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Ratings agency Standard & Poor’s has downgraded the government debt of France, Austria, Italy and Spain by one notch, but maintained Germany’s at the coveted ‘AAA’ level.

The cuts, which eliminated France and Austria’s triple-A status, deal a heavy blow to the currency union’s ability to fight off a worsening debt crisis.

Italy was lowered to BBB+ from A. Spain slipped to A from AA-.

The downgrades come as crucial talks on cutting Greece’s massive debt pile appeared close to collapse Friday.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

PARIS (AP) _ Ratings agency Standard & Poor’s has downgraded the government debt of France, Austria, Italy and Spain by one notch, but maintained Germany’s at the coveted ‘AAA’ level.

The cuts, which eliminated France and Austria’s triple-A status, deal a heavy blow to the currency union’s ability to fight off a worsening debt crisis.

Italy was lowered to BBB+ from A. Spain slipped to A from AA-.

The downgrades come as crucial talks on cutting Greece’s massive debt pile appeared close to collapse Friday.

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The Federal Reserve is making the most of its tools to boost the economy, and there is evidence they have worked, a top Fed official said on Tuesday.

Cleveland Federal Reserve President Sandra Pianalto, a voter this year on the central bank’s policy-setting committee, said she “will continue to weigh the costs and benefits of further policy actions.”

Pianalto, considered on the dovish wing of the Fed more concerned with bringing down high unemployment, said she expects the economy to grow around 2.5 percent this year, and about 3 percent in 2013, making for a “moderate” recovery.

Though in the past she forecast 2-percent inflation for the next two years, in her first speech of the year Pianalto said she expects inflation to dip below that level during the first half of 2012.

The Fed late in 2008 slashed interest rates to near zero and has since bought $2 payday loans guaranteed no fax.3 trillion in long-term securities to spur growth and keep the economy afloat, in response to a deep recession and financial crisis.

Recent data from employment to manufacturing to consumer credit suggest the world’s largest economy gained momentum going into 2012, though the high 8.5 percent unemployment rate, a slow housing market recovery and the European debt crisis still pose risks.

“I have supported our policy decisions, and there is evidence that they have been effective,” Pianalto said.

“While it is true that the federal funds rate has been near zero for some time, some economic policy models indicate that monetary policy should be even more accommodative than it is today,” she added.

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Service industries in the U.K. grew at the fastest pace in five months in December and strengthened in the U.S., suggesting their economies are partly withstanding the euro-area debt crisis.

A gauge of U.K. services activity based on the survey of purchasing managers (PMITSUK) rose to 54 from 52.1 in November, Markit Economics and the Chartered Institute of Purchasing and Supply said today in London. A U.S. services index rose to 52.6 in December from 52 the previous month.

The data suggest the U.K. economy strengthened in December after surveys earlier this week showed construction and manufacturing improved. Still, the euro-area crisis is clouding the outlook for the global recovery. The Bank of England said today banks may toughen loan terms because of the debt turmoil, hampering growth, while some Federal Reserve officials have said prospective economic conditions may warrant

Germany’s finance minister says he is confident that Europe’s politicians will manage to stabilize the eurozone in 2012 and keep the continent’s common currency together.

Wolfgang Schaeuble acknowledged in an interview with business daily Handelsblatt published Friday that major problems that have built up over a long time remain to be tackled in some countries.

However, he added, “I think we will be far enough along in the next 12 months that we will have banished the dangers of contagion and stabilized the eurozone.”

Asked whether he could rule out the 17-nation eurozone breaking up, Schaeuble was quoted as saying: “According to everything that I know at the moment, yes.” He insisted that Europe’s politicians “are doing everything to prevent the common currency falling apart.”

“Of course, the European Union cannot force anyone to stay in if they don’t want to belong any more,” he added. “But no such development can be seen at the moment.”

Germany, Europe’s biggest economy, is a key player in the long-running battle to stem the eurozone debt crisis. It has backed the strategy of getting governments to embark on often-savage austerity measures to reduce deficits.

But it has opposed measures such as issuing jointly backed eurobonds and argued that there is no quick fix to the crisis, expressing great skepticism about the wisdom of a major government bond-buying drive by the European Central Bank that is advocated by many as a way of forcing down struggling countries’ borrowing costs guaranteed fast personal loans.

“The talk of bazookas and the like only leads to us not tackling sustainably the causes of the crisis,” Schaeuble was quoted as saying.

The eurozone will quickly face new challenges in 2012, with both Italy and Spain needing to borrow large amounts of money early in the new year. Both countries face high borrowing costs.

