Equity Partners, Texas Pacific Group, Sony Corp., Comcast Corp., DLJ Merchant Banking Partners and Quadrangle Group; Lionsgate is owned by Lions Gate Entertainment Corp.; IFC Films is owned by Rainbow Media Holdings, a subsidiary of Cablevision Systems Corp.; Rogue Pictures is owned by Relativity Media LLC; Overture Films is a subsidiary of Liberty Media Corp.

‘Alice’ opens with $116.3 million, a 3-D record

Hot News: Congressional estimates show grim deficit picture

NEW YORK (AFP) – Embattled US automaker General Motors on Wednesday announced its vice chairman Robert Lutz would retire in May.

"Lutz will retire effective May 1, 2010, capping a 47-year career in the global auto industry that included senior leadership positions at four of the world?s leading automakers," GM said in a statement personal business card.

GM says vice chairman to step down in May

ZURICH — A Swiss court ordered tax officials to drop two more cases involving account holders of the banking giant UBS, adding urgency to the government’s effort to find a political solution that would preserve a data-sharing agreement with American regulators.

The Federal Administrative Court, in a decision published on Friday, told Switzerland’s tax authority to comply with an earlier ruling that blocked it from sending American regulators information on 26 UBS customers. The court, located in Bern, said Switzerland could lift bank secrecy rules only when there was evidence of tax fraud.

The decision increases pressure to find a way to salvage the agreement to hand over data on as many as 4,450 UBS account holders as part of an American crackdown on tax evasion. Parliament, however, may be asked to approve the settlement to get around the court rulings cheap payday advance.

With parliamentary approval, the court will not be able to “regard the UBS agreement as merely a mutual agreement” as it will have the same legal weight as a treaty, the government said.

The two UBS clients involved in the latest decision are among 26 covered by last month’s ruling. The court said that the account holders’ conduct — failing to complete tax forms or declare income — was tax evasion rather than tax fraud. Under Swiss law, tax fraud is a criminal offense, while evasion is a civil matter.

Officials with UBS, the Swiss Federal Tax Administration and the Internal Revenue Service all declined to comment.

U.S.-UBS Deal Is Undermined by Swiss Ruling

JOB PICTURE STILL BLEAK: New claims for jobless benefits rose sharply last week, the Labor Department said Thursday. Most of the rise resulted from state agencies processing a backlog of claims left over from two weeks ago when snowstorms closed government offices.

IMPROVEMENT STALLS: Still, a steady drop in claims in the second half of last year has stalled, a sign layoffs are no longer declining cheap business cards. More layoffs could weaken consumer spending and slow the recovery.

WEAK ECONOMY: Other recent economic reports have also been disappointing, evidence that economic growth may weaken later this year.

Summary Box: Jobless claims rise in weak recovery

LONDON (AFP) – World oil prices plunged on Friday as traders took their cue from the strengthening US dollar and eyed a crucial update on energy stockpiles in the United States, analysts said.

New York's main futures contract, light sweet crude for delivery in March, fell 1.64 dollars to 73.64 dollars a barrel.

Brent North Sea crude for March delivery plunged 1.48 dollars to 72.64 dollars a barrel.

Oil sank after the European single currency fell close to a nine-month dollar low, as markets took a dim view of eurozone growth data and unclear EU proposals to help debt-ridden Greece.

In late morning London trade, the euro tumbled to 1.3532 dollars, the lowest level since May 19. That compared with 1.3695 in New York late on Thursday.

A stronger dollar usually dampens demand for oil because it makes dollar-priced crude more expensive for buyers using weaker currencies.

"While European key players and the IMF will not allow a complete failure of Greece, the euro is likely to remain under pressure from the issue and similar concerns for other countries in the region," said analysts at the JBC Energy consultancy in Vienna.

EU leaders stopped short Thursday of offering a bailout to rescue eurozone member Greece. Deep problems in Greek public finances have highlighted the parlous debt of other crisis-hit countries such as Italy and Spain.

Investors also sought the safe-haven dollar after China ordered financial institutions to increase the amount of money they keep in reserve, as Beijing looked to rein in rampant lending amid fears of asset bubbles no fax needed payday loans.

The development was an additional concern for the oil market because China is the world's second biggest energy consuming nation after the United States.

Later Friday, traders will digest a key US inventories report for the week ending February 5. The report, usually published on Wednesdays, was delayed due to a snowstorm in the northeastern US.

