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On Monday May 10, 2010, 6:04 pm EDT

Stocks surge on effort to ease Europe debt crunch

NEW YORK (AP) -- Stocks rocketed to their biggest gain in a year and bond prices fell Monday after a nearly $1 trillion plan to contain Europe's debt crisis reassured investors.

The Dow Jones industrial average rose about 405 points to its biggest advance since March 2009. Broader U.S. indexes outpaced the Dow's 3.9 percent rise. Gains in several European markets topped 9 percent.

The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.55 percent from 3.43 percent late Friday. The drop in demand for safety holdings like Treasurys signaled that investors are less afraid that Europe's debt problems will spoil a global recovery.

AP IMPACT: Market gains set up CEO pay bonanza

NEW YORK (AP) -- America's top CEOs are set for a once-in-a-lifetime pay bonanza.

Most of them got their annual stock compensation early last year when the stock market was at a 12-year low. And companies doled out more stock and options than usual because grants from the previous year had fallen so much in value that many people thought they'd never be worth anything.

But stock prices have generally surged ever since. Even with last week's sharp declines, CEOs still have enormous gains on paper.

Toyota waited months to issue '05 steering recall

MIAMI (AP) -- Toyota waited nearly a year in 2005 to recall trucks and SUVs in the United States with defective steering rods, despite issuing a similar recall in Japan and receiving dozens of reports from American motorists about rods that snapped without warning, an Associated Press investigation has found.

The lengthy gap between the Japanese and U.S. recalls -- strikingly similar to Toyota's handling of the recent recall for sudden acceleration problems -- triggered a new investigation Monday by the National Highway Traffic Safety Administration, which could fine the automaker up to $16.4 million. That was also the amount Toyota paid last month in the acceleration case.

The agency has now linked 16 crashes, three deaths and seven injuries to the steering rod defect, the agency told AP in a statement.

SEC: Exchanges agree in principle to new rules

WASHINGTON (AP) -- The leaders for major securities exchanges have agreed in principle to a uniform system of "circuit breakers" that would slow trading during periods of intense market volatility, federal regulators said Monday.

The agreement has been reached by leaders of six exchanges, including the New York Stock Exchange and Nasdaq.

One possible trigger for last week's historic stock market plunge was the absence of a uniform system.

Trillion-dollar euro rescue won't solve low growth

BRUSSELS (AP) -- A $1 trillion rescue for the euro has halted market panic in its tracks for now, but may not be enough to save the shared currency in the end.

After weeks of dithering, the European Union finally put serious money on the table to prevent its government debt crisis from mushrooming and sinking the euro, stocks and the global recovery.

But the EU still needs to find ways to keep its member governments from spending their way to bankruptcy and disastrously handing the others the bill, as Greece did to start the crisis.

Ultimately, it needs to get its sluggish economy going if it wants to end the threat to its cherished currency union.

Fannie Mae seeks $8.4B in aid after 1Q loss

WASHINGTON (AP) -- Fannie Mae has again asked taxpayers for more money -- this time $8.4 billion -- after reporting another steep loss for the first quarter. The taxpayer bill for rescuing Fannie and its sibling Freddie Mac has grown to $145 billion, and the final tally could be much higher.

The rescue of Fannie and Freddie is turning out to be one of the most expensive aftereffects of the financial meltdown, and Fannie Mae's first-quarter financial report on Monday made clear that there is no end in sight.

Late last year, the Obama administration pledged to cover unlimited losses through 2012 for Fannie and Freddie, lifting an earlier cap of $400 billion.

Coffee, McNuggets fuel McDonald's April increases

CHICAGO (AP) -- Icy coffee drinks and chicken nuggets lured McDonald's Corp. customers to spend more in April, boosting a key performance measure, the fast-food chain said Monday.

Around the globe, sales in locations open at least a year rose 4.9 percent last month. In the U.S., the figure climbed 3.8 percent.

That's slightly less than the gains made in March, when the measure rose 4.2 percent, but was still the second-best posting in a year for the company's American business.

APNewsBreak: Feds expand scrutiny of kids' jewelry

LOS ANGELES (AP) -- Federal regulators announced another recall of children's jewelry with high levels of the toxic metal cadmium Monday, also saying they've expanded their investigation in an effort to keep dangerous items off store shelves in the first place.

A spokesman for the U.S. Consumer Product Safety Commission told The Associated Press its inspectors at 10 of the nation's largest ports are now screening children's jewelry -- typically imported from China -- for cadmium.

Word of increased scrutiny came as the agency announced the voluntary recall of about 19,000 "Best Friends" charm bracelet sets made in China and sold exclusively at the jewelry and accessories store Claire's, which has more than 3,000 stores in North America and Europe.

Ex-Auto czar says Chrysler, GM exceed expectations

DETROIT (AP) -- Former U.S. auto task force head Steven Rattner said Monday that General Motors Co. and Chrysler Group LLC have performed better than he expected they would a year ago.

Rattner said both companies have exceeded the federal government's metrics in sales and restructuring.

Both GM and Chrysler received billions in federal aid and went through bankruptcy protection last year.

Twitter bug lets users fake followers

SAN JOSE, Calif. (AP) -- A Twitter glitch has allowed users to game the popularity contest by making it appear that celebrities had subscribed to read their mini-blog postings known as tweets.

The flaw, which Twitter said Monday it has fixed, allowed users to add anyone else as a follower of their tweets. Normally, the other person has to initiate such "following."

It's unclear how long the flaw existed and how many people took advantage of it. Twitter Inc. says it's looking at the issue.

A side effect of the fix was that for about an hour on Monday, Twitter users showed zero followers while the company fixed the problem.

By The Associated Press

The Dow Jones industrial average rose 404.71, or 3.9 percent, to 10,785.14. At its peak, the Dow was up nearly 455 points. The climb was the biggest since March 2009, when the market was bouncing off its lowest levels in 12 years.

The Standard & Poor's 500 index rose 48.85, or 4.4 percent, to 1,159.73. The Nasdaq composite index rose 109.03, or 4.8 percent, to 2,374.67.

Benchmark crude for June delivery rose $1.69 to settle at $76.80 on the New York Mercantile Exchange. It was as high as $87.15 a week ago.

In other Nymex trading in June contracts, heating oil rose 4.07 cents to settle at $2.1202 a gallon, and gasoline added 4.75 cents to settle at $2.1726 a gallon. Natural gas gained 15.5 cents to settle at $4.170 per 1,000 cubic feet.

In London, Brent crude climbed $1.85 to settle at $80.12 on the ICE futures exchange.

 

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