Schaeuble acknowledged that Europe’s refinancing needs in early 2012 are “not trivial.”

“But the more we win back confidence on the markets, the more investors … will invest in the eurozone, and not just in German bonds,” he said. “There is no shortage of money worldwide.”

“In case of doubt, a somewhat higher interest rate has to be paid for some government bonds,” Schaeuble said. “That is not damaging per se and also can encourage the understanding that we have to tackle the actual causes of the crisis: overly high debts and a lack of competitiveness.”

Schaeuble said he sees no sign of a credit crunch in Germany. Asked about other countries, he pointed to the ECB’s moves to provide massive long-term loans to banks.

“Given the measures the ECB has taken to provide banks with liquidity, it is hard to imagine that banks would not be in a position to provide sufficient loans to business,” he said.

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The owner of the recently renamed Fontainebleau Apartments for Seniors in University City are trying to take it back to the future. Brentmoor Retirement Communities restored the complex’s original name this month, and it is renovating its older apartments and offering residents more economical rental plans.

“You’ll pay only for what you want,” said Denise Niemann, Fontainebleau’s executive director. “We came up with this concept in response to our seniors’ financial woes.”

Until this year, residents of the apartments at 1001 North Mc-Knight Road, known as Brentmoor Place before the switch, were required to buy a full independent living package that included some meals and activities fees. Monthly rental fees were at least $2,000.

Options still include transportation, housekeeping and parking, for those residents who drive. But the recession has had several residents worried that they wouldn’t be able to make their payments and might have to move, Niemann said.

The new a la carte pricing allows residents to skip the meals and other extras if they desire. Apartments at Fontainebleau now are available for as low as $1,390 a month.

When the Fontainebleau complex was built nearly 50 years ago, it was marketed as an upscale apartment building for everyone. But by the mid-1990s, nearly 90 percent of its residents were over age 70, and it was being advertised as a senior living complex for independent older people.

The property, acquired in 1996 by Brentmoor Retirement Communities, was renamed Brentmoor Place and converted to a seniors-only, limited-service retirement community business card.

By 2007, Brentmoor Place had become an all-inclusive, full-service community, providing meals, transportation and housekeeping for its residents.

Now, the a la carte pricing allows options while maintaining a social environment for residents, who are required to be at least 62 years old.

Niemann said Fontainebleau’s age gives it one distinctive advantage over many newer buildings. “This is a concrete building, so you hear almost no noise from other apartments,” she said. “It’s built like Fort Knox.”

She said that the apartment complex had been known over the years for its social programs and activities and that those would continue. “It’s brain-stimulating; it’s computer classes and trivia events, for example,” she said.

A group of men who live there organized the MOB group, short for Men of Brentmoor, several years ago. “They get out at least once a month and go to places like Crown Candy Kitchen and other St. Louis landmarks,” Niemann said.

A longtime MOB member, Mark Margolies, is a resident coordinator for group activities and helps other residents resolve any concerns. “It gives me something to do,” said Margolies, 75.

He said he has enjoyed living there. “I have no complaints,” he said. “I like the convenience of the apartments, the location and the staff.”

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Last minute shoppers gave merchants a solid lift during the final week before Christmas, according to a report from a mall trade group Wednesday.

Revenue at stores open at least a year rose 0.9 percent for the week ended Saturday compared with the previous week. That is also up 3.4 percent from the week before, according to the International Council of Shopping Centers-Goldman Sachs Weekly Chain Store Sales Index.

Revenue at stores opened at least a year for the week ended Saturday rose 4.5 percent compared with the same period a year ago. The index serves as a sales proxy to 24 major stores including Macy’s Inc. and Costco Wholesale Corp.

“The downs and ups were much more accentuated,” said Michael P. Niemira, chief economist at the council. “It just shows how cautious the consumer is. Consumers are bargain hunters more today than ever before personal loan for poor credit.”

For the week ended on Nov. 26, which included the traditional start of the holiday shopping season on the day after Thanksgiving, stores had the biggest sales surge compared with the prior week since 1993, according to the ICSC-Goldman Sachs weekly index. The cumulative two-week-sales drop-off that followed marked the biggest percentage decline since 2000. Then, during the final two weeks before Christmas, sales surged again, by the highest rate since 2005, Niemira says.

“The holiday season was good but uneven,” Niemira said.

ICSC expects that holiday sales for the November and December combined will be in line with its forecast of 3.5

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Hundreds of laid-off workers massed Friday outside a Shanghai factory of a Singaporean supplier to major consumer electronics companies such as Motorola and HP _ the latest in a spate of labor unrest in China as manufacturers struggle with higher costs and slowing exports.

