Finance Blog number 1

In a stunning retreat, Rupert Murdoch’s News Corp. media empire dropped its bid Wednesday to take over full control of British Sky Broadcasting amid a political and legal firestorm over phone hacking at one of its British newspapers.

Murdoch was forced to step back from the biggest battle of his career over a lucrative prize, accepting that he could not win government acceptance of the takeover as Britain’s major political parties had united against it.

“It has become clear that it is too difficult to progress in this climate,” News Corp. deputy chairman and president Chase Carey said in a brief statement to the London Stock Exchange.

Shares in BSkyB dived 4 percent lower after the announcement.

Hours earlier, Prime Minister David Cameron announced he was putting a senior judge in charge of an inquiry into phone hacking and alleged bribery by a tabloid newspaper, and vowed to investigate an allegation that a U.K. reporter may have sought the phone numbers of 9/11 victims in a quest for sensational scoops.

“There is a firestorm, if you like, that is engulfing parts of the media, parts of the police, and indeed our political system’s ability to respond,” Cameron said in the House of Commons. He said the focus must now be on the victims, and make sure that the guilty are prosecuted.

The hacking and police bribery scandal also claimed another victim. News International, the British unit of News Corp., said its legal director, Tom Crone, had left the company. Crone had led an internal inquiry that concluded only two people at the News of the World tabloid had been involved in phone hacking _ a stance that collapsed as numerous revelations tumbled out this year.

“This is a victory for people up and down this country who have been appalled by the revelations of the phone hacking scandal and the failure of News International to take responsibility,” said Labour Party leader Ed Miliband, who had mobilized an all-party agreement to vote on a motion urging Murdoch to back off.

“People thought it was beyond belief that Mr. Murdoch could continue with his takeover after these revelations,” Miliband said.

Outrage has grown and Murdoch’s News Corp.’s share price has fallen since a report last week that his News of the World tabloid hacked into the phone of teenage murder victim Milly Dowler in 2002 and may have impeded a police investigation into her disappearance. That was followed by claims of intrusion into private records by Murdoch’s other U.K. papers, The Sun and The Sunday Times.

Murdoch shut down the 168-year-old News of the World on Sunday and came to London to direct the company’s efforts to get on top of its problems.

Dowler’s family was meeting with Cameron at 10 Downing Street later Wednesday.

Police have arrested eight people so far in their investigation, including Cameron’s former communications director Andy Coulson, a former editor of News of the World. No one has been charged.

Cameron appointed Lord Justice Brian Leveson to lead the inquiry, which will be able to compel witnesses _ including government figures _ to give evidence under oath.

Leveson will first investigate the culture, practices and ethics of the press, its relationship with police and the failure of the current system of self-regulation. That inquiry is expected to last up to one year. Only then will the inquiry focus shift to what went wrong at the News of the World and other papers, Cameron said.

The suggestion that 9/11 victims may have been targeted surfaced Monday in the Mirror, a British competitor of The Sun. It quoted an anonymous source as saying an unidentified American investigator had rejected approaches from unidentified journalists who showed a particular interest in British victims of the terror attacks. It cited no evidence that any phone had actually been hacked.

In Washington, Sen. Jay Rockefeller, a Democrat from West Virginia, urged an investigation into whether Murdoch’s News Corp. had violated U.S. law because of the British paper’s activities.

If there was any hacking of phones belonging to 9/11 victims or other Americans, “the consequences will be severe,” said Rockefeller, chairman of the Senate Committee on Commerce, Science and Transportation.

Murdoch had hoped to gain control of the 61 percent of BSkyB shares that his News Corp. doesn’t yet own, but the bid was delayed for several months even before he withdrew while the British government’s Competition Commission reviewed monopoly concerns.

A report Wednesday in The Wall Street Journal, which is part of News Corp., said Murdoch has met with advisers over recent weeks to discuss possible options including the sale of the remaining British newspapers _ The Sun, The Times and The Sunday Times.

The Journal, citing unidentified people familiar with the situation, said there didn’t appear to be any buyers given the poor economics of the newspaper division.

Still, a defiant mood was evident at one News International paper, The Sun tabloid, which slapped the headline “Brown Wrong” across its front page in response to claims by former Prime Minister Gordon Brown that the paper had obtained confidential medical records of his younger son.

