The crash of a Toyota Prius in New York caught the attention of federal regulators Wednesday after the driver said it accelerated on its own, then lurched down a driveway, across a road and into a stone wall.

The Department of Transportation is looking into the New York crash, spokeswoman Olivia Alair said Wednesday.

Capt. Anthony Marraccini of the police department in Harrison, north of New York City, said a Toyota official asked to collect the Prius involved in the crash but that the police are "not prepared to release it just yet." He said he wanted to see first if a federal agency wants to join or take over the investigation.

When police release the Prius, Toyota will evaluate it to determine the cause of the accident, company spokesman Brian Lyons said.

The 2005 model was taken to a police parking lot. Its front end was severely pushed in, the hood was buckled and the front bumper and one front headlight were broken.

Police believe the vehicle was on Toyota’s recall list for the sticky accelerator problem, but they had no immediate proof that this one had the problem, Marraccini said free credit report and score. The vehicle had been serviced by Toyota for the floor mat problem, he said.

The driver, a 56-year-old housekeeper, was going forward in the car on Tuesday, down a curving driveway several hundred feet long, when the accident happened, he said.

He said police did not yet know how fast the car was going.

The captain said police would consider the possibility that the driver, who was not identified, was at fault. But he added, "There’s nothing at this particular time that would indicate driver error."

The air bags deployed when the car hit the stone wall across the street. Broken glass, plastic headlight pieces and metal that looked like part of a window frame were nearby.

On Monday, California police stopped a runaway 2008 Prius going nearly 95 mph after the driver said the pedal jammed. Toyota and the National Highway Traffic Safety Administration are investigating.

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The European Central Bank left its benchmark interest rate at a record low as policy makers weigh the risks of withdrawing emergency lending measures amid Greece’s fiscal crisis.

The Frankfurt-based ECB kept its key rate at 1 percent, as predicted by all 52 economists in a Bloomberg News survey. President Jean-Claude Trichet has promised to give details on the next step in the ECB’s exit strategy when he holds a press conference at 2:30 p.m. today.

Greece’s soaring budget gap has roiled financial markets and sent bond yields surging in Spain and Portugal, whose deficits have also swelled in the wake of Europe’s worst recession since World War II. The crisis is undermining confidence in the euro area’s economic recovery and complicating the ECB’s plans to scale back the liquidity measures it introduced to nurse the region through the slump.

Trichet must avoid any hint that the ECB will prematurely end its unlimited cash support for euro-area banks, said Colin Ellis, an economist at Daiwa Capital Markets in London. “It could spook markets, push up interest rates and make it more difficult for countries like Greece to finance its debt.”

Greece, which must replenish 20 billion euros of borrowing in April and May, today began selling 10-year bonds.

‘Addicted’

The euro stayed lower against the dollar after the announcement and was down 0.2 percent to $1.3674 as of 1:47 p.m. in Frankfurt.

The Bank of England today left its benchmark rate at a record low of 0.5 percent and kept the target for its bond- purchase program at 200 billion pounds ($302 billion).

The cornerstone of the ECB’s program has been to provide banks with unlimited funding at its key rate in the hope they will lend it on to households and companies. The ECB has already said it will stop giving banks 12 and six-month loans to ensure they don’t become “addicted” to the cheap cash.

Officials will today decide whether to extend the policy of unlimited allotment in its remaining seven-day, one-month and three-month refinancing operations beyond the current guarantee of April 13. Before the global financial crisis, banks were required to bid for funds in auctions.

“Trichet will be very keen to show that the ECB will not have its exit strategy held hostage by the Greek situation,” said Laurent Bilke, a former ECB forecaster who now works for Nomura International Plc in London free credit score. “They always said they would announce the next steps of the exit this month, and they will.”

Demonstrations

The Greek government has announced a series of spending cuts to convince investors it can reduce its budget gap, plans that have prompted protests and strikes. Demonstrators today took over the Finance Ministry building in central Athens and blocked streets in the city.

As well as Greece, ECB policy makers have to take into account the sluggish economic recovery. The central bank in December forecast growth of 0.8 percent this year after a 4.1 percent contraction in 2009. Trichet will present new forecasts today.

