GM to shed 21,000 U.S. workers by 2010

The file photo taken on April 15, 2009 shows the GM logo outside the GM headquarters in Detroit, the United States. General Motors announced restructuring plans on April 27, 2009, to cut 23,000 U.S. jobs by 2011, drop its storied Pontiac brand and slash 40% of its dealer network in its latest bid to stay out of bankruptcy.

CHICAGO, April 27 (Xinhua) -- General Motors presented on Monday an updated viability plan that will lay off more U.S. workers.

GM's hourly workers will be shed by 7,000 more than outlined in the February plan, from 61,000 to 40,000 by 2010. Salaried employees are also expected to be cut further.

The file photo taken on April 15, 2009 shows the GM headquarters in Detroit, the United States.

GM, surviving on 15.4 billion dollars in U.S. loans and seeking more, launched a very dilutive debt-for-stock exchange offer for 27 billion dollars of its unsecured bonds. If the swap is successful, bondholders will own about 10 percent of the company. If not, it will file for bankruptcy protection.

As part of the revised viability plan, GM in the U.S. will focus its resources on four core brands, Chevrolet, Cadillac, Buick and GMC. The Pontiac brand will be phased out by the end of 2010.

The file photo taken on April 14, 2009 shows a "GM next" board inside the GM headquarters in Detroit, the United States.

Chrysler talks break down, bankruptcy looms

A walking stop sign is seen in front of the logo of Chrysler at a car dealership in New York, the United States, April 7, 2009. The U.S. Treasury will provide a further five billion dollars in loans to General Motors and 500 million dollars to Chrysler as the automakers work on their viability plans, officials said Tuesday.

CHICAGO, April 29 (Xinhua) -- Talks between the U.S. Treasury Department and Chrysler LLC lenders over the automaker's debt broke off late Wednesday, leaving bankruptcy the automaker's all but certain option, news agencies reported.

Chrysler will file for bankruptcy after the talks broke down, since its 80 percent of stocks are controlled by private-equity firm Cerberus Capital Management LP, Reuters reported, quoting the Wall Street Journal.

The Associated Press also reported that the talks "have disintegrated," citing its own sources.

"After allowing talks to continue late into the night Wednesday, the Treasury Department finally ended negotiations after the hedge funds were unable to come to an agreement," the AP report said.

The U.S. government had set an April 30 deadline for Chrysler to strike a deal with Fiat after concluding that the struggling automaker would not be viable on its own.

The talks between Chrysler LLC's lenders and the Treasury Department was aimed at reducing the automaker's 6.9 billion dollars in secured debt and keep it out of bankruptcy protection.

The breakdown also means further emergency government aid for Chrysler will be withheld.

Chrysler officially files for Chapter 11 bankruptcy

CHICAGO, April -- Chrysler LLC officially announced on Thursday that the once auto giant will file for Chapter 11 bankruptcy shortly after U.S. President Barack Obama made a midday speech, in which he indicated that the troubled automaker will form an alliance with the Italian carmaker Fiat Group SpA.

In a statement, Chrysler said it was not able to obtain the necessary concessions from all of its lenders, which would have avoided the need for a bankruptcy proceeding. As a result, under the direction of the U.S. Treasury, Chrysler and 24 of its wholly owned U.S. subsidiaries filed voluntary petitions under Chapter 11of the Bankruptcy Code in U.S. Bankruptcy Court for the Southern District of New York.

A Chrysler 200C is shown during the International New York Auto Show in New York, the U.S., in this file photo taken on April 8, 2009. U.S. President Barack Obama said on Thursday that he supports the nation's third largest automaker Chrysler LLC to file for bankruptcy protection, saying he believes Chrysler will emerge quickly from bankruptcy as a stronger, more viable company.

At the same time, Chrysler announced that it has reached an agreement in principle to establish a global strategic alliance with Fiat SpA to form a vibrant new company. It will allow Chrysler and Fiat to fully optimize their respective manufacturing footprints and the global supplier base, while providing each with access to additional markets. Fiat power trains and components will also be produced at Chrysler manufacturing sites.

