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United and Continental airlines are raising fares on some U.S. business travelers by $20 to $60 for a round-trip ticket.

The airlines, both owned by United Continental Holdings Inc., raised fares Tuesday on first class and instant-upgrade coach tickets.

AMR Corp.’s American Airlines and Delta Air Lines Inc. said they matched the increases.

JPMorgan analyst Jamie Baker said the “select” increases were the first recently aimed at business travelers, who are less likely to put off or cancel trips because of rising prices.

Baker said Southwest Airlines Co., an influential price-setter, can’t block the increase because it doesn’t sell first-class seats. Last week, it declined to go along with another broad industry fare hike, forcing rivals to roll back increases on routes where they compete with Southwest. Baker said airlines may have pushed leisure fare increases to the limit and are now turning to premium fliers.

Airlines raised prices across a broad range twice in December and three times so far this year before the latest hikes, which FareCompare.com CEO Rick Seaney said targeted “high-end business travelers.”

“This doesn’t affect the 3-day and 7-day advance-purchase tickets that most people buy,” Seaney said.

Airlines have cited rising jet fuel prices for many of their recent price increases, made possible by a tight supply of seats. As travel demand has picked up over the past year, airlines have limited the number of available seats, driving up prices.

“The airlines can raise prices, but there’s a lag to offsetting the oil prices,” said Mike Derchin, an analyst with CRT Capital.

Spot prices for jet fuel have increased nearly by half, to $2.80 a gallon last week from $1.95 a gallon a year ago.

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Ireland’s parliament is being dissolved Tuesday for a long-awaited election, Prime Minister Brian Cowen announced in a farewell address tinged with regret over the nation’s plunge to the brink of bankruptcy.

Cowen declared a formal end to his government two months after he was forced to negotiate a euro67.5 billion ($92 billion) loan package from the European Union and International Monetary Fund.

The premier said the new parliament would convene March 9, but in keeping with Irish practice, did not announce an election date. That was to be revealed later Tuesday after Cowen meets the symbolic head of state, President Mary McAleese. Analysts forecast Feb. 25 as the most likely election date.

Cowen told a silent, somber parliament that his 2 1/2 years as prime minister “have been a time of great trial and test. I believe we have worked hard to correct past failures and to secure the future recovery of our country.”

Cowen agreed to an early election, rather than trying to serve his full term to mid-2012, after suffering a string of political humiliations and losing his parliamentary majority last month.

Before making his final speech to Dail Eireann, Ireland’s parliament, the 51-year-old Cowen had already announced his retirement from politics after a 26-year career. He became Ireland’s first sitting prime minister not to seek re-election to parliament.

Cowen said the winners of the election would wield the power to continue his government’s policies of bank bailouts and deep austerity measures _ and warned that taking another course would lead to even greater economic disaster on line pay day loans.

“This election will define our economic future. It will decide whether Ireland moves forward from this recession, or whether we prolong it or indeed succumb to it,” he said.

After Cowen ended his speech, only the lawmakers from his own Fianna Fail party stood to applaud him.

Ireland’s economy boomed from 1994 to 2007 on the back of heavy foreign investment and a homegrown property bubble. But Irish banks borrowed recklessly on international markets and loaned heavily to construction barons in Ireland, Britain and the United States.

When the global credit crisis in 2008 exposed Ireland’s exceptional vulnerability to property loans, Cowen’s government sought to prevent the collapse of Irish banks by offering them blanket insurance on all their deposits and borrowings from international creditors. That strategy has left Irish taxpayers with a bank bailout bill likely to top euro50 billion ($70 billion), nearly a third of Ireland’s gross domestic product.

The bank-bailout bill helped to drive Ireland’s 2010 deficit to 32 percent of GDP, a postwar European record. Ireland is now facing 2011 spending cuts and tax rises totaling an unprecedented euro6 billion ($8.2 billion), a measure likely to increase unemployment already standing at a 17-year high of 13.5 percent.

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Spain completed the final bond sale of the year with the threat of a credit rating downgrade, undermining the government’s efforts to convince investors the nation and its lenders can meet their refinancing needs in 2011.

Today’s auction of 10-year and 15-year bonds raised 2.4 billion euros ($3.2 billion), missing the maximum goal of 3 billion euros, after a surge in borrowing costs led the Treasury to reduce the usual target of as much as 4 billion euros. The yield on 10-year bonds rose five basis points after the auction to 5.56 percent as of 11:46 a.m. in Madrid.

