Business and Finance

World stock markets were mixed Monday as fears of a Greek debt default dampened the euphoria from a stronger-than-expected increase in U.S. jobs.

Benchmark oil fell to near $97 per barrel while the dollar rose against the euro and the yen.

European stocks fell in early trading as Greece’s coalition government was facing another day of tough negotiations with international lenders to reach a deal for Athens to receive a euro130 billion ($171 billion) emergency bailout.

The deal is vital for Greece to avoid bankruptcy as it cannot cover a euro14.5 billion ($19.1 billion) bond repayment due March 20.

Britain’s FTSE 100 slipped 0.3 percent to 5,883.86. Germany’s DAX fell 0.4 percent to 6,739.95 and France’s CAC-40 lost 0.8 percent to 3,399.17. Wall Street also was headed for a lower opening, with Dow Jones industrial futures down 0.3 percent to 12,751 and S&P 500 futures shedding 0.4 percent to 1,333.20.

Asian shares closed higher on the heels of a data released Friday that showed U.S. unemployment had fallen to its lowest in three years, suggesting a stronger recovery in the world’s No. 1 economy that could benefit the region’s exporters.

Japan’s Nikkei 225 index rose 1.1 percent to close at 8,929.20, its highest closing in more than three months. South Korea’s Kospi was marginally higher at 1,973.13.

Hong Kong’s Hang Seng lost 0.2 percent to 20,709.94, slipping into negative territory as investors began to cash in some of their investments as the talks in Greece dragged on.

“We hit 21,000 and now there is profit-taking, because there is still potential bad news from Greece,” said Jackson Wong, vice president at Tanrich Securities in Hong Kong. “The Greek debt talks are still going on, and no one knows if significant bad news will come out of there.”

Australia’s S&P ASX/200 added 1.1 percent to 4,296 while benchmarks in Singapore, mainland China and the Philippines also rose. Taiwan’s and Indonesia’s main indexes fell.

On Friday, the Dow Jones industrial average was propelled to its highest close since May 2008 after the U.S. Labor Department said the economy added 243,000 new jobs in January, the strongest job growth in nine months.

That helped to push the unemployment rate down to 8.3 percent and the number of unemployed down to 12.8 million.

Noting that a similar gain occurred in April 2010, only to be followed by a negative trend, analysts at DBS in Singapore said, “Stay optimistic but keep a few grains of salt close at hand.”

Falling unemployment in the U.S. is likely to be good news for Asia, as it suggests stronger consumer demand for the region’s exports of clothing, cars, consumer electronics and other goods.

Among Japanese shares, Panasonic Corp. soared 6.3 percent and Mazda Motor Corp. jumped 6.9 percent. Camera maker Nikon Corp. shot up 11.2 percent after revising upward its net pretax profit for the current business year, Kyodo News reported.

Chinese shipping companies, which also stand to benefit from increasing exports, also rose. Hong Kong-listed China Shipping Container Lines rose 5.1 percent. China COSCO Holdings gained 4.9 percent.

Benchmark oil for March delivery was down 66 cents to $97.19 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.48 to finish at $97.84 per barrel on the Nymex on Friday.

In currencies, the euro fell to $1.3059 from $1.3153 late Friday in New York. The dollar rose to 76.66 yen from 76.55 yen.

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Members of the European Parliament involved in drawing up a new treaty designed to stop countries that use the euro from overspending on Wednesday slammed the latest draft.

The three MEPs, all from different parties, warned that that the latest version of the accord “is not compatible with existing EU Treaties.”

Eurozone leaders decided to draw up a new accord, which sets up tighter limits on budget deficits and is supposed to pull the 17 countries that use the euro closer together, at a summit in December in the hope that it would help the currency union pull out of its worsening debt crisis.

They were forced to resort to a separate accord after the U.K. blocked changes to existing EU treaties. All nine other EU countries that do not use the euro have supported the new accord in principle.

But the European Parliament in particular is concerned that the separate treaty sets up parallel structures within the EU, disempowering elected lawmakers and the European Commission.

