Sudan asks to deal with China in yuan and pounds-cbank

Sudan is in talks with China to see if the two countries can do business in Sudanese pounds and Chinese yuan, rather than U.S. dollars, Sudan's central bank governor said on Wednesday.
The Sudanese pound has weakened sharply against the dollar on the black market since South Sudan seceded in July, taking about three-quarters of the country's roughly 500,000 barrels per day of oil output - a major source of foreign currency.
China has been a major investor in both African countries in areas including construction and oil.
"We have submitted an official request to China to deal with them in Sudanese pounds and Chinese yuan, and it is possible that after a short while we could exit finally from the dollar," Central Bank Governor Mohamed Kheir al-Zubeir told reporters.

"The dollar has become weak and is deteriorating."
He said Sudan's central bank was discussing the issue with China's central bank, but did not give a timeline or other details about the proposed arrangement.
"We believe that very soon China will become the number one economic power in the world," Zubeir said.
The loss of oil revenues has helped to drive up the cost of food and other imports, fuelling inflation and biting an economy already hit hard by decades of war, mismanagement and U.S. trade sanctions.
Sudanese officials say they plan to implement an austerity programme and make up for lost oil revenues with agriculture, gold, and other sources of income.
South Sudan broke away in July after voting for independence under a 2005 peace deal that ended decades of civil war between north and south.
Sudan was China's sixth biggest source of imported crude oil last year -- before the split -- when it supplied 12.6 million tonnes, compared with 44.6 million tonnes from the top supplier, Saudi Arabia.
Khartoum's proposal to China does not include at all South Sudan which is fully independent, has its own currency, and has scant policy coordination with its northern neighbour.

China blames 54 officials for bullet train crash

A long-awaited government report said design flaws and sloppy management caused a bullet train crash in July that killed 40 people and triggered a public outcry over the dangers of China's showcase transportation system.
A former railway minister was among 54 officials found responsible for the crash, a Cabinet statement said Wednesday. Several were ordered dismissed from Communist Party posts but there was no word of possible criminal penalties.
The crash report was highly anticipated. The disaster near the southern city of Wenzhou also injured 177 people and had triggered criticism over the high cost and dangers of the bullet train system, a prestige project that once enjoyed lofty status on a level with China's manned space program.

Regulations had required the report to be released by Nov. 20. When that date passed, the government offered little explanation, drawing renewed criticism by state media, which have been unusually skeptical about the handling of the accident and the investigation.
The Cabinet statement cited "serious design flaws and major safety risks" and what it said were a string of errors in equipment procurement and management. It also criticized the Railways Ministry's rescue efforts.
The report affirmed earlier government statements that a lightning strike caused one bullet train to stall and then a sensor failure and missteps by train controllers allowed a second train to keep moving on the same track and slam into it.
Those singled out for blame included former Minister of Railways Liu Zhijun, a bullet train booster who was detained in February amid a graft investigation. Also criticized was the general manager of the company that manufactured the signal, who died of a heart attack while talking to investigators in August.
The decision to assign blame to one figure who already has been jailed and another who is dead, along with mid-level managers who have been fired, suggests further political fallout will be limited.
Several officials including a former Communist Party secretary of the Shanghai Railway Bureau were ordered dismissed from their party posts, a penalty that is likely to end their career advancement. Others received official reprimands but there was no mention of possible criminal charges.
The bullet train, based on German and Japanese systems, is one facet of far-reaching government technology ambitions that call for developing a civilian jetliner, a Chinese mobile phone standard and advances in areas from nuclear power to genetics.
The bullet train system quickly grew to be the world's biggest but has suffered embarrassing setbacks. After the Wenzhou crash, 54 trains used on the Beijing-to-Shanghai line were recalled for repairs following delays caused by equipment failures.
Critics complain authorities have spent too much on high-speed lines while failing to invest enough in expanding cheaper, slower routes to serve China's poor majority.
Beijing is rapidly expanding China's 56,000-mile (91,000-kilometer) rail network, which is overloaded with passengers and cargo. But it has scaled back plans amid concern about whether the railway ministry can repay its mounting debts.
On Friday, the current railways minister, Sheng Guangzu, announced railway construction spending next year will be cut to about 400 billion yuan ($65 billion), down from this year's projected 469 billion yuan ($75 billion).
A failure to expand rail capacity could choke economic growth because exporters away from China's coast rely on rail to get goods to ports.
The rail ministry's reported debt is 2 trillion yuan ($300 billion). Analysts say its revenues are insufficient to repay that. That has prompted concern the ministry might need to be bailed out by Chinese taxpayers.

Maine fishermen expect record prices for scallops

Maine scallop fishermen expect to get record prices for their catch this season with strong global demand and a diminished supply from Japan and other competing, scallop-producing nations.
The weak U.S. dollar also is helping boost prices, said Dana Temple, who owns Crescent Bay Inc. seafood company in Cape Elizabeth.
"The prices these guys are going to get are probably going to be higher than they've ever gotten in the history of this fishery," said Temple, who's been selling scallops for 35 years. The higher price for fishermen also means consumers will pay more in restaurants and food stores.

Sea scallops, which are similar to but bigger than bay scallops, have been harvested along the Maine coast since the late 1800s, and at times, it has been the state's second most-valuable seafood, behind lobsters.
The state's scallops are considered high quality because they're brought to shore the same day boats drag them off the ocean floor with devices that look like big metal mesh bags or divers harvest them by hand. The large boats that drag for scallops on Georges Bank off southern New England can spend five days or more at sea before they bring their catch to port. The scallops are shucked at sea, with the shells thrown back into the ocean.
But Maine's fishery has had its ups and downs, with fishing increasing sharply when scallops are plentiful. In the 1980s and '90s, Maine fishermen routinely harvested well over a million pounds of scallop meat in state waters, with the catch valued at $5 million to $10 million a year. The harvest peaked at 3.8 million pounds worth $15 million in 1983.
In recent years, the catch has fallen off sharply, which regulators blame on overfishing. Fishermen caught 195,000 pounds valued at $1.6 million in Maine waters last year, according to the Department of Marine Resources. That was just a drop in the bucket compared to the entire U.S. wild catch, which totaled 58 million pounds valued at $455 million.
Still, scallops provide a supplemental income in the winter for fishermen who go after lobsters, groundfish and sea urchins at other times.
Maine instituted measures two years ago to help restore scallop populations and address overfishing. It shut down 20 percent of the coastline to scallop fishing, froze the number of fishing licenses, shrunk the season, increased the legal size limit and limited the daily catch. The areas closed to fishing are scheduled to open after the current season ends.
There are signs the conservation efforts have started to pay off. In Cobscook Bay near Canada, the mass of scallops increased five-fold in one area just a year after it was closed to fishing. Fall surveys show promise in some, but not all, of the other closed areas.
"I think it's coming back," said James Ackley, a Machias fisherman. "But it took 12 to 15 years to get where it was, so it won't get back overnight."
The Maine scallop season began Dec. 17 and runs through March. Its opening day drew lots of boats, especially to Cobscook Bay. There, fishermen reported smaller and fewer scallops than expected, prompting the Department of Marine Resources to call a meeting with fishermen this week to get a handle on what's going on.
The scallop population is highly variable from place to place, and fishermen won't know for certain how successful the conservation efforts have been until closed areas are reopened next year, said Robin Alden, director of Penobscot East Resource Center, a Stonington-based nonprofit that works on fishery issues in eastern Maine.
"We don't know yet if the scallop closed areas are going to replenish," she said. "It'll probably be yes in some places and no in others. It depends on whether you chose the right areas in the first place and then what Mother Nature does with it."
But for the scallops fishermen get, the price will likely be high. Ackley and others expect perhaps $10 a pound or even more.
The U.S. scallop market has been strong in recent years, with the per-pound price that fishermen received rising 28 percent from 2009 to 2010 to $7.92 a pound.
With Japanese scallop exports way down after last March's tsunami and nuclear disaster, supplies remain tight and prices will likely stay high, Temple said. Although there's little, if any, health threat from Japanese scallops, buyers don't want to pay high prices for scallops that the public is wary of, he said.
"Japan used to send hundreds of loads of product over here, and it's tough to sell it now," Temple said.
The higher prices and rebounding scallop populations are good news for Maine fishermen, Ackley said. But he's concerned those factors could also result in more fishing that would send stocks plummeting again.
Maine sells 800 scallop fishing licenses a year, but last year, only 234 fishermen actually caught scallops. If the population and price are good enough, more could head out this year.
"I think the effort will be more this year than it's been for four or five years," Ackley said. "And I believe next year there will be even more effort."