“The recovery feels more vulnerable than it did in December, when the ECB initiated the exit,” said Mark Wall, an economist at Deutsche Bank AG in Frankfurt.

Inflation Muted

Euro-area growth almost ground to a halt in the fourth quarter, the European Union confirmed today. Unemployment held at the highest level in more than 11 years in January and economic confidence unexpectedly weakened in February. The European Commission last month said the economy may fail to gather strength for most of 2010.

The cooling recovery is keeping a lid on prices, reducing the need for the ECB to tighten policy any time soon. Inflation eased to 0.9 percent last month from 1 percent in January. That compares with the ECB’s aim to keep inflation just below 2 percent.

Goldman Sachs Group Inc. this week pushed its forecast for the first ECB rate increase into 2011 from the fourth quarter of this year, and said the bank will exit non-standard measures more slowly than previously anticipated.

“The tensions surrounding Greece and the banks in general are likely to inject some concern that a too-fast exit could be dangerous,” Goldman’s chief European economist Erik Nielsen said in a note to investors. “We now believe that they’ll aim for a somewhat more gradual path than the one we have been forecasting for some time.”

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Bank of America spent $4.4 billion last year on its Wall Street bankers , according to a person familiar with the matter.

The nation’s largest bank used 19% of the $23 billion in revenues it generated in 2009 within its markets and investment banking businesses to pay workers’ salaries benefits as well as year-end bonuses.

That works out to an average of about $440,000 per employee. The bank has roughly 10,000 workers in its markets and investment banking units.

Bob Stickler, a spokesman for Bank of America (BAC, Fortune 500), would not confirm the figures, although he said that the company tried to walk a fine line when it structured worker pay this year.

"We are trying to balance the need to pay competitively and to respond to concerns about the level of compensation on Wall Street," said Stickler.

Faced with a public backlash over outsized bonuses, many of the nation’s largest financial firms have incrementally lowered pay levels for traders and investment bankers.

Many institutions have offered workers less cash and more stock, in an effort to tie workers’ performance with the firm’s fortunes and the interest of shareholders.

The use of so-called "clawback" provisions, which would reclaim pay from workers whose actions may damage the firm’s long-term financial health, have also gained momentum recently.

The issue of compensation has haunted Bank of America for much of the past year after it was revealed that the firm paid $3.6 billion in year-end bonuses to Merrill Lynch workers for fiscal year 2008. The firm is currently facing two legal actions by the Securities and Exchange Commission over the matter.

Compared to some of its peers, the amount Bank of America spent on its Wall Street employees appeared to fall in the middle of the pack.

Last month, JPMorgan Chase (JPM, Fortune 500) said it spent $9.33 billion to compensate workers in its investment banking division. Divided among the nearly 25,000 individuals in this business, the average annual compensation per employee was nearly $380,000.

Goldman Sachs (GS, Fortune 500) also revealed during the latest earnings season it spent approximately $498,461 a person, if its compensation pool were divided evenly among the firm’s 32,500 employees. 

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Manufacturing expanded in January at the fastest pace since August 2004, indicating production gains that are spearheading the U.S. recovery may soon encourage companies to hire.

The Institute for Supply Management’s factory index rose to 58.4, exceeding the highest estimate in a Bloomberg News survey of economists, from December’s 54.9, figures from the Tempe, Arizona-based group showed. Readings greater than 50 signal expansion. A measure of factory employment rose to the highest level in almost four years.

“Manufacturing is growing, it’s going to continue to expand,” said Hugh Johnson, who manages more than $1.6 billion as chairman of Albany, New York-based Johnson Illington. His forecast of 58 was the highest in the Bloomberg survey. “Whether or not this continues to unfold will depend very heavily on final demand.”

Stocks rose after the report showed increased production may be laying the groundwork for the spending gains necessary for the expansion to be sustained. The strength in U.S. manufacturing is being accompanied by factory expansion from China to Europe, separate data also showed.

Another report today showed personal spending rose 0.2 percent in December, the third straight gain, according to the Commerce Department in Washington.