“The draft does not guarantee that any decision to implement the new agreement would be taken via the normal procedures laid down in the EU treaties to ensure proper democratic scrutiny and accountability,” Elmar Brok, a member of the center-right European People’s Party; Roberto Gualtieri from the Socialist party, and Guy Verhofstadt, a liberal, said in a joint statement.

Their warning underlines a trend that has become more and more pronounced as the eurozone’s debt crisis has intensified over the past two years: important decisions are made by heads of state and government at EU summits _ often dominated by the leaders of France and Germany _ and then presented as a take-it-or-leave-it deal to national parliaments fast cash advance loan.

The parliamentarians are concerned that most of the amendments they made to the previous draft _ stressing the role of the Parliament and the Commission _ were not taken up in the latest version. A roadmap toward eurobonds, debt instruments backed by the eurozone as a whole, also did not make it into the draft.

There were few major changes to the new rules established in the accord. One point of contention is the number of countries that have to ratify the new treaty before it comes into force.

The first draft, circulated before Christmas, stipulated that only eight countries had to ratify the treaty to bring it into existence. A second draft increased that number to 15, while the latest version takes it back down to 12.

Even though the treaty would only apply to the countries that have ratified it, a lower threshold for bringing it into force makes it easier for countries to set up new structures.

However, a spokesman for Verhofstadt stressed that this section was not a “make-or-break” issue.

The next round of negotiations will take place on Thursday morning and the Parliament will adopt its official position on the new accord next week.

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Leaders from across Latin America and the Caribbean pledged closer ties to safeguard their economies from the world financial crisis as they formed a new bloc on Saturday including every nation in the hemisphere except the U.S. and Canada.

Several presidents stressed during the two-day summit that they hope to ride out turbulent times by boosting local industries and increasing trade within the region.

“It seems it’s a terminal, structural crisis of capitalism,” Bolivian President Evo Morales said in a speech Saturday. “I feel we’re meeting at a good moment to debate … the great unity of the countries of America, without the United States.”

Venezuelan President Hugo Chavez and some of his closest allies called the new regional bloc a tool for opposing U.S. influence. But other leaders focused more on economic concerns and on working together to confront issues such as drug trafficking and the effects of climate change.

Brazilian President Dilma Rousseff said that if the nations are to keep thriving they will need to look more to their neighbors.

“The economic, financial crisis should be at the center of our concerns,” Rousseff said Friday night. She said Latin America should “realize that to guarantee its current cycle of development despite the international economic turbulence, it means that every politician must be aware that each one needs the others.”

The region has so far weathered the economic woes better than the U.S. or Europe, achieving economic growth of more than 5 percent last year.

Colombian President Juan Manuel Santos said the region has immense potential “in this world that’s going through great uncertainty, where there’s a hurricane that’s hitting the so-called industrialized economies hard.” He said Colombia’s current trade with Brazil, for instance, is minimal and could grow significantly.

Chavez read aloud a letter from Chinese President Hu Jintao congratulating the leaders on forming a new 33-nation regional bloc, the Community of Latin American and Caribbean States. Hu pledged to deepen cooperation with the new group.

The U.S. remains the top trading partner of many countries in the region, with exceptions including Brazil and Chile, where China has become the biggest trading partner. China has also made diplomatic inroads, including by granting about $38 billion in loans to Venezuela in exchange for increasing shipments of oil.

Chilean President Sebastian Pinera touted the region’s opportunities for growth, while Argentine President Cristina Fernandez said building trade among the countries should be a priority.

Bolivia’s Morales took a different focus, strongly criticizing the International Monetary Fund and saying “they’ve just pillaged us and led us to poverty.”

Morales also appealed for strong steps at this month’s climate change conference in South Africa, saying it’s critical that developed nations renew pledges to cut greenhouse gas emissions under the 1997 Kyoto Protocol.

“If they kill the protocol, they kill the planet,” Morales said.

Trinidad and Tobago’s prime minister, Kamla Persad-Bissessar, also expressed concerns about changing weather patterns and said nations should work together to better plan for disasters.

Several leaders called for closer cooperation to fight criminals and drug trafficking.