Morgan Stanley to cut 580 jobs in New York

Of the 1,600 job cuts announced earlier this month by Morgan Stanley, 580 will be at its home base in New York.
The relentless tug of the dismal economy is hitting employees in the banking sector hard, and it's no surprise that many of the job cuts are hitting the epicenter of the financial industry. Citigroup, with its headquarters a seven-minute drive up Park Ave. from Morgan Stanley in Manhattan, said recently that it would eliminate 4,500 jobs, or about 1.5 percent of its global work force of 267,000, over the next few quarters.
But jobs are being slashed by banks almost everywhere.
In September, Bank of America Corp., based in Charlotte, N.C., said it would cut 30,000 jobs over the next few years. Swiss lender UBS is downsizing its investment bank to 16,000 people from the current 18,000 as it reduces its exposure to risk.

Morgan Stanley disclosed in a filing with the Labor Department on Wednesday that the cuts will be made at four New York locations: 1221 Ave. of the Americas, 1 New York Plaza, 1585 Broadway and 750 Seventh Ave.
The investment bank said that the layoffs — which began two weeks ago and will represent 2.6 percent of its work force — will hit all levels of the company and would go on through the first three months of next year.
Morgan Stanley had more than 62,000 employees at September's end.

Stocks open lower as European worries persist

Stocks opened slightly lower Wednesday as worries over the European debt crisis persist, overshadowing a strong auction of Italian government debt.
The European Central Bank said the continent's banks parked a record $590.72 billion overnight at the bank, reflecting distrust in the European banking system.
Italy held two successful bond auctions, paying much lower borrowing rates than it did in other auctions last month. The strong demand from investors raised hopes that Italy would be able to avoid sinking into a financial crisis, as smaller countries like Greece and Portugal have.

The Dow Jones industrial average was down 56 points at 12,235 as of 10 a.m. Eastern. Materials and energy companies were leading the declines. Alcoa Inc. fell 1.4 percent. Only one of the 30 stocks in the Dow average rose, AT&T Inc.
Trading was very quiet in a holiday-shortened week. Markets were closed Monday in observance of Christmas. The Dow closed 2 points lower Tuesday.
The S&P 500 was down 6 points at 1,258. The Nasdaq composite was down 17 points at 2,608.
The Bank of Italy raised $11.8 billion in two bond auctions, reflecting investor approval of the country's recently passed austerity measures. The yield on Italy's six-month bill offering was half the interest rate the country paid in a similar auction last month. The yield on the country's 10-year bond remained dangerously high, however, at 6.93 percent. It had risen to 7 percent Tuesday, a level that is considered unsustainable.
Italy is the euro zone's third-largest economy and is considered too big to save under the euro zone's current bailout funds. Investors have grown fearful over the past few months that Italy will find it difficult to pay off its massive debts, which stand at around $2.5 trillion.
Investors particularly feared that a global contagion could spread if any of the European countries defaulted on their debt. European banks held large quantities of debt from their countries.
The banks' distrust of each other was reflected in the record amounts of money they have parked with the European Central Bank. Instead of making money by lending to each another, banks have chosen to hold money at low interest rates at the ECB.
The worries were reflected in U.S. bank stocks. Bank of America Corp. fell 2 percent, while Regions Financial Corp. fell 3 percent.

Against odds, Lipitor became world's top seller

Lipitor, the best-selling drug in the history of pharmaceuticals, is the blockbuster that almost wasn't.
When it was in development, the cholesterol-lowering medicine was viewed as such an also-ran it almost didn't make it into patient testing.
By the time Lipitor went on sale in early 1997, it was the fifth drug in a class called statins that lower LDL or bad cholesterol. The class already included three blockbusters, drugs with sales of $1 billion a year or more. Normally, that would make it very tough for a latecomer to sway many doctors and patients to switch.

But a 1996 study showed Lipitor reduced bad cholesterol dramatically more than the other statins, from the very start of treatment and even more so over time. A striking graph of those results helped Lipitor sales representatives turn it into the world's best-selling drug ever, with more than $125 billion in sales over 14 1/2 years.
Nicknamed "turbostatin," Lipitor became the top-selling statin barely three years after it was launched. It's provided 20 percent to 25 percent of Pfizer Inc.'s annual revenue for years.
But after nearly a decade as the top-selling drug, Lipitor is set to be toppled in 2012 after getting its first generic rivals four weeks ago.
It's a run not likely to be repeated.
Back in the early 1980s, the public was just starting to learn what cholesterol was. There was little evidence that controlling it with medication could be so crucial in preventing disability and early death, and the coming epidemic of obesity and diabetes in an aging population wasn't foreseen.
At the time, heart attack prevention basically amounted to telling patients to eat more oatmeal and skip the steak.
Lipitor creator Warner-Lambert, a midsized drugmaker best known for consumer health products including Listerine, Benadryl allergy pills and Halls cough drops, got a late start in what turned into a surprisingly fast-growing market.
Merck & Co. had a decade lead with Mevacor, launched in 1987. By 1994, its successor drug, Zocor, along with Bristol-Myers Squibb Co.'s Pravachol and Novartis AG's Lescol, had crowded the market.
"Those other companies didn't even take us seriously. They didn't think we could be a viable contender," said Adele Gulfo, then head of cardiovascular marketing at Warner-Lambert Co. who now heads Pfizer's primary care drugs business.
Doctors said they were "quite satisfied with the medicines we have," she recalled recently.
Given that, marketing executives at Warner-Lambert were projecting Lipitor sales of $300 million a year at best, recalls the drugs's inventor, chemist Bruce D. Roth.
"I wish someday you guys could make us a drug we could sell," the marketers told his team, recalls Roth, a research vice president for Genentech, a biotech pioneer now owned by Swiss drugmaker Roche.
They had, but didn't see it.
"There was a lot of controversy at Warner-Lambert as to whether we should even take our molecule into the clinic" for human testing, Roth says. "It was kind of a big risk. ... It's millions of dollars."
But senior management was persuaded in 1990 to at least fund the initial round of testing on a couple of dozen employee volunteers.
The results were far better than what had been seen in the animal tests.
"It tremendously, incredibly outperformed the other statins," Roth says. "It was as good at its lowest dose as the other statins were at their highest dose."
So Warner-Lambert partnered with much-larger Pfizer Inc., considered the industry's top marketer, first to help fund the expensive late-stage testing of the drug in people and then to promote Lipitor after it was launched. Pfizer bought out Warner-Lambert in 2000 to block two other companies trying to acquire it and get control of Lipitor.
Pfizer benefited from some lucky timing: Lipitor went on sale in 1997, the year the Food and Drug Administration first allowed drug ads targeting consumers.
So Pfizer spent tens of millions on ads, including on the popular drama "ER," first urging patients to "Know Your Numbers" and then showing patients discussing how Lipitor helped them get their cholesterol numbers below guideline goals.
Meanwhile, health groups kept lowering the cholesterol targets in national guidelines, making millions more patients good candidates for statin treatment, as new research showed the link between cholesterol levels and consequences such as heart attacks. All those new patients boosted sales for the whole statin class, particularly Lipitor.
The Lipitor promotion team set new standards for a marketing campaign. They repeatedly visited family doctors as well as cardiologists, and blanketed patients with data showing that Lipitor was best at lowering cholesterol. They stressed to doctors nervous about safety that Lipitor's lowest dose worked as well as rivals' highest doses. They gave free samples of the white pills and sometimes bought lunch for the office staff.
In another savvy move, Lipitor was priced below rival drugs.
The company continued research on Lipitor, through this year conducting more than 400 studies, costing roughly $1 billion and including more than 80,000 patients. The studies have shown how Lipitor helped patients with heart problems, diabetes, stroke risk and other conditions, by preventing heart attacks and strokes and reducing plaque buildup in arteries.
Even with Zocor, Pravachol and Mevacor all going generic several years ago, and AstraZeneca PLC's Crestor joining the market in 2003, Lipitor sales have remained strong. It's the only brand-name drug among the 20 most-dispensed drugs in the U.S., according to data firm IMS Health.
But Pfizer, the world's largest drugmaker by revenue, has struggled to develop another runaway blockbuster. Its bid to create a next-generation statin flamed out in 2007 when it had to abandon heavily touted compound torcetrapib after roughly $800 million in testing, because it raised heart attack and stroke risk.
In recent years, Pfizer has focused on creating other types of drugs and on another unprecedented strategy — this one for hanging onto Lipitor revenue until June, when multiple new generic Lipitor versions will join one sold by Ranbaxy Laboratories and the authorized generic from Watson Pharmaceuticals Inc. Pfizer is offering patients and insurance plans big discounts and rebates, including cards giving patients a $4 monthly copayment, if they stay on Lipitor until then.
But branded Lipitor is by no means history.
Its patent is still in force in many major foreign countries and Pfizer is promoting it heavily in emerging markets such as China.
Pfizer's strategy to keep U.S. patients on Lipitor appears to be working a little better than some analysts expected: The number of Lipitor prescriptions filled in the first full week after generics arrived fell by only half.
Sanford Bernstein analyst Dr. Tim Anderson forecasts Lipitor sales will decline from about $11 billion in 2009 and 2010 to $3.9 billion next year and just above $3 billion in 2015.
That would make it Pfizer's No. 3 drug that year — and possibly still among the world's 20 top-selling drugs by revenue, as half those on the current list also will have generic competition by then.