Moody’s Investors Service said yesterday it may lower the country’s Aa1 rating less than three months after the previous cut. Spain’s central government, regional administrations and banks collectively require 290 billion euros of financing next year, leaving the country “susceptible to further episodes of funding stress,” the company said.

“Spain had to pay much higher yields for this auction, and that’s to be expected in the light of what Moody’s did earlier this week,” said Philipp Jaeger, a fixed-income economist at DZ Bank AG in Frankfurt.

The nation today sold 1.78 billion euros of 10-year bonds at an average yield of 5.446 percent, compared with 4.615 percent last time the securities were issued on Nov. 18, the Bank of Spain said today in Madrid. It also sold 618.7 million euros of 15-year debt at 5.953 percent, compared with 4.541 percent when the paper was last sold on Oct. 21.

Borrowing Needs

Spain is prefunding for 2011 as it has covered this year’s needs, according to Salgado. The budget shows gross issuance of 192 billion euros for the central government next year, although asset sales announced on Dec. 1 may raise 14 billion euros to help reduce the potential borrowing. Even as Moody’s says the country will meet its budget-deficit goals for 2010 and 2011, the rating company highlighted the risks posed by the banks’ requirement to roll over 90 billion euros of debt.

“The sovereign is OK, in terms of debt dynamics and even going forward in terms of the debt trajectory, it’s the banking system that’s a problem,” said Mohit Kumar, a fixed-income strategist at Deutsche Bank AG in London.

The extra yield investors demand to hold Spanish 10-year bonds over German bunds rose nine basis points to 251 basis points at noon today in Madrid. That compares with a euro-era closing high of 283 basis points on Nov. 30. The cost of insuring Spanish debt against default fell 5.6 basis points to 318, according to CMA prices.

Bank Buying

Spanish banks may provide some potential support for future bond auctions, as they have reduced holdings of government debt since June, which may leave them room to soak up new issuance no fax cash advance. Lenders lowered their holdings of Spanish government debt by 15 percent to 131.9 billion euros in October from 155.6 billion euros in June, according to data from the Treasury. Their share of Spain’s debt shrank to 26 percent in October from 33 percent in June, while non-residents boosted their share to 48 percent from 43 percent.

“Reduced exposure by those institutions should ultimately be a good thing in terms of auction participation going forward,” said Sean Maloney, a fixed-income strategist at Nomura Holdings Inc. in London. “It probably leaves a bit of room for the traditional supporters of these auctions to come forward.”

Spanish banks also have reduced their dependence on funding from the European Central Bank, cutting borrowings to 61.1 billion euros in November, the lowest since January, from a peak of 130.2 billion euros in July, according to Bank of Spain data. Deputy Finance Minister Jose Manuel Campa said yesterday he doesn’t foresee “problems of market access” for lenders next year, while Spain hasn’t seen any “lack of appetite” for public debt and he doesn’t expect it to next year either.

Brussels Summit

The auction comes as European leaders gather in Brussels today to discuss the creation of a permanent mechanism to support countries with financing difficulties beginning in 2013 when the temporary facility set up in May expires. Amid concerns that the existing 750 billion-euro fund may not be big enough if more countries seek help, Germany is hardening its opposition to expanding the facility, shifting more pressure onto the ECB and its bond-buying program.

Moody’s analyst Kathrin Muehlbronner said in an interview yesterday that a bailout for Spain isn’t “likely,” though she declined to “rule it out.” Juan Jose Toribio, a professor at IESE business school and former head of financial policy in the finance ministry, puts the chances of Spain needing a bailout at 30 percent, rising to 50 percent if Portugal seeks help.

Moody’s threat to cut Spain’s rating came two weeks after the government announced a series of measures, including partial privatizations, benefits cuts and a reduction in taxes for small businesses, aimed at bolstering growth and slashing the deficit by 50 percent in two years. The Socialist government had already lowered public wages and announced a pension freeze in May after Greece’s near-default.

“What it means is that it doesn’t believe in the package of measures,” Toribio said. “It’s all about the date.”

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Canadian Finance Minister Jim Flaherty said weak U.S. growth, not his country’s strengthening currency, is the biggest threat to Canada’s economic recovery.

