Stocks post gains as job losses slow

NEW YORK — Investors undaunted by a surprisingly weak jobs report found enough positive news to nudge stocks higher.

News that the nation’s unemployment rate rose above 10 percent last month for the first time in 26 years didn’t derail the stock market’s strong gains in the week, which lifted major indexes more than 3 percent.

The rise in joblessness to 10.2 percent in October, while bad news for the economy, reassured some investors that the Federal Reserve will have to hold interest rates low for some time. That tends to weaken demand for the dollar, which in turn gives a boost to stocks.

The Dow Jones industrial average rose 17.46, or 0.2 percent, to 10,023.42, boosting its gain for the week to 311 points.

Tight credit leads to less borrowing

WASHINGTON — Consumers borrowed less for a record eighth straight month in September amid rising unemployment and tight credit conditions. Economists worry the declines in borrowing will drag on the fledgling recovery.

The Federal Reserve said Friday that borrowing fell at an annual rate of $14.8 billion in September. That’s the biggest decline since July and was larger than the $10 billion drop economists expected.

Americans are borrowing less as they try to repair cracked nest eggs and replenish rainy day funds in a dismal jobs market. Many are finding it hard to get credit as banks, hit by the worst financial crisis in decades, have tightened lending standards.

Regulators shut small Ga. bank

WASHINGTON — Regulators have shut United Security Bank, a small bank in Georgia, bringing the number of bank failures this year to 116 amid the struggling economy and a cascade of defaults on loans.

The Federal Deposit Insurance Corp. on Friday took over United Security Bank, based in Sparta, Ga., with $157 million in assets and $150 million in deposits and two branches. Ameris Bank, based in Moultrie, Ga., agreed to assume the assets and deposits of the failed bank.

The failure of United Security Bank is expected to cost the federal deposit insurance fund an estimated $58 million.

Obama signs assistance bill

WASHINGTON — President Barack Obama signed a $24 billion economic stimulus bill into law Friday, giving tax incentives to prospective homebuyers and additional jobless benefits to those idled by the business slump.

The bill-signing came a day after the House, displaying rare bipartisan agreement over the troubling employment picture nationally, voted 403-12 to pass the measure. The Senate had approved it unanimously on Wednesday.

The White House said the law, which also includes tax cuts for struggling businesses, builds on provisions in the $787 billion stimulus package enacted last February to avert an economic meltdown.

AIG posts 2nd quarterly profit

NEW YORK — AIG said Friday it was profitable for the second straight quarter as its core insurance operations continue to stabilize after the company’s bailout by the government last year.

American International Group Inc. also said the amount of its government financial assistance dropped by 4 percent during the third quarter. Its results got a lift from the increasing value of investments it still holds that soured last year and helped drive it to the brink of collapse.

While new insurance business stabilized compared with the second quarter, it is still sharply below year-ago figures as the economy remains weak and AIG struggles with its image after being bailed out by the government.

Berkshire says 3Q profit triples

OMAHA, Neb. — Warren Buffett’s company says its third-quarter profit tripled as the improving economy and stock market boosted the value of Berkshire Hathaway Inc.’s derivative contracts.

Berkshire said Friday it generated $3.2 billion, or $2,087 per share, in net income. That’s up significantly from last year’s $1.1 billion, or $682 per share.

Most of the swing in earnings is related to unrealized gains in the value of Berkshire’s derivatives, some of which are tied to credit defaults and some of which are tied to equity markets.

Freddie Mac loses $6.3B in quarter

WASHINGTON — Freddie Mac says its losses narrowed to $6.3 billion in the third quarter and the company didn’t need a federal cash infusion.

The McLean, Va.-based mortgage finance company has received about $51 billion since it was seized by federal regulators in September 2008, but avoided tapping the government for more aid for the second-straight quarter.

The quarterly loss, which works out to $1.94 per share, includes $1.3 billion in dividends paid to the Treasury Department. It compares with a loss of $25 billion, or $19.44 per share, in the year-ago period.

The Associated Press

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