Last-minute holiday shopping gives lift in finale

The holiday shopping season turned out to be two seasons split by a big lull.
A surge in buying in the two weeks before Christmas coupled with a record-breaking Black Friday to give retailers a solid season. The doldrums between the buying binges show how shoppers have learned to wait for the discounts they know will come.
Last-minute shoppers shoppers gave retailers a 4.5 percent increase in revenue at stores open at least a year in the week before Christmas compared with the same week last year, according to the International Council of Shopping Centers-Goldman Sachs Weekly Chain Store Sales Index.

The increase is good news for the economy, because it showed shoppers were willing and able to fund a holiday splurge. Consumer spending, including major items such as health care, accounts for 70 percent of the economy.
Still, plenty of shoppers are pinched for cash in the slow economic recovery, and were seeking the best deals. Stores have trained even shoppers who are primed to spend to look for a discount.
Gift buyers gained steam in as the season went on. The store revenue figure rose 0.9 percent last week from the week before, building on a 3.4 percent increase the week before that.
"The downs and ups were much more accentuated," said Michael P. Niemira, chief economist at the trade group. "It just shows how cautious the consumer is. Consumers are bargain hunters more today than ever before."
The index estimates sales at 24 major stores including Macy's Inc. and Costco Wholesale Corp. Revenue at stores open at least a year is an important measurement of a retailer's performance because it excludes the effects of stores that open or close during the year.
The post-Black Friday lull was deeper than usual this year. The two weeks after Thanksgiving weekend showed the biggest percentage sales decline since 2000. Then, during the final two weeks before Christmas, sales surged again, by the highest rate since 2005, Niemira said.
"The holiday season was good but uneven," Niemira said.
Stores are expected to benefit when shoppers come back to spend their gift cards, because people often spend more than the cards' value. In addition, gift card sales are only recorded when shoppers redeem them.
People have more money on their cards to spend. According to an ICSC-Goldman Sachs survey of shoppers conducted Sunday, 18 percent of holiday spending went toward gift cards, up from 14.6 percent last year.
ICSC said it expects holiday sales for November and December to rise in line with its forecast of 3.5 percent.
A fuller holiday spending picture will come Jan. 5, when stores including Target Corp. and Macy's will release December sales figures.

Stocks fall on thin volume, oil eases

Stocks fell on Wednesday as thin trading volumes discouraged investors from resuming last week's rally while oil prices eased after Iran's threat to close the Gulf was written off as rhetoric.
A strong sale of short-term Italian debt brought some relief to European markets, giving a temporary boost to the euro. Investors remained cautious, however, before a much bigger sale of longer-term bonds by Italy on Thursday.
Key U.S. stock indexes fell, including a 1 percent decline by Nasdaq, as investors awaited the beginning of 2012 to make any big bets. The broad S&P 500 index erased its 2011 gains after just turning positive during last week's rally.

The Dow Jones industrial average <.DJI> lost 80.26 points, or 0.65 percent, at 12,211.09. The Standard & Poor's 500 Index <.SPX> was down 10.03 points, or 0.79 percent, at 1,255.40. The Nasdaq Composite Index <.IXIC> fell 24.63 points, or 0.94 percent, at 2,600.57.
Wall Street's decline weighed on European stocks, which erased earlier gains. The FTSEurofirst 300 <.FTEU3> index of top European shares fell 0.33 percent, after rising as much as 0.63 percent earlier.
The MSCI All-Country World index <.MIWD00000PUS> lost 0.83 percent, increasing losses in the year-to-date to 10 percent.
U.S. crude oil prices fell 1.15 percent to $100.17 a barrel. They had gained more than a dollar in the previous session following a threat by Iran to stop oil shipments through the Strait of Hormuz if Western countries impose new sanctions on its exports.
Tehran faces the prospect of further sanctions from the European Union by the end of January over its nuclear ambitions. Washington said it saw "an element of bluster" in the threat to close the Gulf.
"The threat by Iran to close the Strait of Hormuz supported the oil market yesterday, but the effect is fading today as it will probably be empty threats as they cannot stop the flow for a longer period due to the amount of U.S. hardware in the area," said Thorbjoern bak Jensen, oil analyst with Global Risk Management.
ITALY GETS BOOST
The euro briefly rose against the dollar after Italian short-term debt costs halved at an auction, helped by a new government austerity package and cheap liquidity from the European Central Bank.
The euro edged up to a session high of $1.3080 after the Italian auction but later reversed those gains to fall to 1.2955, 0.86 percent lower on the day but still above the $1.2945 hit earlier in the month, its weakest since January.
Italy faces the more difficult task of selling long-term debt on Thursday, when it will need greater commitment from international investors to place 8.5 billion euros of debt with maturities of up to 10 years.
"Tomorrow's auction is more important and will give more insight into general sentiment. Today was a warm-up," said Neil Mellor, currency strategist at Bank of New York Mellon.

