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Treasury five-year note yields fell to the lowest level ever after Federal Reserve officials unexpectedly said their benchmark interest rate will stay low until at least late 2014.

Yields on the securities set three consecutive records after Fed Chairman Ben S. Bernanke said Jan. 25 that the central bank is considering additional asset purchases to boost growth. U.S. government debt rose for a third day yesterday as a report showed the U.S. economy grew at a slower-than-forecast 2.8% annual pace in the fourth quarter. The Labor Department is expected to report on Feb. 3 that unemployment remained at 8.5 percent this month.

Bank of America is back to basics _ slimmed down, stripped of its swagger and no longer the biggest bank in the country. And investors, after pummeling the company for two years, finally like what they see.

The stock soared 4 percent Thursday after Bank of America reported that it made $2 billion from October through December, reversing a $1.2 billion loss from a year earlier. The stock is up 27 percent this year.

Almost none of the profit came from improvements in Bank of America’s basic businesses. In fact, it lost money in the fourth quarter in real estate and investment banking.

But the bank raised $2.9 billion by selling its stake in China Construction Bank and $2.4 billion more by selling debt and issuing common stock to replace its higher-cost preferred stock, which paid out annual dividends as high as 8 percent.

“We enter 2012 stronger and more efficient after two years of simplifying and streamlining our company,” CEO Brian Moynihan said.

The cash has strengthened Bank of America’s balance sheet, a key factor as it undergoes a Federal Reserve “stress test” and tries to meet international regulatory standards that demand banks hold more cash against risky loans.

“It would be a big step if Bank of America can prove to the Street it doesn’t need to raise additional capital,” said Shannon Stemm, a banking analyst Edward Jones, a financial advice company Edward Jones.

After the stock dropped 63 percent drop in 2010 and 2011, Bank of America is eager to start over. But it won’t be easy.

Paying $4 billion for Countrywide Financial Corp., the nation’s largest subprime mortgage lender, in 2008 seemed like a bargain but has cost Bank of America tens of billions in mortgage losses, fines and litigation.

“The biggest problem with Bank of America is that you never know what litigation expense lurks around the corner,” Stemm said.

The bank has also been forced to buy billions of dollars’ worth of mortgages from the government-sponsored mortgage financing companies Fannie Mae and Freddie Mac.

In 2011, the bank lost about $14 billion just on legal settlements tied to mortgages issued in years past. On Thursday, the bank said it put aside an additional $1.5 billion in the fourth quarter for future litigation, most of it tied to mortgages.

In addition to the legal costs, the Federal Reserve last year refused to let Bank of America increase its stock dividend, citing uncertainty about the depth of its mortgage problems Faxless payday loans.

It was the only denial issued to any of the four largest U.S. banks by the Fed, which is closely monitoring how the largest banks use their cash since the bailouts of 2008.

This year, Bank of America hasn’t asked the Fed to raise its dividend.

As the U.S. economy slowly comes back, investors are betting Bank of America is poised to capture some of that growth. But that won’t be easy, either.

Loans to people and businesses aren’t as profitable as they were before the financial crisis. Not only are interest rates at historic lows, but regulators have limited the fees banks can collect for overdrafts and late credit card payments. The government has also reduced the fees banks can ollect from stores on debit-card transactions.

Bank of America knows something about debit card fees. Last fall, it caused a public uproar when it announced it would charge customers $5 a month to use debit cards. The bank quickly backed off.

Bank of America serves about half of American households, and its results showed that housing continues remains a concern in the economy. The bank’s real estate business lost $1.5 billion after a 74 percent decline in new home loans. The bank lost some market share and closed a division that helped third-party home lenders.

But Americans seemed to be getting their financial houses in order by paying off more debt on time.

Bank of America, one of the largest credit card issuers, said customers who paid bills a month late declined for the 11th consecutive quarter. New credit card accounts also grew 53 percent, and the division posted a profit of $1 billion.

Bank of America’s investment banking business reported a loss of $433 million due to lower investment banking fees and lower sales and trading driven by the rocky stock and bond markets in the last three months of the year.

The bank’s quarterly earnings came to 15 cents per share, which was less than the 22 cents expected by analysts surveyed by FactSet, a provider of financial data. The earnings were in line with other estimates.

The bank reported fourth quarter revenue rose 11 percent to $25.1 billion from last year. For the year, the bank made $1.4 billion. It lost $2.2 billion in 2010.

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The U.S. trade deficit widened more than forecast in November as American exports declined and companies stepped up imports of crude oil and automobiles.

The gap expanded 10.4 percent to $47.8 billion, the widest since June, from a $43.3 billion shortfall in October, Commerce Department figures showed today in Washington. The deficit was larger than any of the estimates in a Bloomberg News survey of 75 economists.