Flaherty, the dean of Group of Seven finance ministers, oversees an economy that Pacific Investment Management Co. calls a battleground between the “old normal” and “new normal” forces of the global economy. While Canada’s resources are fueling an investment boom, slumping exports to the U.S. hinder its recovery. Canada’s growth slowed to a 1 percent pace in the third quarter.

“The biggest risk to the Canadian economy now is the risk rising out of the state of the economy in the U.S.,” Flaherty said in an interview with Bloomberg Television in New York. “The fact that we’re seeing a sharp increase in the acquisition of machinery and equipment because of, in part, the strength of the dollar and tax policy is a good sign in the longer term.”

Canada has registered six straight trade deficits, including the record C$2.51 billion in July. The U.S. bought 70 percent of Canada’s exports in October, down from 75 percent in June, and a record of about 85 percent in 2001.

“America is our best customer, and I hope will always be our best customer,” Flaherty, 61, said in the interview today.

The Canadian currency rose 0.2 percent to C$1.0089 per U.S. dollar at 3:38 p.m. in Toronto, compared with C$1.0106 yesterday. The loonie closed at C$1.0039 on Dec. 3, when it reached C$1.0003, the strongest level since Nov. 11. One Canadian dollar buys 99.12 U.S. cents.

‘Long-Term’ Benefits

The weak U.S. recovery has prompted Canadian officials including Flaherty and Prime Minister Stephen Harper to defend efforts by the U.S. Federal Reserve to stimulate its economy with asset purchases, even as other Group of 20 countries have expressed concern about the effects those measures could have on the U.S. dollar and global inflation.

Flaherty said he was encouraged by an agreement between the White House and congressional Republicans to extend tax cuts through 2012, adding that the reductions for wealthier taxpayers will have less of a benefit for the economy than those for lower-income earners.

Canada’s government will use regulation, if needed, to thwart any asset bubbles that may emerge if the Bank of Canada is forced to maintain interest rates low, he said.

Housing Market

“We watch the housing market carefully,” Flaherty said, adding he’s already tightened mortgage rules twice. “Interest rates are low and lots of people are buying properties.”

Bank of Canada Governor Mark Carney left his main interest rate at 1 percent Dec. 7 and said policy makers will remain careful about future increases as trade and Europe’s debt crisis hinder growth. In a Sept. 24 interview on CNBC, Carney said that “there are limits to the divergence that there can be between Canada and the United States.”

Flaherty said the European sovereign-debt crisis is a “serious risk” to the global economy and has the potential to hurt credit markets if the European Union doesn’t “get ahead” of investors with a large enough rescue package.

“We can run into another credit challenge around the world,” Flaherty said, adding that debt restructuring is “one of the options” European governments can consider. “It’s important to get ahead of the issue.”

Debt and Deficits

In a separate interview on “Bloomberg Surveillance” with Tom Keene, Flaherty said the European debt crisis showed the importance of restoring budget balance and the need to supervise financial institutions.

“Debts and deficits matter, we’re seeing that in Europe now,” Flaherty said. “We’re seeing markets go after countries that have let deficits, debts and banking situations get out of control.”

European finance ministers this week ruled out immediate aid for Portugal and Spain or an increase in the 750 billion- euro ($988 billion) crisis fund, counting on European Central Bank bond purchases to calm markets a week after handing Ireland an 85 billion-euro lifeline.

Flaherty defended the country’s record on allowing foreign investment, and said the country’s rejection of BHP Billiton Ltd.’s $40 billion bid for Potash Corp. of Saskatchewan Inc. last month was “unique.” Still, Canada doesn’t have any plans to allow foreign ownership of the nation’s banks and insurers, given how the industry has been able to escape the financial crisis, he said.

“With respect to financial institutions, I can tell you the time is not there,” Flaherty said. “It’s a brand for Canada now, we’re going to maintain the brand.”

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A bloc of Latin American countries issued a stern warning to rich nations Friday that unless they commit to new emissions cuts, the U.N. climate talks in Cancun will fail.

Negotiators from Venezuela, Bolivia, Nicaragua and Ecuador _ all members of the leftist ALBA alliance _ said they would not accept the refusal by some developed countries to extend their binding emissions targets under the Kyoto Protocol, the climate pact that expires in 2012.

Venezuela and Bolivia were among a handful of countries that blocked a nonbinding climate accord with voluntary emissions pledges from being adopted at last year’s U.N. climate conference in Copenhagen. The rules of the talks require consensus.