"While I am excited about the creation of the global alliance, I am personally disappointed that today Chrysler has filed for Chapter 11. This was not my first choice," said Bob Nardelli, chairman and CEO of Chrysler.

An employee works in a Chrysler dealer in New York, the U.S., in this file photo taken on April 24, 2009.

Chrysler also will file a motion under Section 363 of the Bankruptcy Code requesting the swift approval by the court of the agreement with Fiat and the sale of Chrysler's principal assets to the new company. The benefit of this type of filing is speed. It should allow a leaner new company to emerge in a matter of 30 to 60 days, well positioned for long-term viability.

To push the Chrysler forward, the U.S. government will provide sufficient debtor-in-possession (DIP) financing to allow continuation of "business as usual."

Chrysler also reached an agreement in principle with GMAC to become the preferred lender for Chrysler dealer and consumer business. GMAC will be able to offer the best long-term finance options for Chrysler dealers and customers with standard rate installment products.

U.S. President Barack Obama speaks about the Chrysler Chapter 11 filing and its partnership with Fiat from the White House in Washington April 30, 2009.

Under the plan the Obama administration outlined Thursday, the Treasury Department will provide Chrysler with up to 3.5 billion U.S. dollars in DIP financing, and the Canadian government will provide around 800 million dollars and get 2 percent of Chrysler's equity. The United States has transferred 280 million dollars to a Chrysler warranty guarantee program.

The government will loan GMAC LLC additional money so it can take over financing of Chrysler vehicles from Chrysler Financial. The government already has infused nearly 6 billion dollars into GMAC.

After the partnership deal is completed, the Voluntary Employee Beneficiary Association (VEBA) will own 55 percent of the new company and the U.S. and Canadian governments will own proportionate shares of a 10 percent stake. Fiat will initially hold a 20 percent ownership stake in Chrysler. Fiat can conditionally increase its ownership stake by an additional 15 percent in three increments.

U.S. President Barack Obama (C) speaks about Chrysler and the auto industry, as he stands with his auto task force at the White House in Washington April 30, 2009.

Chrysler also indicated that most manufacturing operations will be temporarily idled from next Monday. Normal production schedules will resume when the transaction is completed, which is anticipated within 30 to 60 days.

Nardelli, who is going to leave the company and return to Chrysler's biggest stockholder Cerberus Capital Management as an advisor after the transaction, assured that the new Fiat-Chrysler company will produce and support quality vehicles under the Jeep, Dodge and Chrysler brands as well as parts under the Mopar brand. Chrysler dealerships remain open for business serving customers. All vehicle warranties will be honored without interruption and consumers can continue to purchase Chrysler vehicles with complete confidence.

Chrysler's official bankruptcy announcement came after President Obama's speech about the Chrysler's future on Thursday ,after talks between the Treasury Department and the Auburn Hills automaker's creditors failed to reach an agreement on late Wednesday night.

The president harshly scolded the group of investment companies and hedge funds that balked at a debt restructuring. "I don't stand with those who held out when everybody else is making sacrifices," Obama said, calling them "speculators" who sought to endanger Chrysler's future for their own benefit.

The bankruptcy "will be quick, it will be efficient, it is designed to deal with those last few holdouts," Obama said.

He emphasized filing for bankruptcy "is not a sign of weakness, but rather one more step on a clearly charted path to Chrysler's revival."

Obama administration unveils plan to unlock credit for small businesses

WASHINGTON, March 16 (Xinhua) -- The Obama administration on Monday unveiled a plan to help unlock credit for the nation's small businesses, which have generated about 70 percent of net new jobs annually over the past decade.

"We are taking immediate action to help ensure that credit -- the lifeblood of America's small businesses and its economy -- gets flowing again to entrepreneurs and business owners," said U.S. Treasury Secretary Timothy Geithner, who with President Barack Obama unveiled the plan at the White House.