“Our region is seriously threatened by organized crime,” Guatemalan President Alvaro Colom said.

Colombia’s Santos said the new bloc could help in re-examining whether current counter-drug efforts are the right approach.

Caribbean leaders including Haitian President Michel Martelly thanked Chavez for selling their nations oil on preferential terms, including long-term, low interest loans.

“The people of Haiti love you with all their hearts,” Martelly told Chavez during his speech, saying “south-south cooperation” is key to the future of his impoverished country.

Chavez assured leaders he will survive cancer, reiterating that he underwent recent tests in Cuba after finishing chemotherapy and they found no “malignant cells in any part of my body, thanks to God.”

Trinidad’s prime minister gave Chavez a vial of what she described as holy water, and Chavez thanked her, saying “soon we will have a summit of those of us who’ve beaten cancer.”

Venezuela’s government celebrated the gathering at a Caracas military base with bursts of fireworks that could be heard from the session. Other events included an orchestral performance led by Venezuelan conductor Gustavo Dudamel and a post-summit concert headlined by Puerto Rican hip-hop duo Calle 13.

The leaders planned to formally launch the new bloc known by its Spanish initials CELAC on Saturday by approving the group’s procedural rules as well as a clause dealing with democratic norms and a declaration of shared principles.

Both Chavez and Ecuadorean President Rafael Correa said they hope the bloc eventually overshadows the importance of the Washington-based Organization of American States. Unlike the OAS, the new group will have Cuba as a full member and exclude the U.S. and Canada.

“We need a new inter-American system and, more specifically, a new system to guarantee human rights,” Correa said Friday, referring to the Washington-based Inter-American Commission on Human Rights, which has received complaints from Ecuadorean newspapers and television channels that accuse his government of trying to silence critics.

“All these attacks and threats are made in the name of freedom of expression,” Correa added, accusing powerful media outlets of manipulating public opinion.

Several other presidents said they see CELAC as an important forum to resolve conflicts and build closer ties, but not as an alternative to existing bodies such as the OAS.

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Libya’s transitional leaders have vowed to work with the International Criminal Court and with the United Nations in investigating alleged crimes committed by Moammar Gadhafi’s recently captured son and one-time heir apparent, the court’s prosecutor said Thursday.

ICC prosecutor Luis Moreno-Ocampo told The Associated Press that the court received the formal pledge in a letter from National Transitional Council chairman Mustafa Abdul-Jalil. He gave the AP a copy of the letter in an English translation.

Moreno-Ocampo said he was satisfied with that move, which appears to settle a dispute between the international court and Libyan authorities over which body should try Seif al-Islam Gadhafi with crimes against humanity.

Libya is obliged by a UN Security Council resolution to work with the ICC, but that does not necessarily preclude a trial in Libya. If the court determines that the country has a functioning legal system that will give Seif al-Islam a fair trial on substantially the same charges as were filed before it, it can leave the case with Libya.

Moreno-Ocampo said the most important thing is for Seif al-Islam, whom he called the “face of the old regime,” to face justice.

It “is very important for the world and for Libya to understand what happened here, how they attacked these people, how they killed these people,” Moreno-Ocampo said.

The ICC has charged both Seif al-Islam and the Gadhafi-era intelligence chief Abdullah al-Senoussi with crimes against humanity for unleashing the brutal crackdown on an uprising that began in February and spiraled into a civil war.

Moreno-Ocampo said he understood that it’s “a matter of national pride” for Libya’s leaders to try Gadhafi’s son themselves because they want to prove to the world that they are capable of holding a fair trial payday lenders.

He said investigations are under way into the alleged crimes committed by Gadhafi’s son and that he believed it would be ready for trial “in a few months.”

In his letter to the court, Libya’s Abdul-Jalil pledged to “fully cooperate” with the ICC and the UN Security Council.

But he asserts that the Libyan judiciary has “primary responsibility” to try Seif al-Islam, the only Gadhafi family member in Libyan custody.

The letter is addressed to a presiding judge at the court in The Hague, Sanji Mmasenono Monageng.