This week, crude futures have edged higher as investors mulled the prospect of EU financial support for crisis-hit Greece — and as the US east coast experienced its second huge snowstorm in less than a week.

The International Energy Agency forecast on Thursday that world oil demand and prices would rise this year, driven higher by strong growth in emerging economies, revising upward its earlier forecasts.

The Paris-based agency said demand was now expected to be 86.5 million barrels per day in 2010 compared to a forecast last month of 86.3, while average prices will rise to 75 dollars per barrel from 58 in 2009.

Global daily demand is now estimated at 84.9 million barrels per day (mbd) in 2009, and thus the IEA is predicting a 1.6-mbd increase.

Demand growth is expected to come "entirely" from outside the Organisation for Economic Cooperation and Development (OECD), a grouping of 30 developed economies including Britain, France, Germany, Japan and the United States.

Oil prices slide on back of strong dollar

SINGAPORE — Singapore Airlines, one of the world’s biggest carriers by market value, on Tuesday reported its best quarterly profit in almost two years as cargo volumes rebounded and travel improved.

The airline industry is recovering from its worst downturn last year, but growth in the more profitable business class segment, where SIA thrives, is slow and could take time to capture pre-crisis level.

“Passenger loadings in January and bookings in hand indicate that the recovery in the third quarter is likely to continue in the final quarter of the current financial year,” SIA said in a statement.

“The business outlook for the group in 2010 is encouraging, but it must be acknowledged that uncertainties linger over the global economy.”

The Singapore carrier saw a strong December when cargo traffic turned positive for the first time in 19 months and year-end travel boosted demand, but it has trailed the recovery seen by Hong Kong’s Cathay Pacific, which is helped by China’s strong demand.

CLSA expects February’s Singapore Airshow could boost premium traffic and the mass market could benefit from the opening of the city-state’s two casino resorts later this year fast cash advance.

But the aviation industry body I.A.T.A. said last week the sector could face a tough 2010, making up for the lost demand in 2009 and handling new security demands.

SIA, 55 percent-owned by state investor Temasek Holdings, reported a net profit of 403.7 million Singapore dollars ($286.3 million)) in its third quarter, its highest quarterly profit since March 2008.

The results compared to a net profit of 337 million Singapore dollars a year ago, but below analysts’ average forecast of 448 million Singapore dollars.

Earnings from U.S. rivals so far this quarter have been mixed, raising concerns about the industry’s recovery.

At the close of trade, SIA shares were down 8.6 percent since the start of the year compared to an 9.4 percent drop in shares of Cathay Pacific and a 6 percent drop in the broader Singapore market.

Reuters

Singapore Air Profit Rises as Demand Bounces Back

Hot News: UBS falls after Swiss minister comments on U.S. row

PORT ARTHUR, Texas – About 450,000 gallons of crude oil spilled in a southeast Texas port Saturday after two vessels collided, the U.S. Coast Guard said. No injuries have been reported, but part of the port has been closed.

U.S. Coast Guard Petty Officer Renee Aiello told The Association Press that the crude spilled at the Port of Port Arthur when a 600-foot tanker carrying oil collided with a towing vessel pushing a loaded barge. The Coast Guard was notified of the collision around 9:50 a.m., she said.

The crash left a 15-by-8-foot hole in the tanker, Aiello said low fee pay day loans. The towing vessel then ricocheted and hit another tanker that was tied to a pier. Aiello didn’t know what damage was caused to that ship.

Aiello said a portion of the oil in the damaged tank has been moved to another holding tank on the ship.

Port Arthur is about 90 miles east of Houston.

Oil spilled at east Texas port as ships collide

BERLIN — Military officials from the European countries with orders to buy the Airbus A400M military transport plane tried and failed again Friday to resolve differences over how to share billions of euros in cost overruns, but said they would resume negotiations this coming week in Berlin in the hope of meeting a Jan. 31 deadline.

Many of the participating countries need the aircraft urgently as they play a greater and more demanding role in peacekeeping missions. The repeated delays — the A400M is now more than four years behind schedule — represent a big setback for European military cooperation.

Military procurement ministers from the seven customer nations met until late into the night Thursday with top managers from Airbus and its parent company, European Aeronautic Defense & Space.

“We will meet again early next week here in Berlin,” a German defense ministry spokesman, who asked not to be identified, said Friday. “All of the participants do want a solution to this problem.” Two people with direct knowledge of the negotiations said they would likely take place Tuesday.

Alexander Reinhardt, a spokesman for EADS, said nailing down the critical details of how to finance the program remained a thorny issue.