Brown accused Murdoch’s papers, including The Sun and The Sunday Times, of obtaining his confidential bank accounts, tax records and even health information about his son, Fraser, who suffers from cystic fibrosis, using fraudulent, criminal means. But, the newspaper insisted it learned of the boy’s ailment from the father of another child with the same condition, and that it contacted the Browns, who consented to the story.

“We are not aware of Mr. Brown, nor any of his colleagues to whom we spoke, making any complaint about it at the time,” The Sun said.

Murdoch’s News International responded to his accusations by asking Brown for any information that would help to investigate them.

London Mayor Boris Johnson said Wednesday that he had been informed that his telephone had been hacked, but he decided not to take legal action.

“Quite frankly, why on earth should I go through some court case in which it would have inevitably involved going over all the pathetic so-called revelations that the News of the World had dug up?” Johnson said.

“Why should I, when the police had made it clear to me when they had abundant evidence?” he added.

Police in the U.K. are pursuing two investigations of News International, one on phone hacking and the other on allegations that the News of the World bribed police officers for information.

Hugh Orde, president of the Association of Chief Police Officers, urged News International to come clean about any such payments.

“Let’s not play around with legal games here: If they have names, dates, times, places, payments to officers, we would like to see them so that we can lock these officers up and throw away the key,” Orde told the British Broadcasting radio.

Police officials have indicated the bribery investigations involve about half a dozen officers.

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New Zealand’s dollar reached its highest level since exchange-rate controls ended in 1985 after a report showed the nation’s trade surplus widened by almost twice economists’ estimates to a record in April.

The so-called kiwi has risen 8.8 percent against the greenback since Feb. 25, the second-best performer among 16 major counterparts, as Asian demand drove up prices for New Zealand’s milk, lumber and meat exports. Australia’s dollar touched a three-month low against its New Zealand counterpart amid signs the bigger nation’s economy is cooling.

“Resilience of the kiwi has been very impressive,” said Mitul Kotecha, Hong Kong-based head of global foreign-exchange strategy at Credit Agricole CIB, a unit of France’s second- biggest bank. “The numbers today from New Zealand are obviously helping out as the trade data was far stronger than the market had expected.”

The kiwi rose to as high as 82.19 U.S. cents before trading at 81.78 cents as of 3:41 p.m. in Sydney. It closed at 81.92 U.S. cents in New York on May 27. The previous record of 82.14 U.S. cents was established in February 2008.

Australia’s dollar was at $1.0684 from $1.0706 on May 27 in New York, after earlier rising to $1.0737, the highest since May 11. The currency was at NZ$1.3066 from NZ$1.3058 after touching NZ$1.3019, the weakest level since Feb. 2. The Aussie fell to 86.30 yen from 86.49 yen.

Commodities Driving Surplus

The New Zealand dollar’s gain makes its exports more expensive, hampering the nation’s economic recovery from two earthquakes in the South Island city of Christchurch that killed more than 180 people and caused an estimated NZ$15 billion in reconstruction costs. Prime Minister John Key told reporters in Wellington today that the kiwi was trading at “unsustainable levels” for non-commodity exporters.

The exchange rate was “more bearable” for the commodity sector because of high export prices, he said.

Exports outpaced imports by NZ$1.11 billion ($908 million) from a revised NZ$578 million surplus in March, Statistics New Zealand said today in Wellington. The median estimate in a Bloomberg News survey of economists was for a NZ$600 million surplus.

Prices of New Zealand’s commodity exports gained for an eighth month to a record in April, according to an index calculated by ANZ National Bank Ltd. Exports to China, New Zealand’s second-biggest export market after Australia, surged 42 percent to NZ$5.39 billion in the year ended March 31, government figures showed.

‘Rising Incomes’

“Rising incomes in the Asian region will generate a long- run demand for agricultural commodities, with the New Zealand economy better placed than most” as a supplier, Richard Grace, chief currency strategist and head of international economics at Commonwealth Bank of Australia, wrote in a note to clients May 27. “These developments will be reflected in a higher New Zealand dollar.”

The Aussie halted its two-day gain against the greenback as the statistics bureau in Sydney said that gross operating profits at companies declined 2 percent in the first quarter from the previous three months, when they dropped a revised 1.7 percent.

Weaker GDP

Australia’s Treasurer Wayne Swan said before a government report on gross domestic product this week that natural disasters in the nation probably cut more than 1 percentage point from economic growth in the first quarter.