U.S. President Barack Obama (R), accompanied by Treasury Secretary Timothy Geithner, delivers remarks to small business owners, community lenders and members of Congress at the White House in Washington on March 16, 2009. The Obama administration on Monday unveiled a plan to help unlock credit for the nation's small businesses, which generate about 70 percent of net new jobs annually. (Xinhua/Zhang Yan)

The plan includes 730 million dollars from the president's 787-billion-dollar economic stimulus package passed by Congress in February, with reduced small-business lending fees and an increase on the guarantee for some Small Business Administration (SBA) loans to 90 percent.

Under the plan, the government will take aggressive steps to boost bank liquidity with more than 10 billion dollars aimed at unfreezing the secondary credit market -- a key to making it easier for small businesses to borrow.

The nation's 21 largest banks that have received government bailout money must report monthly on how much lending they do to small businesses.

U.S. President Barack Obama delivers remarks to small business owners, community lenders and members of Congress at the White House in Washington on March 16, 2009. (Xinhua/Zhang Yan)

All other banks taking federal taxpayer help have to report quarterly on small business loans. Even banks that are not taking government funds are being required by the administration to make an extra effort to increase small business lending.

"As the flow of credit has dried up during this recession, small business owners who were prudent and responsible have been set back by the behavior of others in our financial system who were not," Geithner said.

Businesses with strong credit histories have seen loan applications denied due to conditions that have nothing to do with their own actions and are now struggling to expand their businesses, make their payments or even keep workers on their payrolls, he said.

U.S. President Barack Obama (L) greets a participant in an event on helping small businesses recover from the economic crisis, in the East Room of the White House in Washington March 16, 2009. (Xinhua/Reuters Photo)

"As a result, while the U.S. Small Business Administration typically guarantees about 20 billion dollars in loans annually, new lending is trending below 10 billion dollars this year," the secretary said.

In brief comments with Geithner before the official announcement, Obama called small businesses "one of the biggest drivers of employment that we have."

He had pressed his economic team to specifically help owners of small businesses and thaw credit, Obama said, adding that the newest initiatives were only a first step.

EBay to cut 10 percent of workforce

LOS ANGELES, Oct. 6 (Xinhua) -- Silicon Valley-based eBay said on Monday it is laying off about 10 percent of its global workforce, while spending more than 1 billion dollars to buy companies to buttress its business.

The layoffs are affecting about 1,000 full-time employees and about several hundred temporary workers, according to a company statement. Although a company statement put the number of laid off temporary employees at "several hundred," company spokesman Jose Mallabo declined to be more specific and wouldn't speculate. EBay has nearly 16,000 workers worldwide.

After the announcement, eBay's stock fell 1.05 dollars to 17.89 dollars at the close of trading.

EBay's statement said the reductions were needed "to simplify and streamline eBay's organization, improve the company's cost structure and strengthen the overall competitiveness of the company 's existing businesses."

Because of the layoffs, eBay said it would incur a restructuring expense of 70 million to 80 million dollars, mostly in the fourth quarter.

"While never an easy decision to make, these reductions will help improve our operations and strengthen our ability to continue investing in growth," said John Donahoe, eBay's chief executive officer and president.

The company also said it was bolstering its operations with key acquisitions, with plans to buy Timonium, Maryland-based Bill Me Later with 820 million dollars in cash.

While eBay's online payment service, PayPal, handles many small business and individual transactions, Bill Me Later specializes in working with major retailers, including Apple, Borders, Continental Airlines and Toys "R" Us.

"We focus on the top of the tier, trying to get to where the money is," said Mark Lavelle, Bill Me Later's vice president of corporate development. "Big customers and large volume is where we' ve staked out our market."

"By combining the best of PayPal and Bill Me Later, we can offer an even stronger service for consumers and merchants," said PayPal President Scott Thompson.

That deal is expected to be completed by the end of the year.

EBay also said it has bought the Danish online classified- advertising sites Den Bla Avis and BilBasen for 390 million dollars in cash.

U.S. Fed approves Mitsubishi to purchase stake in Morgan Stanley

WASHINGTON, Oct. 6 (Xinhua) -- The U.S. Federal Reserve authorized Japanese bank Mitsubishi UFJ Financial Group Inc. on Monday to purchase a stake in U.S. investment giant Morgan Stanley.