“The negotiations have been difficult, as expected,” Mr. Reinhardt said.

Seven countries — Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey — together ordered 180 A400Ms in 2003 for €20 billion, or $28.2 billion. Last year, EADS and Airbus asked them to help cover an additional €5.2 billion in costs and to accept significant delivery delays. The company has asked the countries to agree to an additional 25 percent payment, or around €5 billion, according to people with direct knowledge of the negotiations.

The Airbus chief executive, Thomas O. Enders, warned this month that without an agreement soon, the project might have to be abandoned, placing as many as 40,000 European jobs at risk.

But while France said it would consider paying more, Germany has been more than reluctant. It has ordered 60 of the 180 aircraft, while France has ordered 50.

France was supposed to receive the first deliveries of the A400M transport aircraft late last year and Germany in 2010, but the plane made its first test flight only last month. Both countries will now have to wait several years more, according to the German Defense Ministry faxless cash advance.

Germany, however, has little room to maneuver. With 4,300 German troops based in northern Afghanistan, Berlin needs access to such aircraft for transporting not only troops but also such heavy equipment as tanks, armored personnel carriers and helicopters.

Without the A400M, it must either modernize at huge expense its Transall aircraft, which are more than 30 years old, or lease Russian Antonov aircraft.

“We want the A400M but not at any price,” the German defense minister, Karl-Theodor zu Guttenberg, reiterated during an interview with the Bayernkurier newspaper to be published Saturday. “Our willingness to compromise has its limits.”

Britain, too, is furious about the delays, especially given its big role in Afghanistan.

The German Defense Ministry official said that cost was not the only issue still on the table, but range and payload as well. The A400M is currently several tons over its specified weight.

An audit of the A400M program by PricewaterhouseCoopers, which was commissioned last year by the governments, has blamed a significant portion of the cost over-runs on EADS and Airbus for failing to put proper budget controls in place. It also said the manufacturer had consistently underestimated development costs.

The auditor’s report, which was leaked to several European media this past week, estimated that the A400M was roughly €7.6 billion over budget.

EADS and Airbus have rejected the findings of the audit, but have so far failed to provide their own cost estimate for the program, now four years behind schedule.

EADS has already written off €2.4 billion in costs for a project that continues to expend cash at a rate of around €100 million each month.

The seven countries failed to meet an year-end 2009 deadline to agree on a new delivery schedule and financing arrangement for the contract, and last month set a new deadline of Jan. 31.

With the financial crisis and recession straining budgets across Europe, the governments have been reluctant to come up with more money.

Nicola Clark reported from Paris.

Pressure Mounts for Deal for Airbus Military Plane

Hot News: Geithner voiced concern on US bank limits-sources

Crude oil followed the stock market up on Tuesday, settling higher for the first time in five sessions.

Investors boosted health stocks, watching a Massachusetts election to fill the seat of the late Sen. Edward M. Kennedy. Some hoped for a Republican victory that would make it more difficult for Senate Democrats to pass a health care bill. The Dow Jones Industrial Average was up nearly 100 points in afternoon trading.

Wholesale gasoline prices also moved higher after the MasterCard SpendingPulse report for the week ended Friday showed gasoline consumption rose 3.2 percent with the week before and 2.3 percent from the same week a year ago. Traders have been looking for signs that gasoline demand is starting to pick up to justify oil prices that have more than doubled in the past year.

SpendingPulse is a division of MasterCard Advisors that tracks total sales paid for by credit card, checks and cash.

But last week’s falling oil prices started to bring down prices at the gas pump. Gasoline prices fell for the fourth straight day, though the declines have been modest so far.

Prices of $2.74 per gallon Tuesday were less than 2 pennies under the 15-month peak of $2.7543 hit on Thursday, according to AAA, Wright Express and Oil Price Information Service.

Prices still are up 15 cents in the past month and 89.8 cents from a year ago, as motorists dig deeper into their wallets to pay for fuel just as Christmas bills start to come in payday loans with low fees.

Tuesday’s gasoline prices matched the Energy Information Administration survey that showed prices averaged $2.739 per gallon nationwide Monday, down 1.2 cents from the week before.

A typical motorist using about 50 gallons a month is paying about $140 for gasoline, $45 more a month than a year ago.

Gasoline prices have spiked in the past month on a jump in oil prices.

Analyst Tom Kloza said to look for larger declines in gasoline prices over the next few weeks. January and February are typically a period of poor demand for transportation fuels.