Swan’s latest estimate was higher than one he made in April that put damage to GDP in the first quarter at 0.75 percentage point. The median estimate in a Bloomberg News survey of economists is for a 0.3 percent contraction from the final three months of 2010.

Gains in New Zealand’s dollar were limited as its 10-day relative strength index versus the U.S. dollar rose to 70.23, above the level of 70 that suggests an asset’s price has risen too fast and is poised to reverse course.

“The kiwi’s recent rise was rapid,” said Takuya Kawabata, a researcher in Tokyo at Gaitame.com Research Institute Ltd., a unit of Japan’s largest currency margin company. “It’s not surprising to see some correction.”

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Inflation in Germany, Europe’s largest economy, unexpectedly eased in May after oil prices dropped from a 2 1/2-year high.

The harmonized inflation rate fell to 2.4 percent from 2.7 percent in April, the Federal Statistics Office in Wiesbaden said today. Economists had expected inflation to hold at the highest level since September 2008, the median of 17 forecasts in a Bloomberg News survey showed. On the month, consumer prices declined 0.2 percent.

Oil prices have dropped 11 percent this month after breaching $114 a barrel in April, leaving households with more money to spend. European Central Bank officials have signaled they are ready to raise borrowing costs further to curb price pressures after increasing the benchmark interest rate to 1.25 percent last month, even as peripheral nations such as Greece, Portugal and Ireland remain mired in a sovereign-debt crisis.

“Today’s German inflation numbers are just a temporary breather,” said Carsten Brzeski, an economist at ING Group in Brussels. “Obviously, with these inflation numbers, the ECB won’t hastily rush to a June hike. The German data is also not soft enough to put the ECB off from another hike in July.”

On a non-harmonized basis, inflation slowed to 2.3 percent in May from 2.4 percent and prices were unchanged on the month, the statistics office said.

Price Mandate

VCI, the main association of German chemical companies, on May 17 raised its forecast for production, sales and prices this year in the industry, on increasing global demand personal loan for poor credit.

“We have to avoid commodity-price increases becoming entrenched in longer-term inflation expectations, which could have second-round effects on wages and prices,” ECB President Jean-Claude Trichet said yesterday. “We are carefully monitoring the situation and we stand ready to do whatever is necessary to fulfill our mandate.”

Euro-area inflation probably remained at 2.8 percent this month, according to the median of 27 forecasts in a Bloomberg survey. The European Union’s statistics office in Luxembourg will publish the data on May 31. Economists in a separate survey forecast the ECB will raise its main lending rate to 1.75 percent by the end of the year.

The German economy grew 1.5 percent in the first quarter as companies boosted spending to meet increased export demand and construction rebounded from a slump in the previous three months. The government predicts growth of 2.6 percent this year after a record 3.6 percent expansion in 2010.

At the same time, countries from Greece to Portugal are struggling to grow amid a debt crisis that’s shaking the foundations of the single currency. The euro area will grow 1.6 percent this year after expanding 1.8 percent in 2010, the European Commission forecast this month.

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The head of a committee tasked with rooting out Iraqis with ties to Saddam Hussein’s deposed regime and who was once arrested for alleged ties to Shiite militias was shot to death late Thursday in Baghdad, officials said.

Ali al-Lami was a divisive figure in Iraqi politics who had close ties to neighboring Iran’s Shiite Muslim government and was known for the vigor with which he tried to root out Saddam-era loyalists from all levels of Iraqi government. He also ran afoul of the U.S. after he was implicated in a bombing that killed Americans.

His role last year in trying to oust hundreds of Sunni candidates from running in the parliamentary election due to alleged ties to the Saddam regime fueled criticism that Iraqi Shiites, backed by Iran, were trying to sideline Sunnis from power and threatened to re-ignite sectarian tensions.

Now he has become the latest victim of an assassination campaign across Baghdad and Iraq that has resulted in the deaths of tens of Iraqi political and governmental figures.

The top military spokesman for Baghdad, Maj. Gen. Qassim al-Moussawi, said gunmen opened fire and killed al-Lami as he was driving in his car in eastern Baghdad. His driver also died in the shooting, said two police officers.

