Business Highlights Jan. 13

November trade deficit increases to $36.4 billion

WASHINGTON (AP) - The U.S. trade deficit jumped to the highest level in 10 months as an improving U.S. economy pushed up demand for imports. However, exports rose as well, boosted by a weaker dollar, supporting the view that American manufacturers will be helped by a rebounding global economy.

The Commerce Department reported Tuesday that the trade deficit jumped 9.7 percent to $36.4 billion in November, a bigger imbalance than the $34.5 billion deficit economists had forecast.

Exports rose 0.9 percent, the seventh consecutive gain, as demand was up for American-made autos, farm products and industrial machinery. Imports, however, rose a much faster 2.6 percent, led by a 7.3 percent rise in petroleum imports.

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Weaker Alcoa results, China news drag stocks lower

NEW YORK (AP) - Investors are suffering another bout of pessimism about the strength of the global economic recovery.

Stocks fell sharply Tuesday, sending the Standard & Poor's 500 index down nearly 1 percent. Demand for the safety of Treasurys sent bond prices higher and interest rates lower, tightening the market barometer known as the yield curve. The Dow Jones industrial average fell 36.73, or 0.3 percent, to 10,627.26.

A disappointing profit report from Alcoa Inc. and moves by China to curtail growth raised questions about whether a 10-month surge in stocks can be sustained. At the same time, financial stocks slid on concerns the government would impose taxes on bailed out banks.

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Subpoena would probe Geithner's AIG decisions

WASHINGTON (AP) - Treasury Secretary Timothy Geithner came under increased scrutiny Tuesday when a key congressman said he would subpoena the Federal Reserve Bank of New York about bailout decisions made on Geithner's watch.

Rep. Edolphus Towns, D-N.Y., said Tuesday he will subpoena the New York Fed for documents related to the bailout of failed insurer American International Group Inc.

Towns chairs the House Oversight and Government Reform Committee. The committee is investigating deals that diverted billions of AIG bailout dollars to banks including Goldman Sachs Group Inc.

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SEC bring new charges against Bank of America

NEW YORK (AP) - Federal regulators sued Bank of America Corp. on Tuesday, accusing the company of failing to disclose "staggering financial losses" at Merrill Lynch before shareholders approved a combination of the companies.

The lawsuit filed by the Securities and Exchange Commission in U.S. District Court in Manhattan sought an order requiring Bank of America to pay a civil penalty for not telling shareholders it was losing $15.3 billion in the fourth quarter of 2008.

Bank of America spokesman Robert Stickler called the charges "totally without merit." He said the company believes it provided sufficient and appropriate disclosure to shareholders prior to their vote approving the combination.

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Job openings drop as hiring remains elusive

WASHINGTON (AP) - The competition for jobs is intensifying as companies are reluctant to hire new workers, leaving millions of unemployed Americans chasing fewer job openings.

There were nearly 6.4 unemployed workers, on average, for each available job at the end of November, according to Labor Department data released Tuesday. That's up from 6.1 in October and a record high.

There were 1.7 jobless people for each opening in December 2007, when the recession began.

Job openings fell sharply to 2.42 million in November from 2.57 million in October, according to the department's Job Openings and Labor Turnover survey.

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Fed adopts new rules to protect credit card users

WASHINGTON (AP) - The Federal Reserve on Tuesday issued sweeping new rules to better protect Americans from sudden hikes in interest rates on credit cards.

The new rules, which take effect on Feb. 22, generally bar rate increases during the first year after an account is opened. After the first year, companies must provide customers with a 45-day notice before bumping up rates.

Some lenders have pushed through rate increases ahead of the new rules. That irked lawmakers in Congress who had wanted to speed up implementation of the Fed's rules.

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Another chain pulls cadmium-tainted kids' jewelry

LOS ANGELES (AP) - A second international chain store said it is pulling from shelves jewelry that lab tests show contained high levels of the heavy metal cadmium, and Chinese regulators said they will investigate dangerous levels of the toxin in children's jewelry being exported to the United States. Also, a U.S. senator called for hearings.

The jewelry and accessories store Claire's, with nearly 3,000 locations in North America and Europe, on Tuesday joined Wal-Mart Stores Inc. in saying it would stop selling any item cited in an Associated Press investigation of the presence of cadmium in cheap bracelets and charms.

Charms on a "Best Friends" bracelet sold at Claire's contained 89 and 91 percent cadmium, according to testing organized by AP, and shed alarming amounts in a procedure that examined how much cadmium children might be exposed to.

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Grain prices sink as crop report shows big supply

NEW YORK (AP) - Grain prices tumbled Tuesday after the Department of Agriculture said 2009 crops came in above previous estimates.

Corn, soybean and wheat prices all plummeted on the Chicago Board of Trade following a government report that showed corn and soybean production surpassed forecasts made in November and hit record levels last year.

Even though the agency may update its harvest estimates again in March, analysts say the market has heard enough from the January report to conclude that this year's grain crops were abundant enough to send futures prices sharply lower.

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Prosecutor: Inside trades maybe topped $50 million

NEW YORK (AP) - Insider trading profits for a wealthy hedge fund operator may have topped $50 million, a prosecutor told a judge Tuesday as he argued unsuccessfully for him to be jailed pending trial.

Assistant U.S. Attorney Josh Klein told Judge Richard Holwell in federal court in Manhattan that overwhelming evidence cited by the government at the time of Raj Rajaratnam's October arrest continues to get stronger.

The swelling numbers documented by the government mean the total attributed to inside trades by Rajaratnam may be more than $50 million, Klein said.

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EU stats office: Greek economy figures unreliable

BRUSSELS (AP) - Eurostat, the European Union's statistics arm, said Tuesday that Greece's government budget figures were unreliable and seem to have been falsified to play down a budget crisis that has shaken the EU.

Eurostat said the Greek statistical office NSSG had complained of political interference in the financial figures that were sent to the EU executive in October. The NSSG is currently controlled by the Greek Finance Ministry.

The ministry blamed the problems on Greece's previous conservative government when "every sense of statistical reliability and transparency was abused." The ministry said it planned reforms to make NSSG independent, but did not say when that would happen. By The Associated Press

The Dow Jones industrial average fell 36.73, or 0.3 percent, to 10,627.26.

The S&P 500 index fell 10.76, or 0.9 percent, to 1,136.22, after advancing for the first six days of the year for the first time since 1987. The Nasdaq composite index fell 30.10, or 1.3 percent, to 2,282.31.

Benchmark crude for February delivery fell $1.73 to settle at $80.79 a barrel on the New York Mercantile Exchange. It's the first time this year a barrel has closed below $81.

In other Nymex trading in February contracts, heating oil fell 4.83 cents to settle at $2.1318 a gallon and gasoline slipped 4.49 cents to settle at $2.0978 a gallon. Natural gas futures rose 13.7 cents to settle at $5.591 per 1,000 cubic feet.

In London, Brent crude for February delivery fell $1.67 to settle at $79.30 a barrel on the ICE Futures exchange.