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Treasuries pared losses as German and French finance ministers meet before a summit of regional leaders to discuss ways to contain the European debt crisis, stoking demand for government debt.

U.S. 10-year yields rose earlier on speculation record-low yields may limit demand as the government auctions $99 billion of coupon-bearing debt this week starting tomorrow. The U.S. will start this week

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A court in Germany ruled Wednesday that Microsoft infringed two patents held by Motorola, in a case that could affect sales of its popular Xbox 360 console and the Windows 7 operating system.

The patent spat between the two companies centers on technology used for video compression that is owned by Motorola Mobility Holdings Inc., which Google is in the process of buying for $12.5 billion.

Following earlier complaints from Microsoft and Apple Corp., the European Union’s competition watchdog has opened two separate probes into whether Motorola unfairly limited rivals from using its patents by demanding exorbitant fees.

In Wednesday’s ruling, the state court in the southern city of Mannheim upheld Motorola’s complaint on the patent breaches and declared Microsoft Corp. liable for unspecified damages.

The court also ordered Microsoft to remove all products that infringe the patents from the German market, including its Xbox 360 console and the Windows 7 operating system.

But both parties have seven days to appeal before the verdict comes into force, and Microsoft spokesman Thomas Baumgaertner said the company plans to do so. Should Motorola want the verdict enforced before a final appeals ruling is issued, it would have to deposit several tens of millions of euros (dollars) as a legal security, the court said.

A U.S. court meanwhile has warned Motorola not to enforce the German verdict until it too has considered the patent issue.

“At the moment, there is no risk that we will be ordered to halt sales,” Baumgaertner said.

He said Microsoft hoped the German court’s ruling could open the way for a fairer licensing deal with Motorola.

Motorola issued a statement welcoming the verdict.

“We remain open to resolving this matter,” said the company. “Fair compensation is all that we have been seeking for our intellectual property.”

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Delinquent taxes paid by Roberts brothers • Michael and Steven Roberts bought a little breathing room for their beleaguered Roberts Mayfair Hotel on Monday. Roberts Hospitality Services paid off delinquent state sales taxes on the Mayfair, and $15,000 toward a sales tax bond, according an order issued by Circuit Judge Joan Moriarty in a lawsuit filed by the Missouri Department of Revenue. The state last month sued to close two Roberts hotels — the Mayfair and their Comfort Inn in the Central West End — over $212,000 in unpaid taxes. The state is seeking a larger bond on the Mayfair. Taxes on the Comfort Inn are still outstanding. (Tim Logan)

Bakers Footwear sales drop • A company executive for St. Louis-based Bakers Footwear Group Inc. blamed a drop in sales and profit in the fiscal fourth quarter in part on a “difficult dress boot season.” Net income was $3.4 million, or 36 cents a share, in the quarter ended Jan. 28, compared with $5.2 million, or 54 cents a share, in the same period a year ago. Net sales dropped 8 percent, to $53.6 million. (Kavita Kumar)

Reliance posts a profit • Reliance Bancshares Inc no teletrack payday loan. swung to a profit in the first quarter, boosted by a $2.5 million gain from the sales of investment securities. The bank holding company posted a net income of $719,000, compared with a loss of $5.2 million a year earlier. Frontenac-based Reliance is the holding company for Reliance Bank, which has 20 local branches. (Gregory Cancelada)

Reinsurance Group adjusts accounting • Reinsurance Group of America reported first quarter income of $123.3 million, or $1.67 per share, compared with $148.9 million, or $2.02 per share, in the corresponding period last year. The company said amounts for last year were adjusted for the retrospective adoption of new accounting guidance for deferred acquisition costs. Consolidated net premiums rose 7 percent, to $1.86 billion, from $1.74 billion. Reinsurance Group, based in Chesterfield, is among the largest global providers of life reinsurance. (Tim Bryant)

Read more business news at stltoday.com/business

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The World Bank plans to select its next president by the time of its spring meetings in late April, it announced Friday.

The bank’s 25-member executive board said it will accept nominations until March 23.