Seif al-Islam is being held by fighters from the Libyan town of Zintan, who flew him there after his capture in southern Libya on Saturday. The International Committee of the Red Cross visited Seif al-Islam there on Tuesday and said he appeared to be in good health.

Officials with the governing National Transitional Council also had reported that former intelligence chief al-Senoussi, who also is wanted by France over the 1989 bombing of French airliner, was captured over the weekend in the southern city of Sabha and was being held in a secret location.

However, senior Libyan officials have cast doubt on the claim.

Moreno-Ocampo said Libyan authorities told him they could not confirm that al-Senoussi was really arrested.

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Financial markets pounded Italy on Wednesday as investors hoped that Premier Silvio Berlusconi would not linger in office and delay reforms. Italy’s president responded by declaring there was no doubt that Berlusconi would leave soon, appearing to soothe investors.

In another chaotic day driven by the European debt crisis, the Dow Jones industrial average dropped nearly 240 points in New York morning trading after Italy’s borrowing costs soared to a new record high. Traders were troubled by signs that Europe’s unending debt crisis was enveloping Italy _ the eurozone’s third-largest economy, a nation too big for Europe to bail out.

And across the Ionian Sea, Greek lawmakers labored for a third day but finally came up with a deal to create an interim government to pass the country’s new debt deal. Outgoing Greek Prime Minister George Papandreou, who was expected to formally resign with hours, wished the next prime minister well but gave no indication of who it would be.

Berlusconi has pledged to resign after the Italian parliament passes the financial reforms that European officials have been demanding for months. The process can take up to two weeks, but President Giorgio Napolitano said that would be accelerated to days, allowing him to quickly begin talks on forming a new government or calling new elections.

“Fears are totally unfounded that Italy may experience a long period of inactivity,” Napolitano said, adding that “emergency measures” could be adopted at any time.

Italy’s key borrowing rate spiked to a high of 7.40 percent on Wednesday, up 0.82 percentage points from the previous day, as markets expressed concern about how swift and complete Italy’s political transition would be. That’s over the level that eventually forced other eurozone countries like Greece and Portugal to seek bailouts.

They settled down to 7.26 percent after Napolitano’s remarks.

“Berlusconi is the supreme political maneuverer. And no one will believe he has resigned until, yes, he has done so. Simple as that,” said Jan Randolph, head of sovereign risk analysis at IHS Global Insight.

No one is suggesting that Italy is headed for an immediate bailout. Randolph said it will take a while for the higher borrowing rate to cause problems for Italy’s “mountain of debt.”

“With a catastrophic scenario _ and it seems we are facing now a catastrophic scenario _ maybe Berlusconi can be pushed to support a new government. Or maybe his party will crumble,” said Roberto D’Alimonte, a political analyst at Rome’s LUISS University.

Noted economist Nouriel Roubini, who has lived in Italy, expressed a similar view on Twitter: “Yields at 7%: markets are telling Berlusconi to leave NOW. They don’t buy his scheme of pretending to leave in 2 weeks after budget is passed.”

D’Alimonte said investors are hoping for a technocratic government, led by former EU competition commissioner Mario Monti, who now runs the prestigious Bocconi University. Berlusconi and his allies claim such a solution would be undemocratic, however, because the conservatives won the last election.

With debts of around euro1.9 trillion ($2.6 trillion), Italy is considered too big for Europe to bail out. Higher borrowing rates will make it more difficult and expensive for Italy to roll over its debts. It has over euro300 billion ($412 billion) to raise in 2012 alone.

The European Central Bank has been buying up Italian bonds to keep yields at reasonable rates _ but Randolph said that is just throwing good money after bad.

“You can bring yields down, but they can’t keep them down unless the borrowing government takes concrete steps to improve creditworthiness,” Randolph said. “Seven percent is not sustainable over several years.”

Italy needs to pass the additional austerity measures and structural reforms pledged by Berlusconi to world leaders at an economic summit last week.