The U.S. import bill was driven by demand for higher-priced crude oil at the same time American companies tempered orders for consumer goods on concern household spending will cool early this year. Exports from the U.S. declined to a four-month low, depressed by a drop in shipments to Europe.

Every auto show, these days, is "all about plug-in cars and hybrids," they say. Everyone’s gawking at the cherry on top while few notice how different the ice cream underneath is.

At the 2012 North American International Auto Show in Detroit, you can see the auto industry changing — deeply, quickly and probably forever. The reasons are stricter fuel economy regulations and changing attitudes toward environmental responsibility.

Yes, those are things car companies talk about when showing off cars such as the new Ford Fusion Energi plug-in hybrid or the Acura NSX hybrid performance car concept.

But fuel economy and the environment are, just as much or maybe even more, the reasons that cars such as the Dodge Dart are equipped with fuel-efficient 4-cylinder engines, or why General Motors (, Fortune 500) unveiled the very small Buick Encore compact SUV.

They’re also why there was one notable omission from this year’s Detroit show. Not a single truck or large SUV was unveiled at any of the show stands this year. There have been auto shows in recent memory at which it seemed there were nothing but massive trucks rolling out under every drape.

Cool cars from the Detroit Auto Show

There were SUVs, of course — there always will be — such as the Buick Encore.

There was also the new Nissan Pathfinder, but even that roomy, 3-row SUV proves the point that fuel economy has become the big bogie. The Pathfinder you see on the roads today is a truck-based vehicle built to withstand real off-road use. The new one rides on car-like engineering, which will allow it to be lighter and less thirsty.

Engines themselves are getting smaller, too. Even the venerable Bentley is downsizing. The British ultra-luxury automaker unveiled the Continental GT V8 at the show.

Under the hood of this car is a relatively modest twin-turbocharged 4.0-liter V8 which, Bentley estimates, will quaff 40% less premium than the 6.0-liter V12 in the less stingy version of the car. Even with the V8, performance will still be "exhilarating," Bentley promises.

In more pedestrian cars, the "bigger engine" option is pretty much out. Today, the Ford Fusion is available with a V6 engine. The new one will not be. Only various 4-cylinder engines will be offered. The Dodge Dart, as well, will be available only with 4-cylinder engines.

Even performance is being subtly redefined. It used to be that performance was measured in one, single, easily stated number: horsepower. In auto shows past, carmakers would compete to see who could unveil the car with most eye-popping horsepower number.

And that’s not entirely over. Shelby American Inc. was on hand with its display of modified Ford (, Fortune 500) Mustangs with horsepower outputs stretching all the way to a gut-crunching 800.

The "new performance" could be found at the Subaru and Toyota () stands, where the identical Subaru BRZ and Scion FRS were on display. These cars put out a relatively slight 200 horsepower out of 2.0-liter flat-four engines. That’s an impressive figure, given the size of the engine and the fact that it doesn’t have a power-boosting turbocharger or supercharger.

But these cars aren’t about zero-to-60 times, Scion and Subaru representatives say. They’re about driving fun. Engineers put the engine as low as possible in the car to create the lowest possible center of gravity, the idea being to optimize cornering while still going quick enough to produce a healthy grin.

This new trend in less showy fuel economy was perhaps best exhibited in the show’s opening moment. A jury of automotive journalists awarded the North American Car and Truck of the Year Awards to the Hyundai Elantra and the Land Rover Range Rover Evoque.

The Elantra, a compact car, gets 40 miles a gallon without sacrificing driving fun. The Range Rover Evoque uses a turbocharged 4-cylinder engine to provide enjoyable driving performance while still getting an impressive — in this context — 22 miles per gallon in combined city and highway driving.

Of course, there are still those plug-in cars. But with standard, run-of-the-mill gasoline-powered cars pushing the fuel economy bar ever higher, they seem likely to remain car show sideshows for a few years longer. 

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Businesses increased their stockpiles in November to meet rising consumer demand, a gain that likely boosted economic growth in the final months of last year.

Inventories rose 0.3 percent in November, the Commerce Department said Thursday. That followed October’s 0.8 percent gain. Sales increased 0.3 percent after a 0.6 percent October increase.

Companies are building up their stockpiles again after cutting them over the summer amid fears of another recession. The increase is a positive sign for growth because it means many businesses are filling their shelves in anticipating of higher consumer spending.

Inventories rose in November to a seasonally adjusted $1.55 trillion. That was 17.7 percent above the low hit in the recession year of 2009.

This week, the Federal Reserve issued a report saying the final six weeks of 2011 were among the economy’s best last year. The report pointed to higher holiday and auto sales, along with increased travel.