The Fed said in a brief statement that it had approved the application of Mitsubishi UFJ Financial Group Inc., Japan's largest bank, "to acquire up to 24.9 percent of the voting shares of Morgan Stanley."

In an effort to withstand the severe credit crisis, both Morgan Stanley and Goldman Sachs, the last two major independent investment banks in the United States, won approval last month from the Fed to convert to bank holding companies.

The step taken last month by the two investment banks followed forced sale of Merrill Lynch & Co. and the failure of three other huge banking companies -- Bear Stearn Co., Washington Mutual Inc. and Lehman Brothers Holdings Inc..

All of them were felled by bad mortgage investments.

Dollar higher against euro, sharply lower against yen

NEW YORK, Oct. 6 (Xinhua) -- The dollar rose against the euro and the pound, but fell sharply against the yen on Monday amid worries over the financial crisis.

European and U.S. stocks crashed on Monday as investors worried that the credit crisis would hit global economy. There was growing realization that the 700 billion dollars financial bailout plan would not be a quick fix to troubled credit market and U.S. economy. President Bush signed the bailout plan into law soon after the House of Representatives approved it Friday.

Currency trading was still dominated by risk aversion on Monday, sending the yen higher against high-yielding currencies. Investors unwound so-called carry trades, where they took out loans in Japanto take advantage of its low interest rate. The euro kept falling after governments across Europe rushed to rescue large banks over the weekend.

The euro bought 1.3457 dollars in late New York trading compared with 1.3835 dollars it bought late Friday. The pound fell to 1.7388 dollars from 1.7784 dollars.

The dollar rose to 1.1480 Swiss francs from 1.1264 Swiss francs, rose to 1.1061 Canadian dollars from 1.0796 Canadian dollars. The greenback touched a session low of 100.24 yen before recovering to100.56 Japanese yen, still much lower than 105.35 Japanese yen it bought late Friday.

Wall Street bounces from earlier deep losses amid global sell-off

NEW YORK, Oct. 6 (Xinhua) -- Wall Street rebounded Monday afternoon from early deep losses as investors hunted for bargain after the major indexes plunging more than 7 percent.

However, the Dow Jones industrial average was down more than 300 points to settle below 10,000 points, the first time since October 2004.

Wall Street joined a global sell-off as investors realized that the U.S. government's 700-billion-U.S. dollar rescue plan won't work quickly to unfreeze the credit markets.

The emergency rescue of two big European banks and a move by several European governments to guarantee bank deposits intensified fears that the credit crisis can not be contained.

The Dow Jones industrial average fell 369.88 points, or 3.58 percent, to 9,955.50. The Standard & Poor's 500 Index skidded 42.34 points, or 3.85 percent, to 1,056.89, while the Nasdaq Composite Index dropped 84.43 points, or 4.34 percent, to 1,862.96.

Crude prices dip below $88 amid global market sell-off

NEW YORK, Oct. 6 (Xinhua) -- Crude prices dipped below 88 U.S. dollars a barrel, the new low in the past eight months, amid global sell-off on fears that financial crisis could lead to a recession to curb oil demand.

Light, sweet crude for November plunged 6.07 dollars to settle at 87.81 dollars a barrel on the New York Mercantile Exchange. London Brent crude fell 6.45 dollars to 83.80 dollars a barrel.

"The price of oil continued on its significant decline and even broke some key support levels when it traded below 90 dollars per barrel," Wall Street Strategies' senior research analyst Conley Turner told Xinhua.

"The fall is being attributed to the fact the current financial crisis is causing a lot of market participant to sell the commodity on the outlook that the world wide demand for the commodity will be cut sharply in the short term," said Turner.

Crude prices have declined from a peak of 147.27 dollars a barrel set on July 11 as high prices and the spreading financial crisis curb oil consumption.

Crude prices retreated as China, the world's second biggest consumer, will not import gasoline for the second straight month and instead export the fuel due to heavy domestic stockpiles and a dip in demand.