The board said it will choose up to three candidates to interview. It wants to finalize its selection by the time of the April 20-22 meetings of the World Bank and its sister lending organization, the International Monetary Fund.

Robert Zoellick, the current World Bank president, announced Wednesday that he will step down when his five-year term ends June 30.

Since the IMF and the World Bank were created, the top IMF job has always gone to a European, and the World Bank post has gone to an American.

But China, now the world’s second-largest economy, and other emerging economic powers such as Brazil and India have argued that they, too, deserve consideration for the leadership of the two organizations.

The IMF and World Bank have adopted new selection guidelines aimed at ensuring a more open process. But in June, when the IMF chose a new leader, it selected another European, Christine Lagarde.

Lagarde, then the French finance minister, was chosen after Dominique Strauss-Kahn abruptly stepped down from the IMF after being charged with attempted rape. The charges were later dropped.

Treasury Secretary Timothy Geithner said Wednesday that the Obama administration would put forward a candidate for the World Bank post. But he didn’t say whether the administration would consider promoting a non-American. Geithner said the United States wanted the World Bank’s board to engage in an “open and expeditious” process.

Two Americans who have been mentioned for the post are Secretary of State Hillary Clinton and former Treasury Secretary Larry Summers. Clinton’s spokeswoman said Wednesday that Clinton isn’t interested in the job.

The United States has the largest voting share on the World Bank board. That gives it a dominant voice in deciding who will lead the institution, a major provider of development loans to poor nations.

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The leaders of Germany and Italy sought to present a united front Wednesday in the fight to resolve the eurozone debt crisis and revive the ailing European economy.

German Chancellor Angela Merkel praised the efforts of Italian Prime Minister Mario Monti to cut government spending and make his nation’s economy more competitive.

"We have followed with great respect how quickly the measures are being implemented," said Merkel. "The work of the Italian government is being honored."

Monti said Italians support a "very hard series of measures," adding that Europe "doesn’t have to fear any more that Italy is a possible source of contagion."

Italy has been a big worry for global investors in recent months. The nation’s economy has been stagnant for a decade and its borrowing costs have ballooned, raising concerns about the government’s solvency.

Monti acknowledged that high interest rates could have been justified when market participants were uncertain about Italy’s economic policies. "But not anymore," he said, adding, "especially after representatives of those same markets have said they appreciated the efforts [Italy] made."

That assertion will be put to the test this week when the Italian government will offer €8.5 billion in bills Thursday and up to €4.75 billion in bonds Friday.

On Wednesday, yields on 10-year Italian bonds eased, but still held above the key 7% threshold.

Europe’s debt crisis: An end in sight? Not so fast

The meeting in Berlin between Merkel and Monti was the latest in a series of talks this week among top European Union leaders as they piece together a solution to the long-running government debt and banking problems in the eurozone.

Merkel met with International Monetary Fund director Christine Lagarde late Tuesday and French President Nicolas Sarkozy Monday. Lagarde will meet with Sarkozy later Wednesday in Paris.

Merkel and Sarkozy will travel to Rome for more talks with Monti on Jan 20. Then, the top leaders of all 27 members of the EU will gather in Brussels on Jan. 30 for their first summit of the year.

On Wednesday, Merkel and Monti discussed the situation in Greece, where Prime Minister Lucas Papademos is under pressure to push through reforms needed to secure additional bailout funds.

Merkel said the first step in resolving the debt crisis is to "create the preconditions" for a second bailout for Greece fast payday loan.

EU leaders agreed in October to provide a second €130 billion rescue package for Greece and announced a deal with private sector investors to voluntarily write down the value of Greek government bonds by 50% as part of a debt exchange.

But negotiations with the private sector have stalled and there is still disagreement among some policymakers over whether requiring Greece to enact more austerity as a condition of a second bailout will help or hurt the nation’s fragile economy.

"The talks with banks are being pushed so that the question of Greece can be solved rationally, so that we can then focus on structural reforms in the euro zone as a whole," said Merkel.