The job market has brightened, too. Employers added 200,000 jobs in December. And the unemployment rate fell to 8 bad credit personal loan lenders.5 percent, the lowest in nearly three years.

Many analysts predict that economic growth rose to an annual rate of roughly 3 percent in the final three months of 2011. That would be an improvement from the summer, when the annual rate was just 1.8 percent. And it’s much better than the 0.9 percent growth rate in the first six months of 2011.

Many businesses reduced their inventory restocking in the summer after consumer spending slowed last spring in the face of higher food and gas prices. The slowdown, along with supply disruptions caused by March’s earthquake in Japan, weakened U.S. manufacturing and contributed to worries of another recession.

Stockpiles at the wholesale level account for about 27 percent of total business inventories. Stockpiles held by retailers make up about one-third of the total and manufacturing inventories represent about 41 percent of the total.

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Lambert-St. Louis International Airport officials confirmed Wednesday that they are targeting an April reopening of the tornado-damaged C Concourse.

Airport Director Rhonda Hamm-Niebruegge told airport commissioners that restrooms in the concourse have been renovated and storm-damaged windows have been replaced.

Storm repairs are being made in concert with planned terminal renovations, which include new ceilings and lighting.

“We would like to do a behind-the-scenes public event before it opens,” Hamm-Niebruegge said. “We kind of wanted to do a big splash for the business community.”

The event would likely occur a couple of days before the renovations are complete.

An EF-4 tornado slammed into the airport on April 22, causing extensive damage to the C Concourse, which remains closed. Airlines that were housed in that part of Terminal 1 were temporarily moved to other gates not in use at the time guaranteed pay day loans.

The tornado also broke numerous windows on the main terminal building, which remained boarded up for months. The tornado also damaged cars that were parked on the top level of the Terminal 1 hourly parking garage.

The extensive damage caused the first prolonged closure at Lambert since the Sept. 11, 2001, terrorist attacks grounded air travel across the United States.

After emergency repairs and cleanup, the airport reopened to limited commercial air traffic within 24 hours.

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National home sales figures will be lowered dating back to 2007 after the private trade group that collects them said the numbers were too high.

The National Association of Realtors said Monday it will release the downward revisions for previously occupied homes on Dec. 21.

Among the reasons for the inflated figures, the Realtors group says: changes in the way the Census Bureau collects data, population shifts and some sales being counted twice. Last year’s total sales figure of 4.91 million was the worst in 13 years.

The Realtors consulted with several government and private housing market experts, including the Federal Reserve, the Department of Housing and Urban Development, the Mortgage Bankers Association, the National Association of Home Builders, mortgage giants Fannie Mae and Freddie Mac and CoreLogic, the California-based data firm that first raised doubts about the annual numbers earlier this year.

CoreLogic estimated that the Realtors group overstated sales in 2010 by at least 15 percent.

The changing numbers could impact how economists view data from the trade group. It could also affect companies who use the figures for hiring and expansion plans.

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BRUSSELS

The cash-strapped U.S. Postal Service said Monday it is seeking to move quickly to close 252 mail processing centers and slow first-class delivery next spring, citing steadily declining mail volume.

The cuts are part of $3 billion in reductions aimed at helping the agency avert bankruptcy next year. It would virtually eliminate the chance for stamped letters to arrive the next day, a change in first-class delivery standards that have been in place since 1971.

The plant closures are expected to result in the elimination of roughly 28,000 jobs nationwide.

At a news briefing, postal vice president David Williams stressed the move was necessary to cut costs as more people turn to the Internet for email communications and bill payment. After reaching a peak of 98 million in 2006, first-class mail volume is now at 78 million. It is projected to drop by roughly half by 2020.

“Are we writing off first class mail? No,” Williams said. “Customers are making their choices, and what we are doing is responding to the current market conditions and placing the postal service on a path to allow us to respond to future changes.”

The cuts, now being finalized, would close 252 out of 461 mail processing centers across the country starting next April. Because the consolidations typically would lengthen the distance mail travels from post office to processing center, the agency also would lower delivery standards.

Currently, first-class mail is supposed to be delivered to homes and businesses within the continental U.S. in one day to three days. That will lengthen to two days to three days, meaning mailers no longer could expect next-day delivery in surrounding communities. Periodicals could take between two days and nine days.

Williams said in certain narrow situations first-class mail might be delivered the next day _ if, for example, newspapers, magazines or other bulk mailers are able to meet new tighter deadlines and drop off shipments directly at the processing centers that remain open.

But in the vast majority of cases, everyday users of first-class mail will see delays of one or two days, including those who pay bills by check, send birthday cards, write letters, or receive prescription drugs or Netflix DVDs by mail no faxing 1 hour payday loans.