Incomes climbed 0.4 percent, exceeding expectations and propelled in part by government payments, the report said. Wages and salaries rose 0.1 percent after a 0.4 percent gain in November, showing job growth is needed to help drive consumer spending in coming months.

Employment Forecast

Employers last month may have added jobs for the second time in the last two years, according to the median estimate of economists surveyed by Bloomberg News. The Labor Department will report the figures on Feb. 5.

President Barack Obama’s $3.8 trillion fiscal 2011 budget, released today, puts an emphasis on job creation with $100 billion in additional stimulus spending, along with higher taxes for the wealthy in an attempt to narrow the deficit.

The factory index exceeded economists’ median forecast of 55.5, according to 67 projections in a Bloomberg survey. Estimates ranged from 53.5 to 58. Manufacturing accounts for about 12 percent of the economy.

The Standard & Poor’s 500 Index gained 0.9 percent to 1,082.96 at 12:12 p.m. in New York. The yield on the 10-year Treasury note rose basis points to 3.65 percent, according to BGCantor Market Data. A basis point is 0.01 percentage point.

European Manufacturing

The pace of global manufacturing is picking up in response to faster economic growth.

A manufacturing gauge for China climbed to a record in January as exports jumped, according to figures from HSBC Holdings Plc and Markit Economics. Growth in the 16-nation euro region’s manufacturing industry accelerated more than estimated in January, according to a separate report from London-based Markit Economics.

The U.S. ISM’s production index rose to 66.2 from 59.7 and the new orders index increased to 65.9, the highest since December 2004, from 64.8.

Manufacturers such as General Electric Co. are beginning to hire and factories are stepping up production after a record reduction in inventories in 2009. The employment index rose to 53.3 in January, the highest since April 2006, from 50.2 a month earlier.

“Manufacturers are now willing to hire,” Norbert Ore, chairman of the ISM survey, said in a conference call from Atlanta. “The more I look at the data, the more this looks like a typical recovery, that is, that we see very strong growth in the front end of it.”

Unfilled Orders

The report also showed more manufacturers reported increased exports and more said they were paying higher prices for raw materials. It took longer for customers to receive their goods, a sign of stronger demand, while orders waiting to be filled also increased. Inventories were being drawn down at a slower pace.

Factories benefited from increased orders after companies pared inventories last year by a record $125 billion.

Corporate spending on new equipment is also beginning to pick up. Texas Instruments Inc., the second-largest U.S. chipmaker, said it will spend almost $1 billion this year to expand three factories and open a fourth to fill orders.

Federal Reserve officials, who left the benchmark lending rate unchanged in a range between zero and 0.25 percent on Jan. 27, noted in their policy statement that “business spending on equipment and software appears to be picking up.”

GE Hiring

GE, whose power-plant equipment generates one-third of the world’s electricity, is hiring workers in energy, health care and rail transportation. It’s bidding to supply new passenger locomotives for Amtrak and in November announced a joint venture in China that would make high-speed rail locomotives that may add 200 U.S. jobs.

“We will create jobs in the United States that could not have been created any other way,” John Rice, chief executive officer of GE Technology Infrastructure, said of the rail programs in a Jan. 28 Bloomberg Television interview.

Construction spending declined in December more than anticipated, capping the worst year on record for the industry, separate Commerce Department figures showed. Outlays dropped 1.2 percent last month as homebuilding and commercial construction dropped.

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Japan’s housing starts fell to the lowest level since the nation celebrated its postwar recovery by hosting the Olympics in 1964, as builders were hobbled by dwindling household incomes and sustained deflation.

Construction companies broke ground on 788,410 homes last year, 27.9 percent fewer than in 2008, the Land Ministry said today in Tokyo. That was the lowest since 751,429 recorded in 1964. The pace of decrease eased in the past four months.

The report highlights a decline that’s likely to see Japan lose its place as the world’s second-largest economy to China this year. Government programs to stimulate the property market have been unable to reverse expectations that home prices will fall, keeping households away from investing in real estate.

