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The Federal Reserve will have to raise its benchmark interest rate to 3 percent by the end of the year to combat inflation, said Stephen Stanley, chief economist at RBS Securities Inc. in New York.

Citigroup Inc. and Marshall & Ilsley Corp. were among the worst performing stocks in the Standard & Poor’s 500 Index this year, dragged down by souring commercial and residential property loans that may extend the declines into 2010.

Japan Airlines Corp., Asia’s biggest carrier by sales, plunged to a record in Tokyo trading after reports the carrier may enter bankruptcy proceedings led investors to sell shares on the year’s last trading day.

GMAC, the home and auto lender that counts the U.S. government as the largest stakeholder, is discussing with the Obama administration a third bailout of $3 billion to $4 billion

Barton Biggs and Marc Faber, who recommended buying stocks in March when investors were dumping them, are again united as they predict gains for U.S. equities and the dollar

Treasuries were little changed after the government sold a record-tying $42 billion of five-year debt, the second of three note sales this week totaling $118 billion.

Sanofi-Aventis SA’s $1.9 billion bid for Chattem was leaked in advance to two French investors who reaped $4.2 million by making illegal insider trades, U.S. regulators claim in a lawsuit

Greece’s efforts to win a second bailout from international creditors teetered in the balance as negotiations in Athens failed to clinch an agreement.

American factories added the most jobs in a year as they stayed at the forefront of the expansion, boosting employment opportunities in the rest of the economy.

The U.S. labor market recovery is broadening as industries from construction to retail to manufacturing added workers in January and the jobless rate fell to the lowest level in three years.

European retail sales unexpectedly declined in December, led by Germany and France, as unemployment at a 14-year high and government spending cuts sapped consumer demand.

BEIRUT/UNITED NATIONS (Reuters) - Western and Arab countries responded with outrage on Sunday after Russia and China vetoed a U.N. Security Council resolution that would have urged Syrian President Bashar al-Assad to give up power.

YENAGOA, Nigeria (Reuters) - A Nigerian militant group based in the oil-producing Niger Delta said on Sunday it had attacked an oil pipeline owned by Italian firm Eni where witnesses said there was a fire late on Saturday.

RABAT (Reuters) - Morocco's King Mohammed issued pardons to several leading Islamists who rights groups say were unfairly jailed, signaling a less hardline approach after moderate Islamists came to power in an election last year.

KABUL (Reuters) - A car bomb in the south Afghan city of Kandahar killed at least seven people and wounded 19 on Sunday, the province's media office said.

MANAMA (Reuters) - Bahraini opposition parties, launching a week-long 'sit-in' for political reforms at a mass rally, swore on Sunday to take their campaign to the centre of last year's democracy protest in the capital Manama.

BEIJING (Reuters) - China has a stake in helping euro zone countries get through their debt crisis, Chinese Premier Wen Jiabao said in comments published on Sunday, pointing to Europe's importance as a market and hinting at more possible support for beleaguered exporters.

MUNICH (Reuters) - An Israeli raid on Iran's nuclear facilities would deliver a painful shock to the global economy, revive flagging Islamist militancy and possibly drag the United States into a regional war whether it backed its ally's attack or not.

KABUL (Reuters) - A secret NATO report showing the strength of confidence among the Afghan Taliban is raising concerns from Kabul to Washington that the militant group might overrun the country again when foreign combat forces finally leave.

LONDON (Reuters) - After a blockbuster January for both equities and bonds - rallies that caught many in the market by surprise - investors will be paying keen attention to the world's central banks in the coming week for signs of continued easy money.