Europe: Still a huge pain in the neck for investors

Still, European leaders are optimistic that a proposed fiscal compact, designed to ensure that governments do not spend beyond their means and rack up unsustainable debts, will be signed by the end of the month.

"There is work to be done but there is a good chance that we can expect significant progress or a political conclusion already on Jan. 30," said Merkel.

The terms of the pact include, among other things, a balanced budget requirement with an "automatic correction mechanism," and a provision to make national budget policies subject to EU authority "ex ante," or before the fact.

The political leaders of the 17 eurozone nations, which share the embattled single euro currency, agreed in principle to abide by the pact following a summit on Dec. 9. But the agreement is still subject to parliamentary approval in some member states.

Merkel also suggested that Germany, the eurozone’s largest economy, could commit more capital to the European Stability Mechanism, which is expected to come into effect this year.

But Merkel was careful to say that Germany would contribute more capital to the fund only if necessary and other eurozone governments do the same.

The ESM would enhance or replace the eurozone’s current bailout fund, known as the European Financial Stability Facility. European leaders have said they will decide in March on a proposal to put more capital into the €500 billion ESM.

– CNN’s Diana Magnay contributed reporting from Berlin. 

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European stock markets headed higher in early trading Monday, while South Korea’s benchmark Kospi closed flat following the New Year’s holiday weekend.

Britain’s FTSE 100 index rose 0.1 percent at 5,572.28. Germany’s DAX was 1.1 percent higher at 5,960.04. France’s CAC-40 rose 0.5 percent to 3,174.76.

South Korea’s Kospi index, which lost 11 percent of its value last year, closed nearly unchanged at 1,826.37. Most other Asian markets were closed for an extended New Year’s holiday.

South Korea’s tech sector move higher, with Samsung Electronics up 2.1 percent and LG Electronics gaining 2.3 percent. Steel giant POSCO slid 1.1 percent and Korea Electric Power shed 1.8 percent.

Taiwan’s TAIEX, which was also open for business Monday, fell 1.7 percent to 6,952.21. Foxconn Technology, the world’s biggest contract electronics manufacturer, which makes iPads and iPhones for Apple Inc., fell 0.9 percent. Personal computer maker Acer Inc. shed 2.3 percent.

Benchmarks in the Philippines and India rose while Indonesia fell.

The Asian-Pacific region’s major benchmarks, including Japan’s Nikkei 225 index, Hong Kong’s Hang Seng Index and Australia’s S&P ASX 200, were closed. Markets in the U.S. are also closed in observance of New Year’s Day.

Last year was one that traders would prefer to forget: most Asian equity indexes closed out 2011 deeply in the red unsecured personal loans. The Nikkei in Tokyo ended the year at 8,429.45 _ its lowest closing since 1982.

China’s benchmark Shanghai Composite Index, closed Monday, endured a 21 percent loss for the year as the impact of Beijing’s multibillion-dollar stimulus faded and the government tightened curbs on lending and investment to cool blistering economic growth.

Hong Kong’s Hang Seng Index finished at 18,434.39 _ a precipitous slide of 19.7 percent from a year ago. Singapore’s Straits Times Index took a 17.5 percent dive when it closed at 2,646.35 on Friday.

Australia’s benchmark S&P ASX 200 ended the year at 4,140.4 _ 14.5 percent lower for 2011.

India’s benchmark Sensex index fell more than 22 percent in 2011, making it one of the worst performers globally. The rupee also lost about 14 percent this year and recently hit an all-time low, breaching 54 rupees to the dollar.

In hopes of reducing volatility and attracting foreign cash, India announced Sunday that it would allow individual foreign nationals to invest directly in its stock market starting Jan. 15. Currently, foreign investors are limited to indirect investments such as mutual funds.

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ST. LOUIS

Stocks wavered in midday trading Friday as investors balanced signs of future growth in the U.S. economy with a looming deadline for Congress to reach a deal in debt talks.

The Conference Board’s index of leading economic indicators rose more than Wall Street analysts were expecting, a sign that the economy may pick up in the coming months. But many investors remained cautious as a key Congressional committee remained deadlocked on ways to cut the U.S. deficit.