“It’s been a very miserable year,” Richard Jerram, chief economist at Macquarie Securities Ltd. in Tokyo, said before the report was published. “There certainly is an improvement underway, but it’s been slow to materialize, and it’s starting from very low levels.”

Falling wages and mounting job losses sapped demand for new homes last year, sending apartment builder Anabuki Construction Inc. into bankruptcy in November.

Housing starts fell 15.7 percent in December from a year earlier, the slowest pace in a year, today’s report showed.

Other figures today signaled that the economy continues to recover from its worst postwar recession.

Deflation Continues

Industrial production rose for a 10th month in December, households increased spending and the unemployment rate fell to 5.1 percent. At the same time, consumer prices slid for a 10th month and minutes of Bank of Japan meetings showed officials were concerned that deflation and a rising yen would hamper the recovery.

Japan has been blighted by price declines and sluggish economic growth since an asset bubble burst two decades ago. An index of residential land prices has slid more than 40 percent from its 1991 peak, Japan Real Estate Institute data show.

Respondents in a Bank of Japan survey released this month said they expect property values to slump for a seventh quarter. The central bank’s index of household expectations for future land prices dropped, reversing two quarters of improvements.

The average price of condominiums fell 5 percent last year in the metropolitan area of Tokyo, Kanagawa, Saitama and Chiba, according to the Real Estate Economic Institute. Nationwide residential land prices slid 3.2 percent in 2009 after rising for the previous two years, Land Ministry data show.

Sharing Rooms

“More people are asking for discounts, or are looking to share rooms with others,” said Wataru Ichinari, president of Tokyo-based Ichinari Real Estate. “We’re not going to see a full-fledged recovery in the housing market” for at least a couple of years, he said.

Policy makers are trying to revive the market. Former Prime Minister Taro Aso’s administration expanded and extended tax deductions on housing loans. The current government under Yukio Hatoyama included incentives to build and renovate energy-efficient homes in a 7.2 trillion yen ($80 billion) stimulus package passed by parliament yesterday.

The housing recession is depleting business at the country’s construction firms. Anabuki Construction filed for bankruptcy with 140 billion yen in debt, becoming the country’s sixth-largest corporate failure last year, according to Tokyo Shoko Research Ltd. Profits in Anabuki’s condominium business plunged following the global financial crisis, the company said in a statement on its Web site.

Construction Bankruptcies

Bankruptcies in the construction industry last year accounted for more than a quarter of 15,480 failures, the highest among all industries, according to Tokyo Shoko.

Even as the employment market starts to improve, the jobless rate has been above 5 percent since last April and wages have slumped for 16 straight months. Employee compensation will slide a record 3.9 percent in the fiscal year ending March 31, and a further 0.7 percent in the following 12 months, the government said last week.

The job environment will further dissuade potential home buyers, said Hiroshi Miyazaki, chief economist at Shinkin Asset Management Co. in Tokyo. “With unemployment so high and wages dwindling, households just aren’t going to be in the mood to buy a new home.”

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Struggling to pay your FHA mortgage? Now you no longer have to be late with your payments to get help.

On Friday, the Federal Housing Administration announced that it will assist borrowers before they become delinquent. All you need do is prove your problems were caused by a reduction of income from a job loss, fewer paid hours, slashed wages or a decline in self-employed business earnings.

You may also qualify because of a change in household circumstances, such as a death or disability.

"The FHA has always required lenders to establish early contact with delinquent borrowers to discuss the reason for missing a payment and to evaluate reinstatement options," FHA Commissioner David Stevens said in a prepared statement. "Now servicers will have additional options for those borrowers who seek help before they go delinquent, which increases the likelihood that the borrower will be able to retain their home no fax payday loan."

The workouts available include forbearance, in which lenders agree to postpone or reduce payments for a specified period. This does not actually forgive the payments, they are just added to balance later in the mortgage term.

In more severe cases, borrowers may qualify for permanent payment reductions. This may be done by increasing the length of the loan, reducing the interest rate or even forgiving principal — or a combination of any of the three. 

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Early reports from stores on the holiday shopping season looked good. But it turns out retail sales actually fell in December, leaving economists scratching their heads about the state of the recovery.