Without naming them, Venezuelan negotiator Claudia Salerno said “a handful” of developed countries had ruled out a second commitment period under Kyoto. She called their stance “unacceptable” and said it could hold back progress on other issues being discussed in Cancun.

“If there is no second period of Kyoto, it is very difficult that there can be any balanced package” of decisions in Cancun, Salerno said.

The fate of the Kyoto Protocol, or the shape of any agreement that succeeds it, is one of the most divisive issues in the negotiations.

Earlier this week Japan said it was not interested in negotiating an extension of the Kyoto targets, arguing it was pointless unless the world’s largest polluters _ China is No free business cards. 1, and the U.S. No. 2 _ also accepted binding targets. U.N. climate chief Christiana Figueres said Russia and Canada also oppose extending their Kyoto targets.

For 13 years, since it was negotiated, the United States has rejected the Kyoto accord, partly because it made no demands on rapidly developing countries like China and India.

Venezuela and Bolivia and other members of the ALBA bloc argue that climate change is the result of a capitalist system and demand steep emissions cuts from industrialized countries deemed to have a historical responsibility for the release of carbon dioxide and other heat-trapping gases into the atmosphere.

Figueres said she wasn’t expecting the positions of the ALBA nations and the developed countries to “dramatically change” in Cancun.

“What needs to happen here is countries need to find a compromise,” she said.

She and other U.N. officials hope for agreements on secondary issues at Cancun, and expect this central dispute to extend into next year’s negotiations.

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Associated Press writer Mark Stevenson contributed to this report.

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The total net cash flow value of Pittsburgh’s parking garages and metered spaces for the next 50 years could reach an estimated $3.2 billion. But the city’s potential up-front windfall from leasing those assets to a firm who would privately manage and profit from them still wouldn’t resolve Pittsburgh’s looming pension shortfall.

Those are a few of the basic conclusions that the Finance Scholars Group presented to Pittsburgh City Council Friday afternoon in a hearing over the firm’s study of the city’s parking assets and the options it faces in resolving the city’s looming pension obligations. The Finance Scholars Group was commissioned by city council to conduct the study.

“This will be the most important piece of legislation that this council votes on,” said Darlene Harris, president of city council, in announcing FSG’s presentation. “We want to get it right.”

FSG talked through six different options the city has: Shifting parking assets to the pension fund, selling the garages and surface lots owned by the Pittsburgh Parking Authority, raising parking revenue through a private management firm, issuing a bond backed by increased parking revenue, leasing the parking to an outside operator, and allowing the state to take over the pension plan and raise extra revenue through increased parking.

After quickly dismissing the first three options, FSG walked council through a gnarled collection of scenarios.

“I don’t envy your decision,” said Chester Spatt, a principal of FSG and the director of the Center for Financial Markets at Carnegie Mellon University’s Tepper School of Business.

FSG’s report comes a few days after Mayor Luke Ravenstahl’s administration received bids by investment groups interested in leasing the city’s parking assets for 50 years. The highest bid was $452 million by an investment team that combined J.P. Morgan Asset Management and Connecticut-based LAZ Parking.

Ravenstahl is working to generate at least $200 million to infuse into the city’s pension fund to avoid a state takeover of the fund. The Pittsburgh Parking Authority’s 13 parking garages, 32 metered parking lots and about 8,000 on-street metered spaces generated a number of bids more than $300 million.

To be sure, if the city follows through with leasing off its parking, higher parking rates will follow.

FSG’s study projects that a leaseholder, to generate profit from the arrangement, would increase parking rates in the garages from $3.75 to $7.00 for an hour or less in a Pittsburgh Parking Authority garage, an increase that becomes comparatively more modest the longer the parking term.

“In some ways, it’s like borrowing from the future,” Spatt said.

City controller Michael Lamb questioned whether the city could implement such increases itself without leasing the parking off, treating the added revenue as an asset that would help better leverage funding for its pension obligations.

Spatt agreed while unsure of the legal issues of the city in doing so. He emphasized that he believes the city’s pension underfunding is underestimated based on over-optimistic investment assumptions.

“This has generally been sold as a panacea,” said councilman Doug Shields, district five, of the mayor’s plan to lease city parking assets. “You don’t arrive at a simple answer for a complex problem.”