Benchmark crude for February delivery rose $1.02 to settle at $79.02 Tuesday on the New York Mercantile Exchange.

In other Nymex trading in February contracts, heating oil fell 0.06 cent to settle at $2.0454 a gallon, while gasoline added 1.37 cents to settle at $2.0591 a gallon. Natural gas futures shed 13.4 cents to settle at $5.557 per 1,000 cubic feet.

In London, Brent crude for March delivery rose 53 cents to settle at $77.63 a barrel on the ICE Futures exchange.

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Associates Press writers Pablo Gorondi in Budapest and Eileen Ng in Kuala Lumpur, Malaysia, contributed to this report.

Crude settles higher as stocks climb

LONDON – European and U.S. stock markets recovered some earlier losses Thursday, helped by a string of upbeat trading updates from U.S. retailers a day ahead of crucial jobs data.

In Europe, Germany’s DAX index closed down 14.97 points, or 0.3 percent, at 6,019.36 while France’s CAC-40 closed 7.13 points, or 0.2 percent, higher at 4,024.80. The FTSE 100 index of leading British shares ended 3.32 points, or 0.1 percent, lower at 5,526.72 — unmoved by the widely expected Bank of England decision to keep policy unchanged at its monthly meeting.

European stocks had been trading even lower for most of the day until Wall Street pared its losses. The Dow Jones industrial average was down 6.12 points, or 0.1 percent, at 10,567.56 around midday New York time while the broader Standard & Poor’s 500 index fell 0.53 point, or 0.1 percent, at 1,136.61.

Some support was provided by decent Christmas sales figures from U.S. retailers, such as Sears Holdings, Macy’s and JC Penney. The state of household spending in the U.S. is key for the global economic recovery as it accounts for around 70 percent of the country’s economy.

“A rebound on Wall Street shifted sentiment in the final hour of trade (in Europe) although attention is now going to start shifting to the U.S. nonfarm payrolls tomorrow,” said Philip Gillett, a sales trader at IG Index.

The U.S. economy remains at the forefront of investors’ attention, specifically Friday’s jobs data for December.

Many market participants reckon the figures could show jobs rising for the first time in two years, which would be a clear signal that the recovery from recession is on a sound footing.

The consensus in the markets at the moment is that around 10,000 jobs were shed during December.

The key driver to stock market performance, at least in the first part of the year, will likely be whether the economic figures, particularly out of the U.S., back up the optimism that is evident in company valuations following a near ten month bull run.

Stock markets around the world have rallied strongly since March’s lows — the Dow and the S&P 500 for example surged more than 60 percent since then — as investors grew more optimistic about the global economic recovery after central banks and governments pushed through extraordinary policy measures to mitigate the deepest recession since World War II.

Chinese stocks had led world markets lower for most of Thursday after the country’s central bank unexpectedly increased the interest rate on one of its treasury bills and indicated that it was looking to rein in bank lending allstate insurance company.

Shanghai’s main index slid 1.9 percent to close at 3,192.78 as monetary authorities pushed through further measures to prevent the Chinese economy from overheating.

Charles Dumas, an analyst at Lombard Street Research, said the People’s Bank of China’s decision to raise the interest rate on its three-month bills by 4 basis points to 1.36 percent would normally have gone unnoticed but that investors saw it as a hint that further tightening of monetary policy in the months ahead was likely in order to combat inflation.

“The PBoC’s comment that it would seek moderate loan growth this year means observers were clearly right to say that it was,” he said.

The Shanghai composite is now down 4.5 percent from its late-November peak, while other markets around the world have continued to post their highest levels in over a year.

What occurs in China is crucial for the world economy as it was strong economic growth there that helped limit the depth and breadth of the global recession.

Elsewhere in Asia, Tokyo’s Nikkei 225 stock average lost 49.79 points, or 0.5 percent, to 10,681.66 while Hong Kong’s Hang Seng fell 147.22 points, or 0.7 percent, to 22,269.451. South Korea’s Kospi lost 1.3 percent to 1,683.45.

Australia’s index lost 0.5 percent and Taiwan’s market was off 1.1 percent.

Oil prices recovered most of their earlier losses, with benchmark crude for February delivery down only 8 cents to $83.10 a barrel. On Wednesday, the contract rose $1.41 to settle at $83.18, a 15-month high.

The dollar strengthened by a further 0.9 percent to 93.16 yen after Japan’s new finance minister called for a weaker yen.