Sales dropped 0.3 percent from November, mostly because people spent less on cars and appliances, the government said Thursday. For the year, sales fell 6.2 percent. Economists said the monthly decline could just be a blip and suggested looking at the past two months together, which would show spending rising modestly. But with unemployment high and credit tight, the report shows the recovery remains tentative.

"I wasn’t expecting this. It’s a bit of a puzzle," said Scott Hoyt, senior director of consumer economics at Moody’s Economy.com. "Consumer spending is growing very weakly, but the key thing is that it’s growing."

Retail sales have now fallen two years in a row. The decline in 2008 was much smaller, 0.5 percent. They are the only two years sales have fallen since the government started keeping records in 1992 bad credit unsecured personal loans.

For December, there was a 0.8 percent decline in auto sales, even as automakers report higher sales. That could be because fewer luxury cars were sold and automakers offered more incentives, said Jeff Schuster, executive director of automotive forecasting for J.D. Power.

The next few months still look scary for retailers. Stores are finding shoppers have little reason to buy now that the holidays have passed. January sales are off to a weaker-than-expected start, according to the International Council of Shopping Centers.

People "don’t see the best in front of them," said Eric Bender, retail analyst at Brean Murray, Carret & Co. "There is a tremendous amount of uncertainty."

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The biggest threat to Brazil’s economy next year is the acceleration of growth beyond 6.5 percent, Banco Safra de Investimento said.

“As long as growth estimates stay between 5.5 percent and 6.5 percent, it is still possible for the central bank to manage the growth-inflation issue,” Cristiano Oliveira, chief economist at Banco Safra, said in a telephone interview from Sao Paulo. “Above that, it will be difficult.”

Banco Safra — wholly owned by Joseph Safra, the world’s 62nd richest person, according to Forbes magazine — forecasts the central bank will raise the benchmark interest rate to 10.75 percent by the end of 2010 from a record low of 8.75 percent.

Consumer spending and capital expenditures will boost growth in Latin America’s largest economy to 5.6 percent next year, following an estimated 0.2 percent contraction in 2009, Oliveira said. Brazilian economists project a 5.1 percent expansion in 2010, according to a weekly central bank survey of about 100 financial institutions published today.

Increasing imports and profit remittances by multinationals to headquarters abroad will widen next year’s current-account deficit to “at least $54 billion,” Oliveira said. Brazilian economists expect a record $40.8 billion shortfall, according to the central bank survey.

The current-account deficit will be more than offset by $62 billion in foreign direct and portfolio investments, lifting the real to 1.65 per U.S. dollar by the end of next year, Oliveira said. The currency gained 1.2 percent at 1.7415 per dollar at 1:50 p.m. in New York, compared with 1.7630 on Dec. 24.

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NEW YORK – General Motors Co. said Friday it will shut down Saab after talks to sell the brand to a Dutch carmaker collapsed, marking the third time this year that a deal by GM to sell an unwanted brand has fallen through.

GM said it had a small window of time to complete the deal and issues arose during the sale talks with Spyker Cars that could not be resolved. GM Vice President John Smith said representatives from GM, Spyker and the Swedish government were still in discussions Friday morning when talks fell apart. Smith declined to elaborate on the reasons.

"We've been trying to restart, if you will, an investment process without a great deal of time," Smith, who is in charge of GM's corporate planning and alliances, said during a conference call with reporters. "Like everybody, we would have preferred a different outcome, and we all worked very hard for that different outcome and we've come up short.''

Saab employs about 3,400 people worldwide, most of whom work at its main plant in Trollhatten, Sweden. It also has a parts distribution center and a design center in separate locations in Sweden and an engine plant in Finland.

The brand has 1,100 dealers, whom GM said will continue to honor warranties as the brand winds down.

"It's devastating. It was a very unique brand," said Ray Ciccolo, owner of two Saab dealerships in the Boston area, one of which has been in business since 1957.

The announcement marks the death of brand with a small yet loyal following. To enthusiasts, the Swedish company became appreciated for quirks like placing the ignition lock between the front seats rather than on the steering column. It was the first to offer heated seating in 1971.