After five years in the red, the post office faces imminent default this month on a $5.5 billion annual payment to the Treasury for retiree health benefits. It is projected to have a record loss of $14.1 billion next year. The Postal Service has said the agency must make cuts of $20 billion by 2015 to be profitable.

It already has announced a 1-cent increase in first-class mail to 45 cents beginning Jan. 22.

Separate bills that have passed House and Senate committees would give the Postal Service more authority and liquidity to stave off immediate bankruptcy. But prospects are somewhat dim for final congressional action on those bills anytime soon, especially if the measures are seen in an election year as promoting layoffs and cuts to neighborhood post offices.

On Monday, the Postal Service said it welcomed congressional changes that would give it more authority to reduce delivery to five days a week, raise stamp prices and reduce health care and other labor costs. But the Postal Service said it was opposed to provisions in both the House and Senate measures that would require additional layers of review before it could close post offices and processing centers.

“Speed is very important to the Postal Service in our ability to capture savings,” Williams said.

Maine Sen. Susan Collins, the top Republican on the Senate committee that oversees the post office, believes the agency is taking the wrong approach. She says service cuts will only push more consumers to online bill payment or private carriers such as UPS or FedEx, leading to lower revenue in the future.

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Online: List of facilities to be closed: http://about.usps.com/news/electronic-press-kits/our-future-network/study-list-110915.pdf

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Merck & Co. said Thursday it has revamped its research operations to make them more productive, has started a new four-pronged business strategy to increase revenue and profit and has some exciting drugs on the horizon.

The drugmaker also boosted its quarterly dividend by 4 cents to 42 cents per share this quarter _ the first increase since 2004. That was just before Merck pulled painkiller Vioxx from the market because it increased heart attack and stroke risk. Merck’s shares rose sharply.

Merck’s pipeline of experimental drugs includes what could be several important new medicines for patients and shareholders, company executives told analysts during a daylong business briefing at Merck headquarters in Whitehouse Station, N.J. And Merck, the world’s No. 3 drugmaker by revenue, has eight new products for which it will seek U.S. approval in 2012 or 2013.

That’s just in the nick of time. Merck already has been hurt by competition from generic versions of blockbuster osteoporosis, blood pressure and cholesterol drugs, like its rivals. Next August, its current top seller, $5 billion-a-year allergy and asthma drug Singulair, gets hit by U.S. generic competition.

CEO Kenneth Frazier said the company hopes to keep 2012 revenue about the same as this year’s. In this year’s first nine months, it has increased sales by 5 percent, or nearly $2 billion, to about $35.8 billion.

Merck has gotten five new drugs approved this year, including breakthrough hepatitis C drug Victrelis and the first combination pill for people with both diabetes and high cholesterol, Juvisync. It also has applied to regulators for five more approvals. Those include a long-acting diabetes pill and a combination cholesterol drug.

Merck plans in 2012 and 2013 to seek U.S. approval for eight more medicines, including drugs for chronic insomnia, hardening of the arteries, osteoporosis and reversal of anesthesia, plus two allergy medicines and an improved version of its blockbuster cervical cancer vaccine Gardasil. Altogether, it has 19 medicines in late-stage testing.

Many of those came from Merck’s November 2009 acquisition of Schering-Plough Corp no fax pay day loan. Frazier said the integration has enabled the combined company to reduce costs by $2.8 billion. Merck has done that partly by eliminating 16,000 jobs out of the combined 106,000 the two companies had right before the deal.

Frazier outlined the company’s new business strategy, which includes growing medicine sales in emerging and other key markets, expanding its consumer and animal health businesses, launching new drugs and boosting sales of existing ones, and managing spending tightly.

Merck also has trimmed the number of diseases for which it does research, developed computer models and other ways to decide much earlier whether to scrap or continue testing of experimental drugs, and made other changes to address one of the industry’s biggest challenges _ getting more bang for the billions companies pour into trying to create new drugs.

“The new research strategy and operating model that we’ve been implementing over the past few years is now in place,” research head Peter Kim told about 130 analysts. “These changes position us for long-term growth with a sustainable return on investment.”

He said Merck has two experimental drugs that could transform patient care. One, called anacetrapib, is in final-stage testing for hardening of the arteries.

The other, known only as MK-8931, is in early testing for Alzheimer’s disease. Kim told reporters that while it’s still just a hypothesis that it will work, if it pans out “it’s going to have a dramatic impact on medicine.”

Merck also is developing more combination diabetes drugs, just five years after launching its first, Januvia, now the best-selling pill for Type 2 diabetes.

Merck shares rose $1.18, or 3.5 percent, to close at $34.97, outpacing the 1 percent gain in the Dow Jones industrial average.

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