“This is a frustrating situation,” said Natalia Rudiak, councilwoman who represents the city’s southern communities of district 4. On the broad issue of the city’s historically underfunded pensions, she added: “It’s fundamentally unfair for us to keep kicking the can down the road.”

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ISTS Worldwide Inc. on Wednesday named Akash Jain its first president.

The company, which has U.S. headquarters in Fremont, focuses on retail and payments technology.

In this new role, Jain will be responsible for growing the business in rest of the world outside of North America, strategy and development of IP, heading India business and delivery operations high risk personal loans.

ISTS said Akash has more than 22 years of professional experience in the software services industry, working with companies including MasterCard and Reliance.

Click here to read the press release.

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For more than two decades, Ashwin Patel has been bringing Indian and Pakistani grains and spices — as well as the latest Bollywood movies — to St. Louis through Seema Enterprises, his grocery business.

Patel can often be found behind the cash register at the store, at 10635 Page Avenue. He knows most of his customers by name, some of whom come from as far away as Columbia, Mo., and Carbondale, Ill., to stock up on groceries every month.

Inside his stores, customers can find a couple of dozen types of rice — parboiled, kerala, ponni, Basmati and so on. It’s also one of the only places St. Louisans can find gongura and methi leaves, lychee and green mango juices, Indian-style frozen hot pockets, henna, toothpaste made with neem herbs, and shelves full of teas from the region.

Patel immigrated to the United States from India in 1978. In 1985, he and his wife, Raksha, took over Seema Enterprises after the store’s former owner passed away.
The Page store, which first opened in 1977, was one of the first Indian groceries in the Midwest, according to Patel.

In 1991, he expanded to a second location to Manchester Road, wanting to be closer to the nearby Hindu temple and the growing South Asian population moving into west St. Louis County.

In the last two years, he’s nearly doubled the size of both stores so he has more space to display the ever-expanding variety of South Asian frozen and dried goods that are increasingly available.

Over the years, Patel has also helped fill a void in the community by sponsoring movie screenings and musical performances by some of Bollywood’s biggest musical stars including the likes of Asha Bhosle, Sonu Nigam and Jagjit Singh, to name a few.

How has your business changed in the last 25 years?

It’s a big change. In that time, there were not that many things available, just rice, flour, dals (lentils). We didn’t have frozen food and ready-to-eat meals then, which are becoming much more popular with this new generation. … At that time, there were only one or two kinds of rice: long-grain or jasmine. Basmati was hard to get back then (and it was so expensive and hence, less popular.) Now we sell almost 25 different kinds of rice. Tamil people eat a different kind of rice. Telugu people use a different rice. …

With the popularity of Indian cooking, are more of your customers non-South Asians? Or is your core business still South Asians?

We have non-South Asian people — they are at least 15 percent of our customers. They mostly come here looking for spices and rice.

A lot of the non-South Asians are becoming vegetarian. So they come to Indian grocery stores to see what they can cook. … And these days, more people are becoming samosa-lovers.

You sponsor a lot of movie screenings of Bollywood movies in area theaters. When did you start that and why?

We started doing that in 1994 … I love Indian movies. When I was growing up in India, I used to watch the first day, first showing of new movies. When we came here, we were out of touch with Indian movies for 15 to 20 years. … Then distributors started to bring the movies to the big cities in 1993-94. So we tried it. … Bollywood has become so popular …

Movie rentals used to be a big part of your business, too, right? Do you still do that?

At one point, movie rentals were 25 percent of the business. But we discontinued that about seven months ago.

Nobody rents anymore. The Internet is bringing more mischief with the piracy thing. … We were paying more money to the distributors and less people were renting them or going to the theaters. Nowadays, many people have Indian satellite channels. About 75 percent of South Asian households have a satellite TV. And they can watch 24 hours of shows and news in their own native languages. …

We also used to sell audio CDs, too. But nobody buys it anymore. They just download it.

Are you worried about the future of your business as the first generation of South Asian immigrants ages and there are more second and third generation South Asians?

The kids who are born here, they are not going to be coming here as much. … I think it might survive but in a different way.

With them, items like Indian hot pockets and naan pizza are really popular. It won’t be the same, but we’ll be OK for at least 10 to 15 years. … But it’s going to be changing.

The kids who were born here, they still have roots. But the newer generation, we don’t know. My son likes Indian food. But the next generation?

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The regular lunch crowd waiting to enter Crown Candy Kitchen at North 14th Street and St. Louis Avenue may soon find another reason to visit the block.