Whistleblower documents illuminate case against BNY Mellon

Confidential whistleblower documents that helped spark a massive state and federal investigation into how Bank of New York Mellon Corp charged pension funds for currency exchange, provide a rare window into how a bank insider aided a lawsuit against the bank.
The information provided by whistleblower Grant Wilson, who worked at BNY Mellon, included a detailed analysis of how the bank allegedly provided "fictitious" foreign-currency costs for pension funds.
The analysis included a step-by-step guide to how currencies were traded and internal profits generated by the bank, according to documents seen by Reuters. A memo detailing fellow employees also was provided.

Aided by Wilson's information, multiple states, including Virginia, Florida and New York, have sued BNY Mellon, alleging that the bank improperly charged state and local pension funds for foreign exchange. The Department of Justice also has sued the bank.
The allegations center on claims that BNY Mellon provided unfavorable currency-exchange rates for state and local pension funds for a decade. In a lawsuit in October, the New York attorney general alleged BNY Mellon earned $2 billion over the decade from the trading.
A bank spokesman said the bank believes that many comments detailed in the documents were taken out of context or not said at all.
"A handful of purported statements cherry-picked from millions of documents gathered over a decade do not reflect the way we do business or the value we provide our client," the spokesman said.
The documents illuminate why insiders with highly confidential information can be a potent force in whistleblower lawsuits. Much of the information a whistleblower provides remains confidential.
Wilson, for example, worked at the bank even as he secretly provided to his legal team -- lawyers in Boston and New York -- information about how BNY Mellon allegedly conducted foreign-exchange trading.
Wilson's information was provided to the legal team that filed whistleblower lawsuits against BNY Mellon in 2009 and then aided state attorneys general in subsequent probes. The legal team includes Boston lawyer Michael Lesser, and Philip Michael, a lawyer in New York, as well as Harry Markopolos, a fraud investigator best known for warning that Bernard Madoff was operating a fraudulent scheme.
Lesser, an attorney at Thornton & Naumes, said Wilson was not available for a comment.
The information then was provided by Wilson's lawyers to the Florida attorney general in 2009 and 2010. The attorney general at the time was weighing whether to intervene in an October 2009 whistleblower lawsuit against BNY Mellon. That lawsuit was based on Wilson's information.
In August this year, Florida Attorney General Pamela Jo Bondi filed her lawsuit in Leon County.
A bank spokesman said the Florida lawsuit is "without merit."
The Wall Street Journal earlier this year identified Wilson as the whistleblower behind the state and federal investigations and reported the existence of the documents.
Wilson, according to the documents, worked as a foreign-exchange trader for 19 years. He joined a predecessor bank to BNY Mellon in 1997 and left this spring. He worked at BNY Mellon's Pittsburgh office.
The documents detail Wilson's experience at the bank, noting that the trader "possesses deep and sophisticated knowledge and personal experience in these businesses, particularly with regard to foreign exchange." The documents note that he "never received a reprimand" during his career.
Wilson's first-hand knowledge was crucial to the state lawsuits. Information provided in 2009 underpinned subsequent state claims. Wilson "can describe, step-by-step, how the fraud is committed against the affected funds and how the various departments of the Bank work to make the process as profitable as possible," one document alleges.
Wilson and his lawyers, for example, provide 11 chronological steps to explain how pension clients allegedly receive a "falsified trade price," documents show. Those clients used a so-called "standing-instruction" program in which they effectively give control of foreign exchange to the bank.
In one document, Wilson's lawyers provide a question-and-answer tutorial so the Florida attorney general's office knows the right questions to ask BNY Mellon employees.
The documents also show how Wilson aided the legal effort even as he continued to work at BNY Mellon. One memo was written by Wilson's lawyers in August 2010, some eight months before Wilson left the bank. In the memo, Wilson's lawyers tell the Florida attorney general that Wilson knows that efforts to obtain documents from the bank are being stymied with "claims of difficulty in production or other delays."
The memo, using Wilson's knowledge of the bank, states that the information actually could be easily obtained because it is "centrally stored."
"It is stored at a state-of-the-art facility that should hasten, rather than hinder, any document response from the bank."
A month later, in September 2010, Wilson's lawyers submitted another memo to Florida's attorney general, noting: "We would also like to remind you that (Wilson) continues in his employment at the bank. Specific information, documents and conversations mentioned here could be connected" to Wilson.
That memo alleges that BNY Mellon "is now actively and hurriedly formulating a strategy" aimed at preserving profits from the foreign-exchange business at the center of the state inquiries. The memo explains that BNY Mellon publicly wants to provide a supposedly more "transparent" foreign-exchange system.
Actually, the "Project Gateway" strategy provides "no true change," the memo claims.
The memo also claims that one BNY Mellon client had received better pricing on currency transactions even as the bank continued "to steal" from other clients.
The documents also show some inside BNY Mellon allegedly worried about the impact of the investigations and whether profits would soon disappear. One employee, having learned that probes were looking at how BNY Mellon traded currencies, said: "It's over, it's all over," according to a March 2010 document.
Another document describes two months later how a senior banker addressed FX traders and told them the bank had received 16 subpoenas. This employee told the traders, "We have not done anything wrong."
In a seven-page memo, Wilson and his legal team provided detailed biographies of fellow traders and employees at BNY Mellon to help determine whether they might be helpful in the whistleblower legal effort. One employee was described as "worried about job security ... Not financially secure. Scared and probably loyal to the Bank. But also would not be inclined to perjure herself ... She has a lot of information."
Another senior executive "likes to rant and rave ... Mr. Wilson assumes he will want to defend the bank." A sales executive "seems willing to push the envelope when it comes to producing profits."

S&P 500 erases gains for year

The S&P 500 erased its gains for the year on Wednesday as Wall Street reversed some of its recent year-end rally, with many investors expressing concern about the outlook for early 2012.
The Dow Jones industrial average <.DJI> dropped 82.65 points, or 0.67 percent, to 12,208.70. The Standard & Poor's 500 Index <.SPX> dropped 10.40 points, or 0.82 percent, to 1,255.03. The Nasdaq Composite Index <.IXIC> dropped 24.73 points, or 0.94 percent, to 2,600.47.

Analysis: China needs new policy course as capital tide turns

China's economy has surfed for years on a crest of hefty capital inflows, but the tide that brought gains in money supply is turning as global growth slows.
Capital has flowed out the past two months. If that persists, the challenge for the People's Bank of China will be to adjust policies to keep the country's growth rates from falling much.
That will be no mean feat for policymakers schooled in absorbing inflows averaging 256 billion yuan ($40.5 billion) a month since July 2005, but short on experience of how to handle outflows.