In unusually explicit remarks for a Japanese finance minister, Naoto Kan vowed to work closely with the central bank to steer the currency toward an “appropriate” level around 95 yen to the dollar.

Kan takes over from Hirohisa Fujii, whose health problems led the 77-year-old to resign Wednesday after just four months as the top finance official.

Meanwhile, the euro was down 0.7 percent on the day at $1.4315.

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AP Business Writer Jeremiah Marquez in Hong Kong contributed to this report.

US retailers give world stocks measure of support

Hot News: Earnings to test Wall Sts bet on recovery

TORONTO – The Canadian mortgage insurance business of American International Group Inc. will be sold to a private investor group headed Ontario Teachers’ Pension Plan, the groups said Tuesday.

Terms of the transaction were not disclosed.

AIG’s sale of the Canadian mortgage division is the latest business unit to be sold by the insurance giant, which has been selling assets and spinning off divisions in an effort to help repay a government bailout package received last year when it was on the brink of collapse.

AIG United Guaranty Mortgage Insurance Company Canada, based in Toronto, is a leading mortgage provider in Canada with assets of about $264 million.

Teachers’ Private Capital is the private investment department of the Ontario Teachers’ Pension Plan, the largest single-profession pension plan in Canada. It is an independent corporation responsible for investing the fund’s assets and administering the pensions of Ontario’s 284,000 active and retired teachers.

AIG, based in New York, was bailed out by the government last fall at the peak of the credit crisis free online credit report. As losses continued to pile up, the government eventually extended AIG an aid package worth more than $180 billion. The government also received a stake of almost 80 percent in AIG in return for the support.

Just last month AIG said it would slash the amount of money it owes the government by $25 billion when it gives the government preferred equity stakes in two of its life insurance companies, American International Assurance Co. and American Life Insurance Co.

The companies will be placed into special holding units as AIG decided whether to complete initial public offerings or sell them privately.

As of Sept. 30, AIG had tapped $122.31 billion of the aid package and owed the government $85.66 billion in loans. The separation of AIA and Alico would reduce the outstanding aid package to $97.31 billion and the amount owed in loans to $60.66 billion.

Shares of AIG fell 8 cents to $29.81 in morning trading.

AIG sells Canadian mortgage insurance unit

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Filed at 12:31 a.m. ET

HONG KONG (AP) — Most Asian markets started off 2010 with moderate gains Monday as investors weighed mixed signs from the region’s economies.

Japan’s stock benchmark rose 1 percent to lead the region, while crude oil prices touched $80 a barrel. The dollar slipped against the yen and rose against the euro.

Investors were encouraged by a report showing China’s manufacturing expanded at its fastest rate in 20 months last month, the latest sign the world’s third-largest economy was continuing to grow strongly, aided by government stimulus measures.

But the mood was offset by worries about another recession in Singapore after the government said the local economy shrank last quarter for the first time since early 2009.

In Japan, the Nikkei 225 stock average advanced 103.79 points, or 1 percent, to 10,649.81, with Japan Airlines surging more than 35 percent amid reports the Japanese government was readying additional financing to the troubled airline.

South Korea’s Kospi added 0 no faxing payday loans.5 percent to 1,691.48, Australia’s main index was up 0.2 percent and India’s benchmark gained 0.4 percent.

Other markets slipped, with Hong Kong’s Hang Seng off 0.3 percent at 21,809.36 and Shanghai’s index down 0.4 percent to 3,265.51. Singapore’s market dropped 0.2 percent.

Last week in the U.S., the Dow Jones industrial average closed out the year shedding 120.46, or 1.1 percent, to 10,428.05. For the year, the Dow rose 1,651.66, or 18.8 percent.

The broader Standard & Poor’s 500 index, considered to be the market’s best barometer, fell 11.32, or 1 percent, to 1,115.10. The S&P ended the year with a gain of 211.85, or 23.5 percent.

Oil prices rose in Asia, with benchmark crude for February delivery up 64 cents at $80.

The dollar fell to 92.75 yen from 93 yen, and the euro was lower at $1.4287 from $1.4323.

Asian Stock Markets Open 2010 With Modest Gains

WASHINGTON (Reuters) – A pension fund may ask the Supreme Court to let it sue BAE Systems Plc (BAES.L) in the United States over allegations that the company paid more than $2 billion in bribes to win a record Saudi arms deal, the fund's lead attorney said on Friday.