A ribbon-cutting ceremony is set for July 29 to launch the fully renovated Crown Square, a residential and commercial development in the 2600 and 2700 blocks of North 14th.

The development, offering 80 residential units and 35,000 square feet of commercial and retail uses, spans 27 buildings and 2? acres of green space.

The developers, two nonprofit community groups, are optimistic the $35 million project will bring more traffic to that once-booming north St. Louis neighborhood and help lead a renaissance for the area.

"This is the biggest project that we’ve ever been involved with," said Sean Thomas, executive director of the Old North St. Louis Restoration Group, which teamed up with the Regional Housing and Community Development Alliance.

"It is very close to being ready," Thomas said. "Work to reopen the street is the last component to be finished."

In fact, those two blocks of North 14th will be reopened to vehicular traffic for the first time in 33 years. The buildings there had fronted on a failed pedestrian mall since 1977, when urban planners believed that was the best way to attract business to the neighborhood.

However, prospective shoppers and clients of businesses along what was called the 14th Street Mall didn’t like parking behind the buildings and having to walk around to the front doors.

So most businesses along the pedestrian mall eventually closed.

In 2005, the Regional Housing and Community Development Alliance and Old North St. Louis Restoration Group decided to partner to redevelop the mall, which had become an eyesore.

The buildings were acquired over almost two years, from late 2005 through summer of 2007, for about $2 million, developers said.

Funding for the project came from a variety of sources. The development alliance provided a $2 million predevelopment loan. Another $12 million came from state and federal tax credits, and the rest through individual and institutional contributions.

Thomas said he was especially encouraged about the development’s prospects because nearly 70 of 80 housing units in the redevelopment area already have been leased to tenants.

"The challenge now is in leasing out the commercial spaces," he said. "But we have been getting a lot of interest. We want to get them out here to see it and look at the possibilities."

At least one restaurant and some retail businesses are in discussions with real estate agents for the developers, Thomas said.

Two new businesses already have moved into Crown Square, even as the work continues outside on the street. Norah Ryan has opened her law office there, and Therapy, a women’s clothing store, is preparing for its grand opening soon.

Ryan said she was happy about deciding to move her office from Clayton to Crown Square.

"There’s a wonderful sense of community, and a lot of things are going on here," she said.

Ryan, who was familiar with the neighborhood, said the full impact of the redevelopment struck her while taking a friend on a driving tour of the city last fall. "I thought, ‘Wow! That’s pretty neat.’"

And she said her new office was just the right size for her law practice, at about 900 square feet of renovated space.

Thomas acknowledged that a fear of crime has kept some businesses and clients away from the neighborhood for years. But he noted that crime rates in the area had gone down in recent years, and that many of the area’s residents were actively involved in Neighborhood Watch and other programs to keep the area safe.

Thomas said he could foresee a day when the development would rival the neighborhood’s heyday of the 1920s through the early 1950s. In addition to small businesses, that stretch of North 14th once had the first J.C. Penney store in the St. Louis area, he said, adding that the area also had Woolworths and J.J. Newberry’s five-and-dime stores.

"You could argue that this was the main street of a small town, and it could become that way again," he said.

E.M. Harris Construction Co., based in St. Louis, began work on the residential part of Crown Square late in 2007. Restoration of the commercial buildings began in 2008. The project was named in honor of Crown Candy Kitchen, which has anchored the neighborhood for years.

The buildings in Crown Square date from as old as 1860 to the 1920s. Developers restored each building to the era in which it was built, Thomas said.

"This project reflects what cities actually look like — they evolve and change over time," he said.

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U.S. stocks soared Thursday, with the major indexes gaining about 3%, after Chinese officials dismissed reports that they’re reviewing their nation’s investment in European bonds amid concerns about the continent’s debt problems.

The Dow Jones industrial average (INDU) added 285 points, or 2.9%, and finished at 10,259. American Express (AXP, Fortune 500), Intel (INTC, Fortune 500) and Alcoa (AA, Fortune 500) led the advance, rising more than 5%.

The S&P 500 (SPX) index rose 35 points, or 3.3%, and the Nasdaq (COMP) composite increased 82 points, or 3.7%.

Stocks erased gains in the last hour of trade Wednesday, with the Dow finishing below 10,000 for the first time in three months, as the focus shifted from strong economic reports to lingering concerns about global economic recovery and the weakening euro.