"I think this indicates a significant change in the environment for monetary policy -- from large 'twin surpluses' to a more balanced external position," Hua Zhongwei, an economist at Huachuang Securities in Beijing, told Reuters.
"So the situation under which the central bank 'passively' releases liquidity into the economy will change. It may have to pump out money in a pro-active way," he said.
The most likely way that pump will operate is through a simple reversal of the increases in the amount of cash commercial banks are required to keep as reserves -- the same tool that was used to drain the excess liquidity created by capital inflows.
The 600 basis points of required reserve ratio (RRR) hikes between January 2010 and June 2011 to a record level of 21.5 percent drained some 4 trillion yuan from China's economy.
That was as the central bank fought to bring money supply growth down from a breakneck -- and dangerously inflationary --pace close to 30 percent in late 2009, to a level closer to the 12-14 percent that international economists believe China targets.
A WAY TO COMPENSATE
Unlocking that reservoir of reserves is the obvious way to compensate for the $8.3 billion in outflows revealed in central bank foreign exchange data for October and November. The 50 bps RRR cut on November 30 released an estimated 350 billion yuan into the banking system.
Capital outflows from China may continue in the short term as Europe's sovereign debt crisis undermines risk appetite and investors seek safe havens.
Foreign direct investment in China fell 9.8 percent in November from a year earlier to $8.8 billion, the first drop in 28 months as inflows from the United States and Europe faltered.
The beauty of injecting liquidity via RRR cuts is that it compensates for capital flight without notionally shifting the declared stance of monetary policy, assuming it is the level of money supply growth that officials target.
That's especially important in an economy with average inflation this year running 1.5 percentage points above the 4 percent official target and retail sales growth galloping at a 17 percent clip so far in 2011.
The central bank insists it will keep policy prudent in 2012, even though many economists believe it shifted to a looser policy stance when it cut banks' reserve requirement ratio (RRR) in November for the first time in three years.
CREATING CASH POOLS
Central bank governor Zhou Xiaochuan has raised the idea of creating cash "pools" to absorb hot money inflows. Analysts say that implies Zhou always intended to recycle the cash mopped up via reserve rises to cushion slowing growth.
"It's time to unleash money from the pools," Hua said.
Private sector economists polled by Reuters earlier this month expected the PBOC cut deliver 200 bps of RRR cuts by the end of 2012 and refrain from an outright cut to interest rates unless there is a sudden shock to the economy.
The next cut in the RRR is widely expected to come soon because demand for bank liquidity rises ahead of the Chinese Lunar New Year, which begins on January 23.
A related issue for liquidity is that the amount of maturing central bank bills is expected to shrink to a monthly average of 65 billion yuan in the January-March period from a monthly average of 222.5 billion yuan in 2011.
Freeing up the money banks can lend is desirable on many levels for China's leadership, which remains sensitive to public opinion despite the lack of direct parliamentary elections.
Real returns on bank deposits are negative, hurting savers faced with annual inflation stubbornly higher than the one-year deposit rate of 3.5 percent.
THE JAWS OF LOAN SHARKS
Small business owners say they have been forced into the jaws of loan sharks by the tight credit policies of the past two years, sparking a national scandal.
Analysts expect the central bank to target 8-9 trillion yuan in new loans for 2012 -- up from 7.5 trillion yuan they estimate was targeted this year -- to keep credit conditions accommodative and indicating a willingness to loosen the grip on the loan-to-deposit ratio, now at 75 percent.
And tweaking the currency, which market participants believe China has been doing recently, is a diplomatic minefield given that many politicians around the world believe China keeps its currency weak to support exports.
Analysts expect yuan appreciation to the dollar to slow to around 3 percent in 2012 from this year's 4 percent rate, with much of the rise anticipated in the second half of next year if China opts for yuan stability to cope with the deepening debt crisis in its biggest export market -- Europe.
Peng Wensheng, chief economist at CICC in Beijing, expects the central bank to cut RRR to 18 percent by the end of 2012 to achieve a 14 percent annual growth of broad M2 money supply -- a level he says is compatible with 8-9 percent economic growth.
Peng reckons net foreign exchange purchases could halve to 1.5 trillion yuan in 2012 from an estimated 3 trillion yuan this year, suggesting the central bank has to pump out the balance to compensate for the fall in the monetary base.
"The authorities can inject cash into the banking system via reserve requirement cuts or open market operations," Peng said in a note to clients.
"(But) even if the authorities have a positive attitude towards expanding credit, there are doubts over how they will be able to achieve the goals," he said.

China blames 54 officials for bullet train crash

A long-awaited government report said design flaws and sloppy management caused a bullet train crash in July that killed 40 people and triggered a public outcry over the dangers of China's showcase transportation system.
A former railway minister was among 54 officials found responsible for the crash, a Cabinet statement said Wednesday. Several were ordered dismissed from Communist Party posts but there was no word of possible criminal penalties.
The crash report was highly anticipated. The disaster near the southern city of Wenzhou also injured 177 people and had triggered criticism over the high cost and dangers of the bullet train system, a prestige project that once enjoyed lofty status on a level with China's manned space program.

Regulations had required the report to be released by Nov. 20. When that date passed, the government offered little explanation, drawing renewed criticism by state media, which have been unusually skeptical about the handling of the accident and the investigation.
The Cabinet statement cited "serious design flaws and major safety risks" and what it said were a string of errors in equipment procurement and management. It also criticized the Railways Ministry's rescue efforts.
The report affirmed earlier government statements that a lightning strike caused one bullet train to stall and then a sensor failure and missteps by train controllers allowed a second train to keep moving on the same track and slam into it.
Those singled out for blame included former Minister of Railways Liu Zhijun, a bullet train booster who was detained in February amid a graft investigation. Also criticized was the general manager of the company that manufactured the signal, who died of a heart attack while talking to investigators in August.
The decision to assign blame to one figure who already has been jailed and another who is dead, along with mid-level managers who have been fired, suggests further political fallout will be limited.
Several officials including a former Communist Party secretary of the Shanghai Railway Bureau were ordered dismissed from their party posts, a penalty that is likely to end their career advancement. Others received official reprimands but there was no mention of possible criminal charges.
The bullet train, based on German and Japanese systems, is one facet of far-reaching government technology ambitions that call for developing a civilian jetliner, a Chinese mobile phone standard and advances in areas from nuclear power to genetics.
The bullet train system quickly grew to be the world's biggest but has suffered embarrassing setbacks. After the Wenzhou crash, 54 trains used on the Beijing-to-Shanghai line were recalled for repairs following delays caused by equipment failures.
Critics complain authorities have spent too much on high-speed lines while failing to invest enough in expanding cheaper, slower routes to serve China's poor majority.
Beijing is rapidly expanding China's 56,000-mile (91,000-kilometer) rail network, which is overloaded with passengers and cargo. But it has scaled back plans amid concern about whether the railway ministry can repay its mounting debts.
On Friday, the current railways minister, Sheng Guangzu, announced railway construction spending next year will be cut to about 400 billion yuan ($65 billion), down from this year's projected 469 billion yuan ($75 billion).
A failure to expand rail capacity could choke economic growth because exporters away from China's coast rely on rail to get goods to ports.
The rail ministry's reported debt is 2 trillion yuan ($300 billion). Analysts say its revenues are insufficient to repay that. That has prompted concern the ministry might need to be bailed out by Chinese taxpayers.

Futures off ahead of factory, home price data

Stock index futures were lower on Tuesday as investors found little reason to make big bets in what was expected to be a light-volume session following the previous week's gains.
The S&P 500 has risen for four straight sessions and turned positive for the year on Friday. Improving economic data helped boost equities last week. The gains were amplified by the light pre-holiday trading.
Investors looked ahead to November Midwest manufacturing data, scheduled for release at 8:30 a.m. EST as well as S&P/Case-Shiller home price data for October due at 9 a.m. EST and the December consumer confidence report at 10 a.m. EST.

Home prices are seen edging lower from the previous month, while the confidence reading is seen rising to 58.3 from 56.0.
The data comes after better-than-expected housing and jobless claims data last week that confirmed a slowly improving economy.
S&P 500 futures fell 3.1 points and below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures slipped 18 points, and Nasdaq 100 futures were off 2 points.
Markets were flat globally following the long Christmas weekend, with European stocks dipping 0.01 percent.
Bank of America Corp is lagging behind major U.S. competitors in complying with new capital rules, leading the bank to consider even more asset sales, sources said. Shares of the Dow component edged 0.7 percent lower to $5.56 in premarket trading.
Sears Holdings Corp plans to close 100-120 Kmart and Sears full-line stores and sees its adjusted fourth-quarter earnings before interest, taxes, depreciation and amortization falling by more than half from a year ago.
Equities extended their gains to close out a fourth straight winning session on Friday after the strong economic data. In addition, investors hope Congressional approval of a two-month extension of a payroll tax cut will help boost growth in 2012.