A U.S. appeals court ruled this week against the fund for employees of the city of Harper Woods, Michigan. The court said English law, not U.S. law, governed the shareholder lawsuit over alleged bribes to Saudi Prince Bandar bin Sultan and others.

The appeals court, which upheld a lower court's finding, left the fund to pursue its case in Britain.

Patrick Coughlin, the plaintiffs' lead attorney, said the fund had no plans to take its case to England.

Instead, he said it may appeal to the high court against the dismissal of the case on Tuesday by the U.S. Court of Appeals for the District of Columbia.

"Will consider" going to the Supreme Court, Coughlin, of Coughlin, Stoia, Geller, Rudman, Robbins LLP, said in a terse email reply to Reuters. "No current plans to litigate in England."

He did not respond to questions about why he did not plan to take the case to England. The original suit was brought in September 2007.

The pension fund has charged that current and former directors and executives of BAE, Britain's No. 1 arms maker, breached their fiduciary duties and wasted corporate assets by allegedly allowing illegal bribes and kickbacks in the 1980s arm deal known as al-Yamamah, or "the Dove."

BAE has denied that wrongful payments were made to secure the deal in which Tornado fighter jets, Hawker trainer aircraft and other military hardware were sold to Saudi Arabia in exchange for oil starting in 1985 payday advance. The value of the government-to-government barter has been estimated at up to $80 billion, Britain's costliest arms deal.

BAE welcomed the U.S. appeals court ruling, said Lindsay Walls, a company spokeswoman in London.

Lawyers for Bandar, a former ambassador to the United States, have denied any wrongdoing on his part.

The plaintiffs had argued the United States should have jurisdiction because more than $2 billion in alleged bribes went to Bandar through an account at Riggs Bank, a defunct Washington D.C. financial institution.

BAE defendants countered that nearly all of them reside outside the United States, and none in Washington D.C.

Britain's Serious Fraud Office in December 2006 dropped an inquiry into the al-Yamamah deal. Then-Prime Minister Tony Blair said pursuing the matter threatened national security and ties with Saudi Arabia, which he called crucial for counter-terrorism efforts and Middle East peace.

In June 2007, BAE said the U.S. Justice Department had opened its own investigation of BAE's compliance with anti-bribery laws, including dealings with Saudi Arabia. The department did not respond to a request for comment on its investigation.

(Reporting by Jim Wolf; Editing by David Gregorio)

BAE bribery suit may be taken to Supreme Court

WASHINGTON (Reuters) – The Obama administration is poised to announce loan guarantees to help kick-start the country's nuclear power industry, which hasn't built a new plant in more than three decades.

Congress authorized $18.5 billion for nuclear loan guarantees in 2005, hoping to revive development of the carbon-free source of energy. Investments in nuclear power has dried up on soaring costs following the 1979 accident at Three Mile Island.

But earlier this year, the U.S. Energy Department signaled it was keen to aid the industry and narrowed the list of those likely to receive loan guarantees to four: Southern Co, Constellation Energy, NRG Energy and SCANA Corp.

"When DOE issues their first loan guarantee, that's going to send an important signal to private-sector financing, and Wall Street in particular," said John Keeley, a spokesman for the Nuclear Energy Institute.

Southern, which wants to build two reactors at the Vogtle plant in Georgia, is expected to be awarded the first loan guarantee.

Energy Department officials would not give a specific date on when the details will be announced but said they were committed to restarting the nuclear industry.

"We are on track to announce the first loan guarantee soon," said Stephanie Mueller, a department spokeswoman.

The money allotted would probably support construction of about two to three plants cash advance payday loan. A nuclear power plant can cost $6 billion to $7 billion to build, according to industry estimates.

Even after receiving a guarantee, the companies would still have to complete the licensing process and secure private financing before construction begins.

Barring major delays, actual construction of a plant would not start before 2011, with the first new plant coming on line around 2017 or 2018, according to the nuclear institute.

The nuclear trade group has called for $100 billion in additional loan guarantees for low carbon energy sources to help support replacing aging reactors and to help reduce greenhouse gas emissions.

U.S. utilities that hope to build new reactors will have to overcome rising construction costs, uncertain cost recovery from customers and lower power demand caused by the recession.

Critics of nuclear power say the projects are too expensive and too risky to receive billions of taxpayer dollars. Environmentalists also raise concerns about the disposal of nuclear waste.

(Additional reporting by Eileen O'Grady in Houston and Tim Gardner in Washington; Editing by Christian Wiessner)

U.S. loans to boost nuclear industry seen soon

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