"With demand for oil dropping, so have the prices of commodities in general and that is bringing down the price of anything even remotely related," Turner pointed out.

"Public sentiment about the U.S. economy is taking a turning for the worse and this is having an adverse impact on all aspects of the markets which in turn is driving down equity prices," he added.

Wall Street plunged Monday, with the Dow Jones industrial average diving more than 800 points and trading below 10,000 for the first time in four years amid a global heavy sell-off on fears that the credit crisis would drag the economy into recession.

Europe's stock markets also suffered black Monday with the FTSE-100 down 5.77 percent, Germany's DAX down 7.07 percent, and France's CAC-40 down 9.04 percent.

"The fact that the global economy appears to be slowing poses additional downside risks for the United States. In fact, it is these adverse factors taken in aggregate that are serving as offsets to any positive gains to the U.S. economy due to the falling price of oil," said the analyst.

Wall Street down on economy concern

NEW YORK, Oct. 1 (Xinhua) -- Wall Street fell in early trading Wednesday, as investors doubted that a 700 billion U.S. dollars rescue plan could prevent the U.S. economy from recession.

Stocks fell sharply Monday after the House surprisingly voted down the plan, but rebounded Tuesday on speculations that the Congress will finally pass the bill. The Senate is expected to vote on the plan Wednesday night and the market will remain nervous until the votes on Capitol Hill are complete.

Investors also awaited reports on construction spending from the U.S. Commerce Department and manufacturing index from the U.S Institute for Supply Management. Economists had estimated that both spending and manufacturing would decline.

Financials mostly moved down Wednesday. And Deutsche Bank lowered its earnings outlook for the second-biggest U.S. company General Electric. GE dropped three percent in early trading.

The Dow Jones fell 133.25 to 10,717.41. Broader indexes also declined. The Standard & Poor's 500 index slipped 18.26 to 1,148.10; and the Nasdaq fell 23.06 to 2,068.82.

U.S. Senate to vote on financial rescue plan on Wednesday

WASHINGTON, Sept. 30 (Xinhua) -- The U.S. Senate has scheduled to vote on a revised 700 billion dollar financial rescue plan on Wednesday, U.S. media reported.

The new version will raise federal deposit insurance limits to 250,000 dollars from 100,000 dollars per account, as suggested by the two White House hopeful earlier the day.

U.S. Senate Banking Committee Chairman Chris Dodd (D-CT) (L) and Senator Judd Gregg (R-NH) answer questions during a news conference, about the failure of a bill to provide a bailout for the current financial and banking crisis, on Capitol Hill in Washington, Sept. 29, 2008

Meanwhile, U.S. President George W. Bush has warned that the damage to the nation's economy will be "painful and lasting" if Congress fails to act to rescue markets.

"The reality is that we are in an urgent situation, and the consequences will grow worse each day if we do not act," Bush said at the White House Tuesday morning.

His remarks came a day after the U.S. House of Representatives voted narrowly to reject the 700-billion-dollar financial rescue bill that the Bush administration and leading members of Congress had agreed was necessary.

Under the rescue bill, the federal government will be authorized to purchase these assets from banks and other financial institutions, which is expected to help free them to resume lending to businesses and consumers.

Hollywood studios file lawsuit against RealNetworks

LOS ANGELES, Sept. 30 (Xinhua) -- Major Hollywood studios filed on Tuesday a lawsuit in a Los Angeles court against RealNetworks, accusing the Internet media software maker of distributing a product that could be used to copy DVDs and store the contents on computers.

The software, called RealDVD, was introduced by RealNetworks earlier this month. The company, which also produces the popular on-line media player RealPlayer, said RealDVD could allow users to easily store movies in their computers, without cracking a DVD's protective encryption.

The lawsuit filed by the Motion Picture Association of America (MPAA), which represents major studios including Disney, Paramount and Sony Pictures, claims that the software violates the Digital Millennium Copyright Act and "illegally circumvents" copyright protections built into DVDs.