Any delays in the financial reforms or in establishing a new, stable Italian government spook the markets, which are already unnerved since some investors in Greece are going to lose 50 percent of their holdings. Investors fear a so-called “haircut” could also affect those owning Italian bonds if Italy doesn’t get its act together.

“Markets attack weak animals like lions,” said political analyst Franco Pavoncello, president of Rome’s John Cabot University. “Italy is perceived as being extremely weak politically, which is too bad because economically it is not too weak.”

In the meantime, Berlusconi is not yet out _ and there is considerable uncertainty of what kind of government will follow.

While Berlusconi is not running for office again, he told the La Stampa daily he would remain active as the founder of his political party and would help out in any political campaigns.

Berlusconi wants new elections soon with his hand-picked successor, former justice minister Angelino Alfano, as a candidate. The 75-year-old leader tapped Alfano to head his People of Liberties Party a few months ago. At 41, Alfano represents a new generation of center-right politicians after 17 years of Berlusconi leadership.

But D’Alimonte said Berlusconi would still be pulling the strings.

“He will be the major protagonist of the next election. He will push Mr. Alfano as the candidate, but he will direct the orchestra. Alfano will be the first violin,” D’Alimonte said.

The rising bond yields underline the quandary European officials find themselves in as they try to come up with an effective backstop for indebted countries, one with enough financial muscle to support the eurozone’s No. 3 economy. European governments decided last month to increase the effective power of their euro440 billion ($600 billion) rescue fund, the European Financial Stability Facility, which is considered too small to bail out Italy.

European finance ministers are still working on the complex details of how to increase the fund’s effective lending power to over euro1 trillion ($1.36 trillion) by having it partially insure government debt or by attracting outside investors. There are doubts among outside economists about whether either method will work.

The European Central Bank thus remains the only available outside firewall available against Italy’s rising yields. It has been buying government bonds in the secondary market, which drives down borrowing costs for Italy.

But the bank has warned the program is only temporary. New ECB president Mario Draghi _ himself an Italian _ said last week it was “pointless” for European governments to expect outside help to drive down interest rates and the only solution was for them to reform their own finances.

Some analysts have speculated the ECB may be deliberately limiting its bond purchases to keep the pressure on Italy’s reluctant government to push ahead with economic reforms

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WASHINGTON

World stock markets rose Friday, putting aside concerns that European leaders might not come up with a comprehensive plan to deal with the region’s chronic debt crisis in time for a weekend summit.

Oil prices hovered above $86 per barrel and the dollar was higher against the euro but dipped against the yen.

European shares were higher in early trading. Britain’s FTSE 100 rose 0.5 percent to 5,411.82. Germany’s DAX was 0.6 percent higher at 5,802.16 and France’s CAC-40 added 1 percent to 3,115.71. Wall Street was set to open higher, with Dow Jones industrial futures up 0.1 percent at 11,482 and S&P 500 futures 0.1 percent higher at 1,211.50.

Asian gains were muted after a sluggish start of the trading day.

Japan’s Nikkei 225 index closed little changed at 8,678.89. Hong Kong’s Hang Seng added 0.2 percent to 18,025.72. South Korea’s Kospi gained 1.8 percent to 1,838.38 and benchmarks in Singapore and Taiwan also rose.

Thailand’s SET index was up 0.5 percent to 914.08, clawing back some of Thursday’s losses even as the country’s capital Bangkok braced for the possibility that floodwaters will defeat a network of barriers and inundate the city.

Mainland Chinese shares lost ground, with the benchmark Shanghai Composite Index falling 0.6 percent to 2,317.28, its lowest close in 31 months. The Shenzhen Composite Index lost 1.6 percent to 959.12. Shares in financials led gains while shares in glass and nonferrous metals weakened.

Worries that Europe’s troubles could get worse have kept markets on edge for weeks, and analysts said the volatility could continue for the near future.

“What you see now is one day of gains and one day of losses,” said Tom Kaan of Louis Capital Markets in Hong Kong. “With what has been happening in the world, there is still no confidence and I think this will continue to the end of the year.”

The Greek government is widely expected to go through some kind of default or restructuring of its debt, which could deliver a severe blow to an already weak European economy.