GM bought a 50 percent stake and management control of Saab for $600 million after Saab split from Swedish truck maker Scania in 1989. It bought full ownership in 2000 for $125 million. But even after the GM takeover, Saab remained closely associated with Sweden and its history of making safe, reliable cars.

GM never made money on the acquisition and industry analysts complained that under GM, Saab lost its uniqueness in the crowded luxury segment.

GM first sought a buyer for Saab in January as part of its restructuring, which included plans to cut the number of its brands to four from eight. It was previously in talks to sell Saab to a consortium led by the Swedish sports car maker Koenigsegg Group AB, but it turned to Spyker after Koenigsegg withdrew from the talks in November.

GM's Smith said it is possible other buyers could emerge, adding that the brand still has vehicles in development "that might be attractive to some folks." But no such buyers have stepped forward and the liquidation of the brand will begin in early January.

"I can't rule it out, but I guess the clock starts now … on those kinds of expressions of interest," Smith said. He declined to say how much it might cost to wind down the brand.

On Monday, China's Beijing Automotive Industry Holdings – originally part of the Koenigsegg consortium – announced it had agreed to buy some powertrain technology from Saab personal loans for bad credit. It gave no details of costs or timing of that purchase.

On Friday, Beijing Autos said it wants to explore further cooperation with GM's Saab Automobile such as "new energy vehicles." However, Smith said the company has not shown any interest in buying the rest of the brand.

The Swedish government called the decision "surprising and regretful.''

"It's GM who took this decision, on their own grounds, and they have to answer to that by themselves," Enterprise Minister Maud Olofsson said at a news conference in Trollhattan.

Representatives of the Swedish industrial workers' union, IF Metall, declined to comment on GM's announcement. Hakan Johansson, a Saab worker at the Trollhattan plant, told broadcaster Swedish Radio he was devastated by the news.

"It's not a good Christmas gift," he said.

GM's failure to sell Saab is the third deal to sell an unwanted brand that has fallen through this year.

In September, auto dealership chain owner Roger Penske scrapped plans to buy Saturn after an agreement to get cars from France's Renault fell through. GM is now phasing out Saturn.

GM's board last month ended a deal to sell the European Opel brand to a group led by Canadian auto parts maker Magna International Inc., fearing that Opel was too heavily integrated into GM's global operations and that GM technology would fall into the hands of competitors.

GM will keep and restructure Opel, which unlike Saab, is considered critical to its international vehicle development.

One success has been GM's effort to sell Hummer. The brand is going to Chinese heavy equipment maker Sichuan Tengzhong Heavy Industrial Machinery Corp.

Niche brands like Saab have been especially hard hit by the drop in auto sales as the few customers in the market are looking for more mainstream models, said Rebecca Lindland, auto industry analyst for the consulting firm IHS Global Insight.

Those difficulties make it hard for GM to sell some of its smaller brands as it restructures. GM failed to find a buyer for Saturn earlier this year and backed off plans to sell Opel to a consortium of buyers.

"This is a bad time to sell your house and it is a bad time to sell car companies," Lindland said. "This market is incredibly challenging right now because these are capital intensive purchases.''

Sales of Saab cars reached an all-time high in 2006, when GM sold 133,000 cars globally. Sales slipped to 125,000 in 2007 and fell to 93,000 in 2008.

In the U.S., Saab sold 7,812 cars through November this year, down 61 percent from the same period last year. Most of those sales came from two models, the 9-7X SUV and the 9-3 sports sedan.

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KaChing Group Inc., which runs an online service that lets individual investors emulate the trading decisions of qualified skilled investors, has received $7.5 million in a financing round led by DAG Ventures.

Palo Alto-based kaChing launched its platform in October. The company charges users an average 1.25 percent annually, as compared to the 3 percent it says is common in mutual funds saving account payday loan.

The company previously raised $3 million from individuals including Marc Andreessen and Ben Horowitz of Andreessen Horowitz, Jeff Jordan, CEO of Open Table and former president of PayPal and various other well known venture capitalists.

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