MPAA requested the court to issue a restraining order preventing RealNetworks from selling the software and demanded unspecified damages.

MPAA's move followed reports that Seattle-based RealNetworks planned to file its own lawsuit against the studios, seeking a clarification that its DVD-copying software complies with the law.

The movie industry's trade group earlier had successfully blocked the distribution of similar technologies that crack encryption codes in DVDs and could be used to make copies of movies.

"RealNetworks' RealDVD should be called StealDVD," MPAA's General Counsel Greg Goeckner said in a statement.

However, RealNetworks argued in a statement that its technology only allows users to store and play their own movies on their own computers, and "does not enable users to distribute copies of their DVDs."

But MPAA said the RealNetworks software would enable "massive theft" of creative content that would have direct, negative impact on the delivery of movies, television shows and other entertainment.

Crude oil rises back above $100

NEW YORK, Sept. 30 (Xinhua) -- Crude oil rebounded from previous day's huge sell-off and topped 100 U.S. dollars a barrel Tuesday as investors bet the U.S. Congress will approve a new bailout plan.

Light, sweet crude for November delivery rose 4.27 dollars to settle at 100.64 dollars a barrel on the New York Mercantile Exchange.

Prices slid more than 10 dollars, biggest drop in seven years, on Monday after the U.S. House of Representatives rejected the 700billion-dollar rescue plan. Major U.S. stocks were battered as well with Dow made a landslide loss of 777 points.

Investors' mood was lifted a bit Tuesday as many of them bet the U.S. legislators will approve a restructured bailout plan, which hopefully would avert the economic downturn. Worries that slowing economy would cut energy demand from consumers and businesses worldwide has made the crude oil lose more than 30 percent since its peak in July.

In London, Brent crude for November delivery rose 4.10 dollars to 98.08 dollars a barrel on the ICE Futures Exchange.

Wall Street soars after record plunge on financial bailout plan

NEW YORK, Sept. 30 (Xinhua) -- Wall Street rebounded sharply Tuesday after record plunge on expectations that the Congress could approve the rescue plan for the financial sector.
The Conference Board, an economic research group, said Tuesday its Consumer Confidence Index rose to 59.8 from a revised 58.5 in August.

The Chicago Purchasing Managers' index, which measures business conditions across Illinois, Michigan and Indiana, came in at 56.7 compared with 57.9 in August.

The Dow Jones average rose 485.21, or 4.68 percent, to 10,850.66. The Standard & Poor's 500 index recovered 58.34, or 5.27 percent, to 1,164.73, and the Nasdaq composite index rose 98.60, or 4.97 percent, to 2,082.33.

The Dow Jones industrial average plunged 778 points after the House rejected the U.S. government's 700-billion-dollar bailout plan.　

New York Mayor expected to run for third term

NEW YORK, Sept. 30 (Xinhua) -- Mayor Michael Bloomberg of the New York City plans to announce Thursday that he will probably seek a third term as mayor if a local law limiting the mayorship to two consecutive terms is revised, media reported Tuesday.

Local news media cited sources who were reportedly briefed on the mayor's plan as saying that Bloomberg, whose current term must legally end in January 2009, is expected to argue on Thursday that the city's financial crisis requires his ongoing leadership.

The reports could not be confirmed on Tuesday, however.

Bloomberg, first taking office as New York's mayor in 2001 and was re-elected in 2005, oversaw the economic revival of the city after the September 11, 2001 attacks.

If re-elected again next year, he will have been the fourth city mayor to win a third term. Three mayors did so before the term-limit law was enacted 15 years ago.

Although New Yorkers rejected twice the idea of repealing term-limits in the past, it was reported that Bloomberg could still "in theory" make the legal change through the City Council, amid mixed reactions of New Yorkers to the idea and the current crisis on Wall Street.

Bush warns of "painful" damage to economy if Congress fails to pass bailout bill

WASHINGTON, Sept. 30 (Xinhua) -- U.S. President George W. Bush warned Tuesday that the damage to the nation's economy will be "painful and lasting" if Congress fails to act to rescue markets.