Sears to close more stores as holiday sales slump

Sears Holdings Corp sales kept falling at the peak of the holiday season, and the retailer said it will close up to 120 stores in its Kmart and namesake chains to focus on stronger stores, sending its shares down more than 19 percent.
Sears also said it tapped its credit facility, with $483 million of borrowings outstanding as of December 23, compared to zero a year earlier, and said it expected smaller fourth-quarter earnings this year.
The company's shares were down $8.80 at $37.05.
Sales at Sears Holdings, whose chairman and top shareholder is hedge fund manager Edward Lampert, have fallen every year since it was formed through the merger of Sears and Kmart in 2005.

So far this holiday season, the drop has continued.
Same-store sales at Kmart were down 4.4 percent in the current quarter through Christmas Day, and down 6 percent at Sears' U.S. stores. Companywide, they were down 5.2 percent, the company said on Tuesday.
Analysts said the store closings were a long time coming.
"It's about time," said independent analyst Brian Sozzi, noting that he expects additional store closings. "They've neglected this business for so long."
Sears said that typically, it would keep "marginally performing" stores open to give them time to improve, but "we no longer believe that to be the appropriate action in this environment."
The store closings follow its announcement last quarter it would shutter 10 stores. Kmart and Sears have a combined 2,177 U.S. big box locations and another 500 in Canada.
A list of which stores closing will be available at www.searsmedia.com.
Wall Street analysts have long faulted Sears for not investing enough to make its stores appealing. Sears is "effectively asking customers to pay for a poorer shopping environment" than other chains, Credit Suisse analyst Gary Balter said in a note to clients.
Balter was also surprised that Sears would borrow money during the holidays, which are typically a peak cash flow period.
Sears blamed poor consumer electronics sales in a tough economic environment "especially for big-ticket items" for more than half of the decline in its namesake chain's domestic same-store sales.
It even reported lower layaway sales, which are offered at Kmart and designed to allow lower income shoppers to pay for items in installments. The main culprit there is Wal-Mart Stores Inc which this holiday season brought back its layaway program after five years, Sozzi said.
Sears Holdings said the lower sales and margin pressure would lead to adjusted fourth-quarter earnings before interest, debt and amortization of less than half of the year-ago quarter's $933 million figure.
Last month, Sears reported a much wider than expected quarterly loss as higher markdowns and pricing pressures in appliances squeezed margins.
The retailer, home to brands including Craftsman tools and Kenmore appliances, expects to earn $140 million to $170 million by selling of inventory in affected stores and selling or subleasing store space.
Sears also expects to record a non-cash charge of $1.6 billion to $1.8 billion in the fourth quarter related to a valuation allowance on certain deferred tax assets.

U.S. stores hope "Mega Monday" led to brisk sales

Shoppers found a mixed bag of bargains and so-so deals on Monday, as a day off for many Americans lured some out for what was likely to be the third-busiest shopping day of the holiday season.
Chains were also hoping that shoppers coming in to redeem the millions of gift cards given as presents might be willing to spend a bit more cash of their own.
Many retailers were still relying on bargains to entice shoppers on the day after Christmas.
In 2010, chains rang up about $62 billion in sales during the final week of the year, about 12 percent of the total for the holiday season, despite some major snowstorms.

"This year we'll blow through that, with about $72 billion in sales for this retail 'second season,'" said Craig Johnson, president of Customer Growth Partners.
Retailers could sell as much as $29 billion worth of merchandise on Monday alone, eclipsing the $27 billion in sales on Black Friday, Johnson said on Monday morning, as he saw parking lots at suburban malls and outlet malls filling up.
Some areas such as Chicago's Michigan Avenue had smaller morning crowds than on the busy day after Thanksgiving.
Internet offers were popular, especially on Christmas, when most stores were closed. Target Corp, for example, offered $10 off online orders of $50 or more on Christmas.
Online sales on Christmas Day rose 16.4 percent from 2010, and were up 10 percent as of 3 p.m. EST on December 26, according to IBM.
The National Retail Federation expects holiday season sales to rise 3.8 percent to a record $469.1 billion, slower than last year's growth but stronger than its preseason forecast.
The potential shopping boom comes as a weak labor market that has dragged on the economy shows signs of a turn. The number of Americans filing new claims for jobless benefits hit a 3-1/2-year low in the week shortly before Christmas, and consumer sentiment scaled a six-month high in December, with more Americans optimistic about the economic outlook.
Still, U.S. consumer spending, which accounts for about two-third of U.S. economic activity, rose less than expected in November.
This year marked the first time in six years that the day after Christmas fell on a Monday. Some dubbed it "Mega Monday" as the day takes on more prominence for shoppers, especially those who have the day off.
Shoppers who made their way to Saks Fifth Avenue in Boston's Prudential Center mall said the 60 percent and 70 percent discounts were well worth fighting the crowds.
"It was a stampede at 8 a.m.," said Sarah Klein, 46, a teacher from Cambridge, who said people were grabbing fistfuls of discount handbags when the doors opened.
THIRD-BUSIEST SHOPPING DAY
Four in 10 Americans plan on hitting stores over the next few days, while 46 percent have no plans to shop, according to a poll from Consumer Reports. Of those who said they planned to shop, 82 percent said the biggest draw was post-holiday sales, 47 percent wanted to redeem gift cards and 31 percent expected to return gifts.
This year, December 26 is expected to be the third-busiest sales day, trailing Black Friday and Friday, December 23, according to ShopperTrak, which measures retail and mall foot traffic.
As procrastinators finished shopping in the days just before Christmas, December 23 overtook December 17 as the second-busiest day so far, said Bill Martin, founder of ShopperTrak.
ShopperTrak predicted that up to 60 percent more shoppers will visit stores on December 26 than on the same day last year.
Among the deals offered on Monday, JC Penney Co Inc had coupons for $10 off purchases of $25 or more, while Gap Inc's Old Navy offered those spending $20 in its stores a coupon worth $10 toward a future purchase.
Still, some shoppers were not impressed with the deals.
Catherine Arora, 33, who was visiting Boston from Australia, said sales back home are much bigger on the December 26 Boxing Day holiday.
"So far, the sales are a bit underwhelming," she said while out hunting for clothes and shoes.
Retailers may have a glut of winter clothing due to warmer-than-usual weather, but they made smart bets on other items, meaning they should not have to resort to lots of steep discounts to clean out inventory, experts said.
Ken Ucho, a retired principal who now lives in La Porte, Indiana, said he came back to Chicago to shop and had few crowds to avoid early in the morning.
After visiting a number of stores, including Macy's and Bloomingdale's, Ucho, 69, said he saw crowds only at the upscale Neiman Marcus.
GIFT CARDS
Another Consumer Reports poll found that 113 million Americans received gift cards last holiday season, and that 62 percent of adults planned to give them as gifts this year.
Retailers hope that people redeeming gift cards will buy merchandise at full price and spend more than the value of the cards they are using.
"The best and the smartest retailers do put together promotions and merchandising in such a way to convince the consumer to spend more than what their gift card was," said John Squire of IBM's Smarter Commerce initiative.
The Hodgson family, from Cleveland, was in Boston for the holiday and decided to go shopping together on Monday rather than exchanging gifts. Siblings Matt, 29, Chris, 26, and Catie, 21, said they had some gift cards to use from relatives and expected their spending to top the cards' values.
Dawn Babbi, 26, said retailers had to have strong offers to get her to shop this year, especially as she does more of her shopping online, where she has found good discounts.
"I came out for discounted Christmas wrap for next year," Babbi said as she shopped at Target in Plattsburgh, New York, on Monday. "Why pay full price when you can get it half price?"