A bipartisan panel must agree on making at least $1.2 trillion in deficit cuts by Thanksgiving. If the committee fails, automatic spending cuts will take effect beginning in 2013. Economists worry that a deadlocked Congress will erode business confidence and slow the already-fragile economy.

The Dow Jones industrial average was down 3 points, or less than 0.1 percent, to 11,768 as of 12:10 p.m. Eastern.

The Standard and Poor’s 500 index fell 4, or 0.3 percent, to 1,213. The Nasdaq composite slid 18, or 0.7 percent, to 2,569.

The Dow had been up as much as 84 points in early trading after borrowing costs fell for Italy and Spain. That is a signal that bond investors are less fearful of a default by those countries. Spain and Italy have had to pay high interest rates because bondholders fear that that they will default. Holders of Greek bonds were all but forced to take steep losses on that nation’s debt.

Europe’s debt problems are far from settled, however. Comments by German and British leaders Friday suggested that they have divergent views on how to address the debt crisis. German Chancellor Angela Merkel cautioned against expecting too much from the region’s leaders. British Prime Minister David Cameron called for “decisive action” to shore up the struggling currency union.

Positive economic reports this week _ including a drop in unemployment applications and an increase in industrial production _ barely budged markets because a European meltdown would easily drag down the U.S. economy, said Kim Caughey Forrest, equity research analyst at Fort Pitt Capital Group.

“Our economy might be improving, but the fixation is on what’s going to happen with the world banking system if defaults happen in Europe,” she said. She said investors are reluctant to take big positions because no one knows how Europe’s problems will be resolved, or how U.S. companies’ future profits will be affected.

In corporate news, ketchup maker H.J. Heinz Co. fell 2.5 percent after it said its second-quarter net income fell almost 6 percent, although its adjusted results narrowly beat expectations. Sales in emerging markets remained strong, and price hikes in other areas helped offset lower volumes.

Retailer Gap Inc. slid 3.5 percent after its third quarter revenue came in slightly below Wall Street’s forecasts. The company said materials costs are continuing to eat into profit margins. Salesforce.com plunged 9 percent after its quarterly results came in below estimates.

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Investor Warren Buffett says his company bought $10.7 billion of IBM stock this year, about a 5.6 percent stake.

Buffett revealed the new investment during an interview on CNBC Monday. Buffett’s company, Berkshire Hathaway Inc., will file a full quarterly update on its U.S. stock portfolio Monday afternoon.

Buffett has long refused to invest in high-tech companies because he it’s too difficult to predict which technology businesses will prosper in the long run.

Buffett says he recently changed his view of IBM’s role in industry. So Berkshire bought about 64 million shares since March, or about 5.6 percent of IBM.

Buffett says he believes IBM has a sound plan for the future.

IBM shares rose $1.62 to $189 in premarket trading after rising as high as $190.55 earlier.

Besides investments, Berkshire owns roughly 80 subsidiaries including insurance, railroad and utility firms.

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Spanish telephone company Telefonica said Friday it lost euro429 million ($584 million) in the third quarter, its first quarterly loss in nine years, after hefty costs laying off workers in Spain’s moribund economy.

It compared to profits of euro5.1 billion in the same period of 2010, although that figure included a one-off gain from Telefonica’s takeover of Brazilian cell phone company Vivo.

Telefonica said the third quarter 2011 results included costs of euro1.87 billion in compensation for workers being laid off in Spain.

Revenue in Spain for the quarter was down 8.8 percent. But total revenue for the quarter _ in Spain and all the countries where Telefonica operates _ was up 3.7 percent to euro15.8 billion no fax payday advances.

The poor performance in Spain was offset by a 17.5 percent rise in revenue in Latin America.

Telefonica is eliminating up to 6,500 jobs, or close to 20 percent of its work force, in Spain through 2013 to reduce costs.

Telefonica’s profits for the first nine months of the year were down 69 percent to euro2.73 billion, again in part because of redundancy costs. Revenue for the January-September period rose 5.4 percent.

Telefonica shares were practically unchanged at euro13.9 in early trading.

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