Al-Lami racked up a long list of political enemies during his years on the Iraqi political scene. He was long suspected of having ties to Iran and Lebanon’s Hezbollah. He headed the Accountability and Justice Committee responsible tasked with vetting people trying to get government jobs or take political office for ties to Saddam Hussein’s Baath Party, which ruled Iraq for decades.

During last year’s parliamentary election, the committee tried to bar hundreds of candidates from taking part. Most were from the Sunni-backed Iraqiya bloc, which went on to win the most seats in the election.

The top American military commander in Iraq at the time, Gen. Ray Odierno, said al-Lami and Ahmed Chalabi, also a committee member, were influenced by Iran and had attended meetings of the Shiite regime there.

One of the committee’s targets was Saleh al-Mutlaq, who later became the deputy prime minister as part of lengthy negotiations to come up with a new government headed by Shiite Prime Minister Nouri al-Maliki.

Speaking from Jordan, al-Mutlaq said he was shocked and saddened by al-Lami’s death.

“He is a human being, and he’s an Iraqi. I know him personally,” al-Mutlaq said, adding, “He was directed by the Iranian regime. He took orders.”

The deputy prime minister said it was too early to tell who was responsible for his death, but said: “Thousands of people are living in very bad conditions because they were hurt by this organization,” referring to the Accountability and Justice Committee.

For supporters and close friends of al-Lami, it was immediately clear who killed him. A spokesman for Chalabi said al-Lami was likely killed by Baath Party loyalists angry at his campaign against them.

“My first suspect would be the Baath party,” said Entifadh Qanbar. “I’m very sure that the Baathists hold a very huge grudge against him. … He got so many threats.”

Al-Lami was arrested by U.S. and Iraqi forces in 2008 for suspected ties to Iranian-backed Shiite militias, and was accused by U.S. officials at the time of being involved in a bombing that killed eight people, including two American soldiers and two State Department employees.

His arrest reinforced suspicions about Tehran’s influence within the Shiite-led Iraqi government.

Al-Lami’s death came on the same day that followers of anti-American cleric Muqtada al-Sadr staged a huge rally designed as a dramatic show of strength against any move to allow American forces to stay in Iraq past their Dec. 31 deadline.

Under an agreement between Washington and Baghdad, the 46,000 troops still in Iraq must leave by Dec. 31. Iraq’s widespread instability and still struggling security forces have led U.S. and Iraqi leaders to reconsider the deadline for the sake of the country’s security.

U.S. officials have been pushing Iraq to decide whether it wants some American forces to remain, and al-Maliki has said he’ll discuss it with the country’s main political blocs.

But the throngs on the street in Sadr City, a slum in eastern Baghdad that is an al-Sadr stronghold, was a stark warning to al-Maliki about what he risks if U.S. forces stay longer.

Tens of thousands of Shiite militiamen belonging to al-Sadr’s Mahdi Army militia and other supporters marched through the streets. Although unarmed, their matching T-shirts and caps and marching in unison evoked the spirit of a military parade rather than a political rally.

“I am asking for the withdrawal of the occupation. I am ready to fight from this moment. I am ready to sacrifice. I am ready for death,” said one marcher, 42-year-old Hussein Abu Lika.

The militia members waved Iraqi flags and shouted, “No, no, America!”

U.S., Israeli and British flags were painted on the pavement to be stomped on by the marching protesters, and Iraqi military helicopters buzzed overhead while soldiers stood guard.

Al-Sadr is one of the few, maybe only, Iraqi political leaders able to raise such a large crowd. Many of them are impoverished Shiites from southern Iraq and Baghdad who are drawn to his anti-American, nationalist rhetoric and his family’s deep roots in Iraqi political and religious life.

But to many Iraqis, al-Sadr and his Mahdi Army are little more than thugs blamed for some of the worst of the sectarian attacks during the insurgency.

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European Central Bank President Jean-Claude Trichet declined to comment on press reports saying Ireland’s Anglo Irish Bank Corp. and Irish Nationwide Building Society caused a surge in overnight borrowing costs.

“First of all, I will not discuss the process at all,” Trichet said at a briefing in Paris today after a Group of 20 meeting, when asked about the two Irish lenders. “On the particular case you were mentioning, I have nothing to say. I will see whether with the central bank of Ireland, with the suggestion to mention banks, will have anything to say payday loans.”

