Dow closes above 11,000 for first time in 18 months

The Dow Jones industrial average closed above 11,000 for the first time in a year and a half Monday, buoyed by investors’ rising hopes about the economy.

Additional Photos

A board on the floor of the New York Stock Exchange shows the Dow Jones industrial average above 11,000 after the opening bell Monday. The closed above 11,000 for the first time in a year and a half. The Associated Press

The Dow edged up about 9 points to almost 11,006. The Standard & Poor’s 500 index came within a point of hitting its own milestone of 1,200 during trading, but it closed just short of that mark.

Stocks have been rising this year on growing expectations that the economy will shake off job market weakness and housing problems.

A test of whether the Dow can hold the 11,000 mark will come in early May, when investors will see whether the government’s next employment report shows that employers added jobs in April as they did during March.

On Monday, a loan agreement for Greece allowed U.S. investors to focus on domestic economic and corporate news. European Union leaders agreed over the weekend to make loans available to Greece to help it lower its public debt burden.

The 16 countries that use the euro agreed to provide $40.5 billion to Greece if needed. The International Monetary Fund could contribute another $13.5 billion. Meanwhile, the latest round of corporate dealmaking signaled that business leaders are more confident about a recovery.

Mirant Corp. agreed to acquire rival power company RRI Energy Inc. for $1.61 billion, and the private equity firm Cerberus Capital Management is buying DynCorp International, a provider of support services to national security operations, for $1 billion.

Trump’s old casino empire emerges from bankruptcy

A federal judge on Monday said the words Donald Trump has longed to hear ever since he lost control of the casino empire that bears his name: You’re hired.

U.S. Bankruptcy Court Judge Judith Wizmur chose a group consisting of corporate bondholders and Trump, the real estate mogul and star of the reality TV series “The Celebrity Apprentice,” to buy the three Atlantic City, N.J., casinos of Trump Entertainment Resorts out of bankruptcy.

Under the deal, bondholders led by New York-based Avenue Capital Group will own most of the company. Mainly in return for the continued use of his famous name on the buildings, Trump will get a 10 percent stake.

The group offered $225 million for the company, topping a bid by billionaire investor Carl Icahn and Texas-based Beal Bank. Icahn had bought the $486 million mortgage on Trump Entertainment Resorts and proposed converting the debt into ownership of the company.

CEO of bailed-out AIG Inc. paid $2.7 million in 2009

American International Group Inc.’s CEO received $2.7 million in compensation for 2009 as the bailed-out insurer began selling assets to repay government loans, an Associated Press analysis of a securities filing shows.

Robert Benmosche, 65, received $1.15 million in salary and a restricted stock bonus worth $1.53 million that can’t be cashed in for three years, AIG said Monday in an annual proxy filing with the Securities and Exchange Commission. He received no cash bonus.

Benmosche took over as CEO in August. His 2009 pay is a prorated amount of his previously announced $7 million pay package, including an annual salary of $3 million plus $4 million in AIG common stock.

Companies like New York-based AIG that hold federal bailout funds are subject to limits on executive pay. The insurer last year cut the salaries of three top executives to comply with the rules. But it got approval for Benmosche’s pay package from federal pay czar Kenneth Feinberg.

Washington Mutual lending tainted by fraud, probe finds

The mortgage lending operations of Washington Mutual Inc., the biggest U.S. bank ever to fail, were threaded through with fraud, Senate investigators have found. And the bank’s own probes failed to stem the deceptive practices, the investigators said in a report on the 2008 failure of WaMu.

Investigators said the bank’s pay system rewarded loan officers for the volume and speed of the subprime mortgage loans they closed on.

Extra bonuses even went to loan officers who overcharged borrowers on their loans or levied stiff penalties for prepayment, according to the report being released today by the investigative panel of the Senate Homeland Security and Governmental Affairs Committee.

Sen. Carl Levin, D-Mich., the chairman, said Monday that the panel won’t decide until after hearings this week whether to make a formal referral to the Justice Department for possible criminal prosecution.

Justice, the FBI and the Securities and Exchange Commission opened investigations into Washington Mutual soon after its collapse in September 2008.

The 119-year-old Seattle-based thrift, with $307 billion in assets, was sold for $1.9 billion to JPMorgan Chase & Co. after its collapse.

JPMorgan Chase spokeswoman Jennifer Zuccarelli declined to comment on the subcommittee report.

Iceland report calls oversight before bank crisis ‘negligent’

A 2,300-page report into Iceland’s devastating 2008 banking collapse charges that the Nordic nation’s ex-prime minister and central bank chief acted with “gross negligence” in allowing the financial sector to overheat without adequate oversight.

The government-commissioned report detailed a litany of errors made in the lead-up to the bank meltdown. Pall Hreinsson, the supreme court judge appointed to head the Special Investigation Commission, singled out seven former officials, including then-Prime Minister Geir Haarde and central bank chief David Oddsson, for particular criticism.

Hreinsson said a parliamentary committee would consider whether legal action should be taken against the seven.

Haarde said regulatory authorities at the time tried their best to save the banking system and should not be blamed for its collapse.

The report found that the country’s three leading banks simply got too big and overwhelmed its financial system when they ran into trouble with excessive risk taking.

the time they dropped, domino-like, within a week of each other in October 2008 after failing to acquire short-term funding, the banking sector had grown to dwarf the rest of the economy by about nine times.

Related Stories