"The reality is that we are in an urgent situation, and the consequences will grow worse each day if we do not act," Bush said at the White House.

His remarks came a day after the U.S. House of Representatives voted narrowly to reject the 700-billion-dollar financial rescue bill that the Bush administration and leading members of Congress had agreed was necessary.

"We are at a critical moment for our economy and we need legislation that decisively addresses the troubled assets now clogging the financial system, helps lender resume the flow of credit to consumers and businesses, and allows the American economy to get moving again," said the president.

Under the rescue bill, the federal government will be authorized to purchase these assets from banks and other financial institutions, which is expected to help free them to resume lending to businesses and consumers.

Bush said that the U.S. economy "is depending on decisive action from the government." "The sooner we address the problem, the sooner we can get back on the path of growth and job creation," he said.

"I'm confident we'll deliver," he added.

The president said that he acknowledges that this is a difficult vote for members of Congress and that many are uncomfortable with what's transpiring in the economy.

But if no action is taken, "the economic damage will be painful and lasting," he said.

"We're facing a choice between action and the real prospect of economic hardship for millions of Americans," Bush noted. "For the financial security of many Americans, Congress must act."

End of offshore oil drilling ban signals shift of U.S. energy strategy

WASHINGTON, Sept. 27 (Xinhua) -- U.S. Senate on Saturday approved the lifting of a quarter-century ban on offshore oil and gas drilling, a move analysts say marks a major shift in U.S. energy strategy.

Senators approved a 630-billion-dollar spending bill by a 78-12 vote. House of Representatives on Wednesday approved the same bill which dropped the offshore drilling bans.

The move indicates that the United States has shifted from heavy reliance on imports to a balance between imports and self-reliance in energy consumption, analysts say.

Congress imposed a ban on offshore drilling in 1981. In 1990 then President George H. W. Bush issued an executive order, reinforcing the ban.

In the past 27 years, Congress has renewed drilling bans on the Atlantic and Pacific coasts year after year because of environmental concerns. Some coastal states which feared that drilling might hurt the tourism industry also pushed for the ban.

Analysts believed energy security had been the top concerns behind the U.S. off-shore oil and gas drilling ban. A seal on the non-renewable energy at home brings Washington long-term strategic advantages, they said.

However, critics noted the ban had also confined the country's development, depriving its coastal regions of otherwise abundant job opportunities and aggravating its dependence on oil imports.

The United States has rich oil reserves. According to statistics from the U.S. Energy Department, its proven oil reserves stand at 20.9 billion barrels, ranking the 11th place in the world.

Under the bans, drilling is only allowed in the central and western Gulf of Mexico and part of the offshore area in Alaska, while 85 percent of offshore areas in the Atlantic, the Pacific and the eastern Gulf of Mexico were strictly prohibited from drilling operations.

Oil production in the United States has been sluggish in recent years. As the world largest oil consumer the United States relies heavily on imports. Statistics show that in 2007 the United States imported an daily average of 12.1 million barrels of oil to help meet its average daily consumption of nearly 20.7 million barrels, making it the largest oil importer in the world.

President George W. Bush lifted an executive ban on offshore oil drilling in July and had repeatedly urged Congress to lift legislative restrictions on offshore oil drilling to help address the rising fuel costs.

The president argued that the legislature was allowing skyrocketing oil prices to hurt the U.S. economy while the new drilling technologies eventually leaves little impact on the environment.

White House spokesman Tony Fratto expressed a welcome to the senate vote for an end of the ban, saying that the bill "puts the United States one step closer to ending our dependence on foreign sources of energy" by opening up huge reserves of oil shale in the West.

However, experts noted the lifting of the offshore oil drilling moratorium does not mean significant rise on domestic oil output in a short period of time and its effect could hardly be felt for at least ten years.

Los Angeles to receive federal aid to cope with foreclosure crisis

LOS ANGELES, Sept. 26 (Xinhua) -- The city of Los Angeles is to receive about 33 million dollars directly from the federal government to buy and fix up distressed homes, the Department of Housing and Urban Development (HUD) announced Friday.

