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10B Daily News – Tuesday, January 31, 2012 The wait for an expect- ed deal between Greece and its creditors rattled financial markets around the world Mon- day. Yields for ultra- safe U.S. government debt hit their lowest this year, the euro dropped against the dollar, and European stocks took a fall. Stocks and bond yields drop on Europe worries Wall Street NEW YORK (AP) — weekend. A tentative deal would replace bonds held by invest- ment funds and banks with new ones at half the face value. But U.S. stocks dropped only slightly. The Dow Jones indus- trial average fell 6.74 points to close at 12,653.72, for a drop of 0.1 percent. The Dow lost as much as 131 points in morning trad- ing then slowly recov- ered in the afternoon. Borrowing costs for European countries with the heaviest debt burdens shot higher. The two-year interest rate for Portugal's gov- ernment debt jumped to 21 percent after trading around 14 percent last week. Greece and the investors who bought its government bonds were said to be close to an agreement over the The plan is aimed at cutting Greece's debt by roughly (euro) 100 bil- lion ($132 billion). Greece needs it to secure a crucial install- ment of bailout loans and make an upcoming bond payment. But a deal has been in the works for weeks and could still fall apart. The focus on Greece has shifted attention away from what's going well in the U.S., said Jack Ablin, chief invest- ment officer at Harris Private Bank. Compa- nies have reported stronger quarterly earn- ings, and hiring has picked up. ''Our collective breath has been held for so many months,'' he said. At this point, a good or even a bad resolution of Greece's debt crisis entertainment magazine select TV MOVING to Saturdays Starting February 4, 2012 Due to increased content planned for the new expanded Saturday Edition WEEKEND EDITION Rack and Store single copy price will change to $1.00 effective the same date D NEWSAILY RED BLUFF TEHAMACOUNTY Timothy Frantz M.D. Board Certified Otolaryngologist Now Accepting NEW Patients. No referral needed in most cases. ALLERGY Clinic with Diane Kinney, PA-C Kylie Carreras, LVN NOW OPEN! Red Bluff MON.-FRI. 8AM-6PM SAT. 8AM-5PM Call NOW to schedule an appointment 528-1220 RED BLUFF 331 Elm Street 2138 Court Street 222-5115 REDDING TRUCKHurry in! Now through January 31st RED BLUFF 614 WALNUT ST. 530-529-1612 CORNING 1723 SOLANO ST. 530-824-4929 EASY CREDIT! AUTO CENTER CARE TIRES • WHEELS • BRAKES • ALIGNMENT • A/C • AUTO REPAIR • & AND MORE could lead to a stronger U.S. stock market, Ablin said. ''If it finally happens and the world doesn't fall apart, maybe we'll have a reason to take risk again,'' he said. ''Once you pull off the Band-Aid, it feels bet- ter.'' U.S. Treasury yields sank to their lowest level this year as traders parked cash in the safest assets. The yield on the 10-year Treasury sank to 1.85 percent. It was trading above 2 percent last Wednesday. The yield on the five- year Treasury note hit a record low of 0.71 per- cent early Monday. It finished Monday at 0.74 percent, from 0.75 per- cent late Friday. An agreement between Greece and its creditors could serve as a blueprint for other European countries with heavy debt bur- dens. Dan Greenhaus, chief global strategist at BTIG, pointed to Portu- gal's soaring bond yields in a note to clients. ''At this rate, Portu- gal is going to move from the back to front burner in very, very short order,'' he said. European leaders also gathered in Brus- sels, focusing on how to stimulate economic growth when huge gov- ernment spending cuts threaten to push many countries back into recession. The latest data showed Spain's economy shrank in the last three months of 2011. In other trading, the Standard & Poor's 500 index fell 3.32 points, or 0.3 percent, to 1,313.01. The Nasdaq composite lost 4.6 points, or 0.2 percent, to 2,811.94. The euro dropped 0.5 percent against the dol- lar, to $1.3124 in late trading Monday from $1.3208 late Friday. It was worth almost $1.50 in May. European stocks sank. French and Span- ish stock markets closed down 1.6 percent. Ital- ian stocks closed down 1.2 percent and German stocks 1 percent. Among stocks mak- ing big moves Friday: — The fast food chain Wendy's fell 3.8 percent. The Wendy's Co. said a key measure of earnings dropped 30 percent in the fourth quarter. Charges from selling Arby's offset the effects of a jump in sales. — PharMerica Corp. plunged 11 percent. The Federal Trade Commis- sion said it was suing to block rival pharmacy company Omnicare Inc. from completing its $457 million takeover of PharMerica. The agency said a merger of the country's two largest long-term care pharmacies would raise the cost of Medicare prescription plans cov- ering drugs for nursing home residents. Stock in Omnicare Inc. fell less than 1 percent. — Thomas & Betts Corp. soared 23 percent on news that Swiss engineering group ABB Ltd. agreed to buy the maker of power lines and other electrical products for $3.9 bil- lion in cash. Fast, High Quality Repairs with 100% Satisfaction 915 Madison St., Red Bluff 530.527.6160