Signs of a modest economic uptick in the U.S. helped boost shares of Japanese exporters that count on American consumers for sales. Yamaha Motor Corp. rose 2.7 percent and Panasonic Corp. was 1.6 percent higher.

Heavy equipment shares also rose. Japan’s Hitachi Construction Machinery Co. gained 1.2 percent and South Korea’s Hyundai Heavy Industries Co. added 2.2 percent.

But shares of Japanese automotive giants Honda Motor Corp. and Toyoto Motor Corp. slipped after severe flooding forced a halt to their assembly lines in Thailand. Honda fell 0.4 percent and Toyota, 0.2 percent.

Samsung Electronics Co. rose 1.4 percent after the company announced it had surpassed Apple Inc. in smartphone sales in the July-September quarter. Yonhap news agency cited Shin Jong-kyun, president of Samsung’s mobile division, as estimating that the company had shipped more than 20 million smartphones in the third quarter.

Wall Street trading was choppy as talks in Europe appeared to falter because of differences between Germany and France over how to protect European banks from the consequences of a default.

A messy default by Greece could lead to deep losses for European banks that hold Greek debt. If that causes them to pull back on lending to each other, it could cause another freeze in global credit markets like the one in late 2008 after Lehman Brothers collapsed.

Wall Street rose slightly Thursday on news that a second summit meeting would take place next week after it became clear that France and Germany would not be able to bridge their difference in time for Sunday’s meeting.

The Dow Jones industrial average ended up 0.3 percent to close at 11,541.78. The Standard & Poor’s 500 index rose 0.5 percent to 1,215.39. The Nasdaq composite lost 0.2 percent to 2,598.62.

But analysts cautioned investors to rein in expectations of a solution to Europe’s debt crisis.

“Whether this Sunday’s EU Summit can live up to investor expectations remains to be seen … the precedent set by previous summits already bodes ill for detailing of any new policy initiatives,” Credit Agricole CIB wrote in a research note.

Sunday’s summit was supposed to deliver a comprehensive plan to finally get a grip on the currency union’s debt troubles. But French President Nicolas Sarkozy and German Chancellor Angela Merkel said Thursday they needed more time after it became clear that the two countries disagreed on some key points of the plan.

Benchmark crude for December delivery was up 16 cents at $86.23 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 22 cents to settle at $86.07 in New York on Thursday.

In currencies, the euro fell to $1.3721 from $1.3777 late Thursday in New York. The dollar fell to 76.70 yen from 76.85 yen.

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Venezuelan President Hugo Chavez announced Thursday that his government will expropriate homes on the Caribbean resort islands of Los Roques, saying the structures were built on plots bought in shadowy business deals.

Chavez has nationalized hundreds of privately owned companies since taking office in 1999, but this is the first time he has targeted private homes for expropriation.

Chavez offered no details regarding the planned seizures of private homes and quaint inns, known in Spanish as “posadas.”

“There are some houses that were illegally built. We’re going to take them over,” he said on television from the presidential palace.

The president said the government would build state-run inns on Los Roques, which is an archipelago of tiny islands offering snorkeling and scuba diving along numerous coral reefs and deserted white-sand beaches.

Lying 95 miles (150 kilometers) off the mainland, Los Roques is immensely popularly with foreign tourists seeking natural beauty and tranquility.

The archipelago is a paradise for nature lovers cheap business cards. More than 280 fish species, including rainbow-colored parrot fish and yellow striped angel fish, dance around divers in the crystalline waters. Brown boobies and scarlet ibises are among the dozens of bird species found on the islands.

Chavez’s government has nationalized hundreds of businesses including cement makers, retail stores and steel mills as part of his drive to establish a socialist economic model in Venezuela. Authorities have also seized large swaths of agricultural land deemed idle by officials, turning parcels over to poor peasants.

Chavez spoke before meeting with Russia’s Deputy Prime Minister Igor Sechin at the presidential palace. They discussed military cooperation and bilateral projects, including the creation of a $4 billion joint development bank that would be used to finance construction of housing and a natural gas pipeline in Venezuela.

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