But investors’ confidence got a boost Thursday after China’s State Administration of Foreign Exchange refuted reports that the country was reconsidering its holdings in European bonds, calling the claims "groundless."

"China has always firmly supported the EU integration process. We support the European Union and the International Monetary Fund package of financial stability measures being taken," said agency chief Yi Gang in a statement.

China holds $2.45 trillion of foreign exchange reserves, with U.S. Treasury debt and Euro zone government bonds making up key investments.

"The news out of China denying rumors that they’re going to reevaluate their European assets sparked a nice rally," said Peter Cardillo, chief market economist at Avalon Partners.

Had the rumors been true, Cardillo said the euro would have crashed and sent markets into a free fall.

"That kind of move would have been detrimental for China, too," Cardillo said. "If Europe falls apart, so will the global economy."

Although worries about Europe’s debt problems will continue, Cardillo said it’s only a matter of time before fears subside.

The CBOE Volatility index, or the VIX (VIX), Wall Street’s fear factor, sank more than 14%.

"With the facts we have now, we know Europe’s troubles will impact economic activity on a global scale, but not by much and that’s key," Cardillo said.

But markets could continue to remain volatile as investors remain jittery.

"Anytime we see moves of this kind of magnitude, even if it’s positive, investors take a little more caution," said Russel Lundeberg, chief investment officer at Barrett Capital Management. "A nervous environment keeps volatility high."

Economy: The government revised its reading on first-quarter gross domestic product (GDP), the broadest measure of U.S. economic activity, to an annual growth rate of 3%. The figure was below expectations of 3.3%, according to a consensus of economists surveyed by Briefing.com. The initial reading, released last month, was a 3.2% rate.

But the revision also showed that the rate of consumer spending has doubled since the fourth quarter of 2009, and remains consistent with the forecast for annual GDP to grow between 3% and 3 payday advance.5% in 2010, Cardillo said.

The Labor Department said filings for first-time unemployment insurance fell last week to 460,000 from a revised 474,000 the previous week. Economists were expecting claims to fall even lower, to 455,000.

Companies: Johnson & Johnson (JNJ, Fortune 500) executives told lawmakers that the widespread recall of children’s Tylenol medicines earlier this month was a precautionary measure taken against "remote" health risks. But the Food and Drug Administration is investigating reports of at least 775 serious side effects from the recalled drugs.

Johnson & Johnson’s stock was the only Dow component to slip into the red Thursday, falling 0.2%. Since the May 1 recall, the company’s shares have fell more than 7%.

BP (BP) executives also took the hot seat on Capitol Hill in ongoing testimony about the Gulf oil spill. The company’s shares soared 7% after an Oppenheimer analyst raised the stock’s rating, saying that the recent sell-off has gone too far. Shares of BP have dipped 30% since the April 20 explosion.

Apple’s (AAPL, Fortune 500) market capitalization overtook Microsoft’s (MSFT, Fortune 500) for the first time in 20 years at the close Wednesday, making it the second most valuable company in the nation after Exxon Mobil (XOM, Fortune 500). Both tech giants added about 4%.

World markets: Stocks around the world also advanced on the news from China. In Europe, the CAC 40 in France jumped 3.4%. Britain’s FTSE 100 added 3.1% and the DAX in Germany also gained 3.1%

Asian shares also finished higher. The Hang Seng in Hong Kong and Japan’s Nikkei added 1.2%. The Shanghai Composite gained 1.2%.

Dollar and commodities: The euro, which has seesawed since falling to a four-year low last week amid concerns about the region’s economic stability, rebounded against the dollar, rising 1.5% against the U.S. currency.

The greenback was down 1.3% against the British pound, but it was up 1% versus the Japanese yen.

The weaker dollar gave momentum to oil prices. Oil for July delivery rose $3.04, or 4.3%, to $74.55 a barrel.

Gold for June delivery dipped $1.50 to settle at $1,211.60 per ounce.

Bonds: Treasury prices tumbled Thursday, pushing the benchmark 10-year note’s yield up to 3.35%. Bond prices and yields move in opposite directions.

Trading volume: Market breadth was positive. On the New York Stock Exchange, winners beat losers nearly 13 to one on volume of just under 1.4 billion shares. On the Nasdaq, advancers topped decliners seven to one on volume of 2.4 billion shares.  

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