The Irish Times reported today that the Dublin-based banks increased emergency borrowing at the ECB as the country’s government prepares to sell assets and deposits of the lenders. The newspaper didn’t say where it obtained the information.

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Three weeks after Jean-Claude Trichet jolted financial markets with a threat to raise interest rates, the European Central Bank President has even more reason to talk tough on inflation.

The euro-area rate rose to 2.4 percent in January, the highest in more than two years, workers are demanding bigger pay increases in Germany, where import-price inflation is running at the fastest pace in 29 years, and political tensions in Egypt are stoking oil prices. The risk for Trichet is that his inflation-fighting rhetoric convinces investors the ECB will raise borrowing costs before Europe overcomes its debt crisis.

“It is a balancing act,” said Jens Sondergaard, senior European economist at Nomura International Plc in London. “He’s trying to speak to the unions, but not spook the markets. There’s a careful fine-tuning of expectations going on.”

The euro surged and bonds fell after Trichet on Jan. 13 pledged to do what’s necessary to keep a rein on inflation, signaling a shift in focus for the ECB. While several policy makers subsequently tried to damp expectations for higher rates, Executive Board member Lorenzo Bini Smaghi reignited the debate last week with a warning that imported inflation can no longer be ignored.

The Frankfurt-based central bank will keep its benchmark interest rate at a record low of 1 percent today, according to all 58 economists in a Bloomberg News survey. The announcement is due at 1:45 p.m. and Trichet will hold a press conference 45 minutes later. The euro fell 0.3 percent against the dollar to $1.3764 as of 12:44 p.m. today before the decision.

‘Policy Mistake’

Trichet said last month that while the jump inflation is “temporary,” risks to the price outlook “could move to the upside.” That prompted investors to bring forward expectations for an ECB rate increase to as soon as the third quarter, Eonia forward contracts show.

Economists expect a move in the fourth quarter, before the Federal Reserve, which is forecast to raise rates in the first quarter of 2012, according to Bloomberg surveys.

“Many investors are concerned with the risk that the ECB makes a policy mistake and raises rates too soon,” said David Owen, managing director at Jefferies International Ltd. in London. “A key issue for the ECB should remain the likely pace of activity. The weaker the economic recovery, the more likely the pickup we are seeing in inflation proves temporary.”

ECB Exit

Europe’s debt crisis may damp growth as governments across the region cut spending to rein in deficits. While retail sales in the 17-nations currency bloc unexpectedly fell in December, euro-area services and manufacturing industries expanded at a faster pace than initially estimated in January, led by surging output growth in Germany and France, London-based Markit Economics said today.

European leaders meet in Brussels tomorrow to discuss bolstering their response to the crisis, including a proposal to allow the European Financial Stability Facility to purchase government bonds.

Such a step may allow the ECB to call a halt to its own bond-buying program and proceed with an exit from the emergency measures it’s been forced to implement.

‘Rumbling’ Crisis

“If the sovereign debt crisis can be laid to rest, the ECB will probably want to reduce its accommodative measures,” said James Nixon, co-chief European economist at Societe Generale SA in London. “But it would be tough for the ECB to raise rates if the crisis is still rumbling along in the background.”

While policy makers have stressed the ECB’s key rate remains “appropriate,” signaling they don’t intend to raise it soon, Bini Smaghi said last week that the bank can’t ignore the impact on inflation of “a permanent and repeated increase in the prices of imported products.”

German import-price inflation accelerated to 12 percent in December, driven by soaring costs for commodities such as energy. ECB Executive Board member Juergen Stark said on Jan. 26 that the bank will “act” if needed to counter so-called second-round effects, when workers demand pay increases to compensate for higher living costs.

German chemical workers are seeking up to 7 percent more pay, and the country’s IG Metall union has asked for a 6 percent increase for workers at companies including Volkswagen AG.

Some economists expect the ECB to raise its 2011 inflation forecast next month to more than 2 percent — its definition of price stability — as energy and food prices continue to rise.

‘Difficult’ Number

“That’s a difficult number to deal with, especially when you have interest rates as low as the ECB has,” said Jacques Cailloux, chief European economist at Royal Bank of Scotland Group Plc in London.

The ECB last raised interest rates in July 2008, just as the global financial crisis was brewing, in a warning to unions and households not to seek recompense for faster inflation.