E&Y audit panel says no violations in Olympus handover

A panel reviewing the auditing of Olympus Corp after its $1.7 billion accounting scandal said it had so far not found any problems with the work of Ernst & Young's Japanese arm and questioned the accuracy of a separate investigation critical of auditors.
But the panel, set up by Ernst & Young ShinNihon LLC earlier this month, acknowledged that its powers of investigation were limited. The hurdles include an inability to question prior auditor, KMPG AZSA LLC, which does not want to participate in the probe.
"We face certain limitations," Nobuo Gohara, a lawyer and leading member of the panel, told a briefing to give an update on an investigation it is aiming to complete by February. "We are not at the stage where everything is clear."

Ernst & Young formed the panel to respond to criticism of auditors in a separate investigation by an Olympus-appointed panel this month that outlined how a handful of Olympus executives orchestrated the decades-long accounting scam.
The Olympus-appointed panel highlighted two issues in the auditing process. It questioned whether the handoff from KPMG to Ernst & Young in 2009 was thorough and whether it was appropriate for Olympus to book as goodwill preferred shares used to pay a massive M&A advisory fee now known to be central to the scandal.
The Ernst & Young-appointed panel said the handover was handled in accordance with accounting regulations that stipulate what questions must be asked and answered about why the switch is taking place. But it has not determined if Ernst & Young did enough to follow up on red flags.
"We have found no problems with the handover in terms of the guidelines," said Toshifumi Takada, an auditing professor at Tohoku University and panel member. "But we need to make further checks to see if more should have been done."
Gohara raised questions about the thoroughness and accuracy of the Olympus-appointed panel's report. Among other things he said Ernst & Young was questioned only twice for two-hour sessions each and he could not verify that a meeting between the two auditors detailed in the report took place.
"I have doubts about the accuracy of certain parts of the report," said Gohara, who grabbed headlines earlier this year when he led an investigation into a scandal at Kyushu Electric and publicly challenged the utility for revising his report.
Ernst & Young and KPMG both face possible sanctions by the country's accounting industry body and financial regulator, which have launched probes into the matter.
In a statement, KPMG AZSA said it handled the handover with Ernst & Young in accordance with regulations and that it was cooperating with an investigation by the Japanese Institute of Certified Public Accountants announced by the industry body last month.
A severe penalty would deal a heavy blow to the industry, which is still reeling from a series of scandals that led to a two-month suspension of ChuoAoyama Pricewaterhouse Coopers in 2006 and the disbanding of its successor firm in 2007.

Japan, India shares gain in holiday-thin Asia, U.S. hopes help

Japanese and Indian stocks outperformed the rest of Asia in thin trade Monday, with sentiment partly lifted by signs of U.S. economic recovery, although trading was subdued with many markets closed for Christmas holidays.

Tokyo's Nikkei stock average <.N225> ended up 1 percent, above its 25-day moving average of 8,459, while India's main 30-share BSE index <.BSESN> rose 1.14 percent, as investors sought holiday-season bargains.

But MSCI's broadest index of Asia Pacific shares outside Japan <.MIAPJ0000PUS> slipped from a two-week high touched earlier in the day to trade down 0.1 percent.

U.S., European and some Asian markets including Hong Kong and Singapore were closed Monday.

Wall Street stocks rose Friday, with the broad Standard & Poor's 500 Index <.SPX> breaking through its 200-day moving average after a four-day rally lifted stocks to bring the index up 0.6 percent for the year at last week's close.

The Dow Jones industrial average <.DJI> rose to its highest in five months Friday.

"The Nikkei is moving with New York. The gains in the U.S. and Europe gave some sense of relief to markets," said Hajime Nakajima, a wholesale trader at Cosmo Securities in Osaka, Japan.

In a sign the markets may be stabilizing for the time being, the CBOE Volatility index VIX <.VIX> fell to 20.73 on Friday, near a five-month low, reflecting receding investor desire for protection in stock index options against future losses.

The VIX -- a measure of expected volatility in the S&P 500 over the next 30 days -- fell to its lowest since the global financial crisis of October 2008 at 14.3 earlier this year, before picking up to a year high of 48 in August. It has been slipping since hitting a high above 30 earlier this month.
CONCERN ON CHINA EARNINGS
The Shanghai Composite Index <.SSEC> fell 0.5 percent on concerns over corporate earnings outlook, pushing below the psychologically important 2,200 level in light trading.
The Korea Composite Stock Price Index <.KS11> slid 0.6 percent on doubts over the euro zone debt crisis getting resolved.

"Program selling was the main drag on the index today, and despite the optimistic U.S. data, foreign investors aren't ready to re-enter the market in force as long as the (European Central Bank) isn't taking more concrete measures," said Lee Kyung-soo, a market analyst at Shinyoung Securities.

Investors will be looking for clues over the strength of the U.S. economy from data due this week, including the S&P Case-Shiller house price index for October and consumer confidence for December.
U.S. consumer spending growth was tepid and a gauge of business investment fell for a second month in November, data showed Friday, but recent labor and manufacturing figures implied a more-lasting and fundamental strengthening of the recovery.
The U.S. Congress Friday approved a two-month extension of a payroll tax cut that will preserve income for most Americans, supporting their purchases of goods and services and helping sentiment.

The euro was up 0.13 percent to $1.3060, well above its 11-month trough of $1.2945 hit earlier this month.

The latest Commodity Futures Trading Commission data showed investors reduced their short euro positions slightly, potentially giving support to the single currency.

"Given a lack of factors to trade and low liquidity, activity is expected to be lackluster this week, but sluggish results of French and Italian government debt sales scheduled this week could pressure the euro amid an absence of progress in bolstering euro zone safety net," Barclays Capital said in a research note.

The 10-year Italian government debt yield stayed near 7 percent, above which many say is unsustainable for managing public finances and the economy, while 10-year Spanish government bond yield also stood at an elevated 5.40 percent.

Wariness about European banks' health and risks of another global credit crunch made banks reluctant to borrow to each other, pushing the London interbank offered rate for three-month dollars up further Friday to 0.57575 percent, its highest since early July 2009.

U.S. stores hope for "Mega Monday" of brisk sales

Shoppers found a mixed bag of bargains and so-so deals on Monday, as a day off for many Americans and warm, dry weather lured some out for what was likely to be the third busiest shopping day of the holiday season.
Chains were also hoping that shoppers coming in to redeem the millions of gift cards given as presents might be willing to spend a bit more cash of their own.
Many chains were still relying on the lure of bargains to bring in shoppers on the day after Christmas. Office Depot Inc advertised its "Ultimate After Christmas Sale," with stores opening at 8 a.m., while Carter's Inc, the children's apparel retailer, promoted discounts of up to 70 percent.

