Business Blog Posts

Many of Obama's fellow Democrats in that chamber strongly oppose the measure as favoring the wealthy, and are still angry with him for cutting the deal with Republicans without them.

"We have a situation where we have a proposal before us that gives 6,600 families in America $25 billion and holds the rest of the provisions in the bill, (such as) low-income tax cuts, hostage to that blackmail," House Speaker Nancy Pelosi said on Wednesday, referring to a provision on the estate tax.

Still, most analysts believe the deal, which has already received overwhelming bipartisan approval in the Senate, will pass the House with substantial backing from Republicans and some Democrats.

The legislation would extend for two years income tax cuts enacted under Republican former President George W. Bush, with Democrats backing off their earlier fervent opposition to extending the cuts for the richest Americans. The Bush-era cuts are due to expire at the end of 2010 unless Congress acts.

The measure would also prevent a spike in taxes on capital gains and dividends, renew long-term unemployment insurance and provide new tax relief for students, working families and businesses.

House Democrats are becoming more resigned to passage of the $858 billion package. Experts predict the measures will probably boost economic growth but add to the $1.3 trillion budget deficit, which has unsettled the bond market.

Most of the 255 House Democrats may oppose the overall tax package, but it is expected to be approved with overwhelming support among the chamber's 179 Republicans.

ONE POINT GDP BOOST

Obama on Wednesday called on the House to approve the bill "as soon as possible" to avoid tax increases across the board in January.

Many economists predict the tax package could add up to 1 percentage point to economic expansion next year, due partly to a one-year cut in the payroll tax and removal of uncertainty about taxes in general.

Obama's current position on taxes contrasts sharply with his position earlier this year when he and his fellow Democrats fought against renewing tax reductions for the wealthiest Americans -- those with household incomes above $250,000 -- while supporting continued cuts for middle-class taxpayers.

At the time, they said that with budget deficits at record levels, the United States could not afford to give the tax breaks to the wealthiest.

But with Republicans drawing a line in the sand on the issue and scoring major victories in November 2 congressional elections -- taking control of the House and making gains in the Senate -- Obama acquiesced on tax cuts for upper-income Americans.

Democrats did win their desired extension of unemployment benefits, which were expiring for millions of people shut out of jobs in the lackluster economy.

Traders were wary that headlines from the discussion in Brussels about a permanent mechanism to prevent fiscal crises from spreading may push up the euro toward $1.33, though persistently higher U.S. bond yields have been keeping the dollar broadly supported in year-end markets.

Shrinking trading volumes in Asian equity markets have been a tell-tale sign that investors are heading to the sidelines for the rest of the year rather than expose their portfolios to more risks. However, Japanese stocks continued to outperform thanks to foreign investment.

"The Nikkei is taking a breather after a six-week rally, but sentiment remains bullish overall," said Takashi Ohba, a senior strategist at Okasan Securities in Tokyo.

* Japan's Nikkei share average was flat though up 1 percent .N225 so far in the week, outperforming the MSCI all-country world index advance of 0.1 percent .MIWD00000PUS.

* The MSCI Asia Pacific ex-Japan index of equities fell 0.4 percent .MIAPJ0000PUS in sluggish trade.

* After sliding more than 2 percent in November on early profit taking, the index has staged a rally in light turnover in December. It is up 3.6 percent so far in December.

* The euro was up 0.1 percent at $1.3225, though sell orders around $1.3300 kept it hemmed in a tight range, traders said. Chart support at $1.3164, the low of the range carved out in the past week, if breached could lead to a further decline to around $1.2969, the November low.

* Ten-year U.S. Treasury futures expiring in March were up 9/32 after plumbing a 7-month low overnight. In the cash market, the yield on the 10-year note slid to 3.48 percent after climbing as high as 3.57 percent overnight.

(Editing by Kim Coghill)

(Additional reporting by Antoni Slodkowski and Hideyuki Sano in TOKYO)

The lawsuit seeks damages from the well owners BP, Anadarko Petroleum Corp and Mitsui & Co Ltd unit MOEX, and well driller Transocean Ltd and its insurer QBE Underwriting/Lloyd's Syndicate 1036, part of Lloyds of London, for their roles in the Gulf of Mexico disaster.

"While today's civil action marks a critical step forward, it is not a final step," U.S. Attorney General Eric Holder told reporters at a news conference.

"Both our criminal and civil investigations are continuing, and our work to ensure that the American taxpayers are not forced to bear the costs of restoring the Gulf area -- and its economy -- goes on," he said.

The suit, the first by the U.S. government after the April 20 explosion aboard the drilling rig in which 11 workers died, was filed in a New Orleans federal court which is considering private lawsuits against BP and the others for the spill.

BP, which returned to profitability in the third quarter of 2010, has begun selling assets and amassing a massive warchest to pay for damages caused by the oil spill, which the oil concern has estimated could reach as much as $40 billion.

The oil company said on Wednesday it was weighing the sale of its Canadian natural-gas liquids business.

In response to the lawsuit, BP said it is "solely a statement of the government's allegations and does not in any manner constitute any finding of liability or any judicial finding that the allegations have merit."

"BP will answer the government's allegations in a timely manner and will continue to cooperate with all government investigations and inquiries," the company said.

SETTLEMENT IS A POSSIBILITY

Legal experts have said they expect the two sides to settle eventually but it could take years. In comparison, Exxon XOM.N> settled government claims over the spill by its Valdez tanker in Alaska in 1991, two years after the oil hit the coast.

The lawsuit against BP and others warned that "the full extent of potential injuries, destruction, loss and loss of services is not yet fully known and may not be fully known for many years."

Shares in the companies targeted in the lawsuit fell in the wake of the lawsuit.

The stocks trimmed early losses to close off their lows, with BP down 1.3 percent at $43.86 and Anadarko Petroleum down 2.3 percent at $67.41. Halliburton, which wasn't named in the suit, closed near session lows, down 3.1 percent at $39.79.

The Deepwater Horizon drilling rig blowout spilled about 4.9 million barrels of oil over several months. It fouled resort beaches and fishing grounds and led to hundreds of lawsuits over lost revenues and wages.

The investment came from Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers and existing investors, Twitter said.

The money will help Twitter grow the company, Twitter said in a post on its corporate blog on Wednesday. The blog post did not elaborate and a spokesman declined to offer specifics.

Twitter, which had 175 million users as of September, is among the new crop of quickly growing Internet social networking services. Others include Facebook and Zynga.

The company added two new board members -- FlipBoard Chief Executive Mike McCue and DoubleClick CEO David Rosenblatt.

The moves come two months after the four-year-old company handed the job of chief executive to Dick Costolo, the architect of its new advertising efforts, a sign that making money is a priority for the service.

Costolo told Reuters in May that Twitter planned to have hundreds of advertisers using its ad system by the end of the year. He said the company's previous valuation of $1 billion meant that it was incumbent on Twitter to develop a business that can generate hundreds of millions of dollars of revenue.

Twitter had raised $160 million in four earlier funding rounds.

Technology blog AllThingsDigital first reported the $200 million funding round. It said that Kleiner Perkins beat out Russian investment firm DST Global. The Twitter spokesman confirmed that the figures were accurate.

Twitter, which allows users to send 140-character text messages, or Tweets, to followers, is one of the Web's most popular social networks, and is challenging established Web services like Google Inc and Yahoo Inc.

Investors are watching the service closely, hoping one day to buy public shares of the company.

(Reporting by Alexei Oreskovic. Additional reporting by Jim Finkle. Editing by Robert MacMillan)