While it was forced to cut rates aggressively just three months later, when the collapse of Lehman Brothers Holdings Inc. threw the world economy into its deepest slump since World War II, the ECB nevertheless proved its resolve.

“The inflation monster is looking in through the window again,” said Juergen Michels, an economist at Citigroup Inc. in London. “The ECB has shown it is prepared to act to keep it out.”

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DAVOS, Switzerland

The U.S. trade deficit edged down to the lowest point in 10 months as exports, helped by a weaker dollar and rising foreign demand, climbed to the highest level in more than two years.

The Commerce Department says that the trade deficit narrowed to $38.3 billion in November, down 0.3 percent from October’s revised $38.4 billion deficit.

Through the first 11 months of 2010, the deficit is running at an annual rate of $500.4 billion, 33.5 percent higher than in 2009 _ a year when the deep recession cut into Americans’ appetite for imports.

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Jan. 2011: $1.25 million gift to St. Louis Beacon Oct. 2010: $5 million to City Academy Sept. 2010: $2 million to St. Louis Art Museum Dec. 2009: $30 million to Danforth Center for Faith & Politics Dec. 2008: $10 million to Washington University’s Hope Center Sept. 2005: $10 million to Donald Danforth Plant Science Center (with promise to match additional $40 million) Dec. 2004: $1 million to Sustainable Neighborhoods Small Business Loan and Gap Financing Program Jan payday loan. 2003: $117 million to Donald Danforth Plant Science Center 1999: Donald Danforth Plant Science Center, $60 million (over 10 years) Nov. 1997: $100 million to Washington University 1986: $100 million to Washington University

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Wall Street is opening quietly a day after major indexes hit two-year highs.

No major corporate earnings announcements are on the day’s schedule.

The Conference Board will release its November index of leading economic indicators Friday morning. Economists expect it to rise 1.1 percent, signaling that the economy is growing.

The House passed an $850 billion tax cut package late Thursday.

European stocks are down 0.5 percent after Moody’s cut Ireland’s bond rating by five notches.

In early trading, the Dow Jones industrial average fell 15 points, or 0.1 percent, to 11,484. The S&P 500 fell 1 point, or less than 0.1 percent, to 1,242. The Nasdaq composite index rose 5, or 0.2 percent, to 2,643.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

NEW YORK (AP) _ Wall Street appeared set for a quiet open Friday, a day after stocks hit two-year highs.

No major corporate earnings annoucements are on the day’s schedule. Many investors will be waiting for the Conference Board to release its November index of leading economic indicators after the market opens.

Economists expect the index _ which tracks data such as orders for new goods and materials _ to rise 1.1 percent. It rose 0.5 percent in October.

Before the opening bell, the Dow Jones industrial average futures rose 3 points, or less than 0.1 percent, to 11,493. Standard and Poor’s 500 futures fell 1.1, or 0.1 percent, to 1,237.40. Nasdaq 100 futures fell 0.8, or less than 0.1 percent, to 2,218.50.

The Dow and S&P 500 index closed Thursday at their highest levels since September 2008 payday advance lenders.

Stocks overseas were mixed. Asian markets closed slightly higher. European markets fell after Moody’s Investors Service downgraded Ireland’s government bond rating by five notches and said that the country had a weak economic outlook. The Euro Stoxx 50, which tracks blue chip companies in countries that use the euro, fell 0.6 percent.

The House passed an $850 billion tax cut package late Thursday night. The bill will extend Bush-era tax cuts for another two years. House Democrats had complained that the tax package is overly generous to the nation’s wealthiest taxpayers.

In a sign that companies are spending more money on technology, software giant Oracle Corp. said after the market closed Thursday that its net income jumped 28 percent last quarter. That beat analyst expectations. The company’s stock gained 4 percent to $31.61 in pre-market trading.

Research in Motion Ltd., the maker of the Blackberry, also said late Thursday that its third quarter earnings beat analyst expectations. The company’s stock jumped 7.2 percent to $64 in pre-market trading.

Before the market opened, Canadian bank BMO Financial Group said that it will buy Marshall & Ilsley Corp. for $4.1 billion in stock. BMO, which is based in Toronto, said it will repay the preferred shares that Marshall & Isley issued as part of the Troubled Asset Relief Program before the deal closes in July.

The yield on the 10-year Treasury fell slightly to 3.37. It traded at 3.42 late Thursday.

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