The potential shopping boom comes as a weak labor market that has dragged on the economy shows signs of a turn. The number of Americans filing new claims for jobless benefits hit a 3-1/2-year low in the week shortly before Christmas. And consumer sentiment scaled a six-month high in December with more Americans optimistic about the economic outlook.
Still, U.S. consumer spending, which accounts for about two-third of U.S. economic activity, rose less than expected in November.
This year marked the first time in six years that the day after Christmas fell on a Monday. Some dubbed it "Mega Monday" as the day takes on more prominence for shoppers, especially those who have the day off.
Shoppers who made their way to Saks Fifth Avenue in Boston's Prudential Center mall said the 60 percent and 70 percent discounts were well worth fighting the crowds.
"It was a stampede at 8 a.m.," said Sarah Klein, 46, a teacher from Cambridge, who said people were grabbing fistfuls of discount handbags when the doors opened.
This year, December 26 is expected to be the third busiest sales day, trailing Black Friday, the day after Thanksgiving, and Friday, December 23, according to ShopperTrak, which measures retail and mall foot traffic.
As procrastinators finished up shopping in the days just before Christmas, December 23 overtook December 17 as the second busiest day so far, said Bill Martin, founder of ShopperTrak.
ShopperTrak predicted that up to 60 percent more shoppers will visit stores on December 26 than on the same day last year.
Still, some shoppers were not impressed with the deals.
Catherine Arora, 33, who was visiting Boston from Australia, said sales back home are much bigger on the December 26 Boxing Day holiday.
"So far, the sales are a bit underwhelming," she said while out hunting for clothes and shoes.
Retailers may have a glut of winter clothing due to warmer-than-usual weather, but they made smart bets on other items, meaning they should not have to resort to lots of steep discounts to clean out inventory, experts said.
Steven DiLibero Jr, a 33-year-old attorney from Barrington, Rhode Island, said he was disappointed with some of the sales.
"I was hoping for a little bit more on the sales," he said. "I'm getting like 25 percent to 30 percent on things -- a shirt and tie. I've probably saved about $100," he said.
In Chicago, major shopping areas were not too crowded early in the day. Ken Ucho, a retired principal who now lives in La Porte, Indiana, came back to Chicago to shop early on Monday and had spent about $300 by 11 a.m.
After visiting a number of stores, including Macy's and Bloomingdale's, Ucho, 69, said he only saw crowds at the upscale Neiman Marcus.
Retailers could sell as much as $29 billion worth of merchandise on Monday, according to Craig Johnson, president of Customer Growth Partners, who had predicted strong holiday sales before the season began.
Sales at the $29 billion level would even outpace the $27 billion in sales Johnson saw on Black Friday.
Chains had also used their Web sites to entice shoppers on Christmas Day. Target Corp, for example, offered $10 off online orders of $50 or more on Christmas.
Four in 10 Americans plan on hitting stores over the next few days, while 46 percent have no plans to shop, according to a poll from Consumer Reports. Of those who said they planned to shop, 82 percent said the biggest draw was post-holiday sales, 47 percent wanted to redeem gift cards, and 31 expected to return gifts.
Retailers hope that people coming in to redeem gift cards will buy merchandise at full price and spend more than the value of the cards they are using.
Another Consumer Reports poll found that 113 million Americans received gift cards last holiday season, and that 62 percent of adults planned to give them as gifts this year.
The Hodgson family, from Cleveland, was in Boston for the holiday and decided to go shopping together on Monday rather than exchanging gifts. Siblings Matt, 29, Chris, 26, and Catie, 21, said they had some gift cards to use from relatives, and expected their spending to top the cards' values.

Obama campaign seeks to raise $60 mln in 4th quarter

President Barack Obama's campaign set a goal of raising $60 million in the fourth quarter of the year to benefit the Democratic incumbent's re-election and the Democratic National Committee, a campaign official said on Saturday.
Obama's campaign, together with the Democratic National Committee, had raised roughly $155 million through the end of September.
If it reaches its goal for the fourth quarter, the campaign will surpass $200 million in fundraising for 2011.

Obama is not expected to attend fundraising events between now and the end of the year, the campaign official said. He headlined about 15 campaign fundraising events in the fourth quarter.
"Enthusiasm for the White House's policies has been steadily increasing and it will keep increasing," said Steven Cohen, a major contributor and campaign fundraiser based in Chicago.
Cohen pointed to Obama's push for an extension of a payroll tax cut while House of Representatives Republicans stonewalled, describing this as a policy that has helped middle-class voters contrast the president with his Republican challengers.
"Among the people who I have talked to . they are seeing a real demonstration of the president's commitment to stand his ground," Cohen said.
Overall, the campaign seeks to raise more than $750 million to boost Obama's bid for a second term in the White House.
The campaign on December 20 launched a joint fundraising committee to benefit the Democratic Party in 11 all-important "swing states," - such as Florida, Colorado, Michigan, Pennsylvania - where voting is expected to be close next year, and costs are expected to be high.
The campaign brought in $70 million in the third quarter, topping its $55 million goal. But fundraisers said they were stifled by the protracted congressional debt talks this summer, which led Obama to cancel top-dollar fundraisers around the country.
The campaign, which formally started in April, raised $86 million in the second quarter.
The 2012 election is due to be the priciest ever with Obama expected to raise more than his record $750 million from 2008. And newly relaxed fundraising laws will add hundreds of millions of dollars from "super political action committees," officially deemed separate from campaigns, even when devoted to electing particular candidates.

Santa rally may face test next week

Get ready. The last trading week of the year will be a test for stocks to prove whether they have the strength to carry a rally into next year.
The broad S&P 500 index broke through its 200-day moving average on Friday after turning positive for the year as a four-day rally lifted stocks following a spell of better-than-expected economic data. At Friday's close, the S&P 500 was up 0.6 percent for the year.
But despite the recent economic data that suggest the U.S. economy is on the right track to recovery, Europe's sovereign debt crisis is troubling investors and weighing on the market.

Many market participants are reluctant to believe in a "Santa Claus rally" this year, which refers to stocks' seasonal tendency to gain in the final five trading days of the year and first two trading days of the new year.
Warnings from major credit rating agencies on a potential downgrade of several European nations have kept investors on edge. After Standard & Poor's surprised financial markets back in August with a downgrade of the United States' triple-A credit rating on a Friday evening, investors worry a similar move could come at any time - even between Christmas and New Year's.
But the absence of European sovereign bond auctions for the next two weeks could lend support to stocks.
"The fact that there won't be a (European) bond auction until the second week of January, that takes away some spotlight from Europe, at least for a little while," TD Ameritrade chief derivatives strategist J.J. Kinahan said.
"Unless we get earth-shattering news, the S&P could go up to (the) 1,300 levels," he said.
The S&P 500 closed on Friday at 1,265.33.
The correlation between U.S. stocks and European sovereign bond yields has been high, especially the link with Spanish, Italian and German bonds. A poor bond auction in any one of these countries could trigger an instant selloff in the U.S. stock market.
SANTA CLAUS VS BEAR CLAWS
What happens next week is important as it sets a tone for the coming year.
"If Santa should fail to call, bears may come to Broad & Wall," so goes the Wall Street adage, according to the Stock Trader's Almanac.
Ari Wald, a technical strategist at Brown Brothers Harriman, said the key level on the S&P 500 to watch is 1,260, which is a resistance from the index's downward sloping 200-day moving average and the downtrend connecting its October and December peaks.
"A breakout above this supply would argue for continued seasonal strength through the first quarter of 2012," he said.
He also noted that 1,200 is support from the index's downward sloping 100-day moving average and the uptrend connecting its October & November lows.
"A breach of this demand could stir additional technical selling to 1,130-1,150 intermediate-term support," Wald said.
With many investors absent until the start of 2012, trading volume is expected to be light, creating more volatility.
Next week's data includes the S&P 500 Case-Shiller House Price Index and consumer confidence data on Tuesday.
The Chicago Purchasing Managers Index and pending home sales data are due on Thursday. After a strong gain in November, the Chicago index is seen giving back a modest amount in December.