Meanwhile, city officials said that in the next few months, the city could also get money from the state of California, which has a pool of 145 million dollars to allocate to communities.

With more than 13,000 foreclosed homes in the city, Los Angeles City Councilman Ed Reyes warned that the federal funds would go quickly.

As part of a housing bill approved in July, DHUD's neighborhood stabilization program gives money directly to local governments to buy and fix up foreclosed homes.

Under the program, governments can demolish or rehabilitate blighted homes, then either resell them or use them for affordable housing.

Critics of the program say it could hurt recovery, explaining that governments will now be competing with lenders and private homeowners who have been struggling to sell in a depressed market.

The HUD also announced that it will allocate more than 521 million dollars in federal aid over the next 18 months to California and many of its communities hardest hit by the foreclosure crisis.

Dow Jones closes higher on optimistic expectation of bailout plan

NEW YORK, Sept. 26 (Xinhua) -- U.S. stocks climbed Friday, as financial stocks rallied in the last hour of the session on speculation that U.S. Congress will agree on the government's rescue plan over the weekend. Bank of America and JPMorgan Chase led the rally.

Stocks tumbled in early trading, as the bailout plan fell through and Washington Mutual Inc., one of the U.S. largest banks, was seized by the Federal Deposit Insurance Corp. late Thursday.

The setback of the 700 billion U.S. dollars bailout plan unnerved investors. A group of House Republicans declined to support the proposed rescue plan by Treasury Secretary Henry Paulson Thursday, not long after key lawmakers of both parties declared they'd reached fundamental agreement on the rescue plan.

Investors also seemed unease after the Federal Deposit Insurance Corp. seized Washington Mutual on Thursday and sold its branches and assets to JPMorgan Chase for 1.9 billion dollars. It was the largest U.S. bank failure in history. JPMorgan Chase announced that it would raise ten billion dollars in new capital from sale of common stocks.

However, stocks rebounded from the day's lows after the U.S. president George W. Bush predicted lawmakers will reach a deal on the government's bailout plan. And Democratic and Republican leaders vowed to keep Congress in session until a deal has been reached.

But the market was cautiously optimistic about the plan, especially after an economic report indicated the U.S. economy was weaker than expected. The U.S. Commerce Department reported Friday that gross domestic product, or GDP, increased at a 2.8 percent annual rate in the second quarter. That fell short of the 3.3 percent growth estimated a month ago.

In corporate news, Research In Motion tumbled the most in seven years and dragged down the Nasdaq, after the company forecast earnings that missed estimates.

The Dow Jones rose 121.07, or 1.1 percent, to 11,143.13. Broader indexes traded mixed. The Standard & Poor's 500 index rose4.09, or 0.34 percent, to 1,213.27; and the Nasdaq fell 3.23, or 0.15 percent, to 2,183.34.

Dollar falls amid U.S. financial bailout breakdown

NEW YORK, Sept. 26 (Xinhua) -- The dollar fell against most major currencies on Friday after the 700 billion dollars bailout plan for U.S. financial industry ran into opposition.

Talks over the bailout broke late on Thursday as some Republican lawmakers wanted an alternative plan under which the government would provide insurance to companies that agree to hold frozen assets. The alternative plan would cost taxpayers less, the Republicans said.

Negotiations restarted on Friday after collapse of Washington Mutual, the largest savings and loan bank of U.S.. Investors wait nervously for an agreement, which could come out by Sunday as some congressmen predicted.

The dollar was mostly lower amid risk aversion. However, it rose against the euro after euro zone sources said market expectations about European Central Bank rate cuts early next year or even sooner were reasonable.

The euro bought 1.4618 dollars in late New York trading compared with 1.4622 dollars it bought late Thursday. The British pound rose to 1.8426 dollars from 1.8382 dollars.

The dollar fell to 1.0891 Swiss francs from 1.0893 Swiss francs, and fell to 106.06 Japanese yen from 106.48 Japanese yen. It fell to 1.0320 Canadian dollars from 1.0338 Canadian dollars.