Reports of recent strikes at factories and other major employers show the increased pressure on China’s manufacturers and workers amid weak demand in Europe and the U.S. that comes on top of surging costs for labor and materials. The country’s manufacturing contracted in November for the first time in nearly three years, according to a survey released Thursday.

A nervous Beijing has begun reversing a two-year effort to cool the world’s second-biggest economy, seeking to counter slowdowns in factory production and property that are dragging growth lower and spurring unrest.

Some of the 300-400 workers at the factory gate of Hi-P International in the eastern industrial suburbs of Shanghai said it was their third day of protesting over mass layoffs due to the company’s decision to relocate some manufacturing.

They said they were seeking more information, and improved terms for themselves.

A group of the workers, bundled up against the cold, held up a banner demanding: “We want an explanation! We want truth! Where is Hi-P’s truth? Where is the government’s credibility?”

Workers also accused the factory of violating labor standards.

“Sometimes, they ask us to work 18 or 19 hours in a day. Sometimes the overtime is even longer than a normal 8-hour work day,” said Tao Yong, a worker in his mid-30s.

Police in vans and unmarked cars watched but did not intervene. One worker showed bruises he said were from an earlier beating by police.

Company officials contacted by phone in Shanghai and Singapore refused comment on the protest. Shanghai city government and police also did not immediately respond to inquiries about the strike or the workers’ claims of injuries from scuffles with police.

“We all work for this company, and now if the company is going to move, they owe us an explanation. So we are waiting for a solution,” said Chang Yan, a woman in her mid-20s who like most of the others was wearing a blue factory uniform embossed with a red Hi-P logo.

Reflecting the tougher times for manufacturers, Hi-P International’s net profit margin plunged 80 percent from a year earlier in third quarter to 2.1 percent from 11.6 percent _ mainly due to higher costs. Net profit in July-September fell 42 percent to 6.5 million Singapore dollars ($5.1 million) from a year earlier, according to its latest financial report.

The company, founded in 1980 as a tooling factory, said its third-quarter revenue rose 34 percent, but so did costs for materials and taxes.

The New York-based group China Labor Watch said Hi-P was shifting some of its production to the nearby city of Suzhou and had not paid the legally required amount of compensation to workers, who were laid off without notice.

According to its website, Hi-P International is a contract manufacturer for the wireless telecommunications, consumer electronics and computing and automotive industries, with two-dozen factories and about 18,000 employees.

Hi-P has factories in five other Chinese cities besides Shanghai and Suzhou. Motorola and other major electronics companies are among its customers.

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Stocks are opening sharply higher after a strong start to the U.S. holiday shopping season and signs that Europe is getting its debt crisis under control.

Initial reports show a record number of shoppers hit the mall or bought gifts online over the holiday weekend.

Investors are also hoping that recent deterioration in Europe’s debt crisis will get the region’s leaders to agree on a package of measures that can ease market concerns over whether the euro currency itself can survive.

The Dow Jones industrial average is up 274 points, or 2.4 percent, at 11,506 shortly after the opening bell Monday.

The Standard & Poor’s 500 index is up 29, or 2.6 percent, at 1,188. The Nasdaq composite is up 70, or 2.9 percent, at 2,512.

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A string of bombings in a southern oil city killed 19 people Thursday evening and injured dozens more, a grim sign of the security challenges Iraq will face after American troops go home.

The U.S. military is drawing down its troops ahead of an end-of-December deadline to have all American forces out of the country. Incidents like Thursday’s triple bombing in a city seen as key to Iraq’s economic development show the dangerous prospects awaiting Iraqis next year.

Three bombs went off in a popular open-air market in Basra, police and health officials said.

The third bomb exploded a few minutes after Iraqi army and police forces arrived on the scene in response to the earlier blasts, officials said. The third blast caused all the fatalities and almost all of the injuries, the officials said.

Among the dead and wounded were many policemen and Iraqi army soldiers.

The police officials spoke on condition of anonymity because they were not authorized to speak to reporters.

Kamal Ali was working at a clothing shop across the street when the blasts went off. He said after the first explosion, bystanders rushed to help the victims. When another blast went off about five minutes later, the terrified people ran to escape.

Then police and soldiers rushed to the scene before the third and most deadly bomb went off.

“Most of the casualties are police and Iraqi troops who rushed to help the victims and cordoned off the scene no fax pay day loan. They sacrificed their lives for the poor people,” Ali said.

The head of the Basra provincial council, Ahmed al-Sulaiti, confirmed the incident.

“We can’t blame the security forces for this act. They were the people most hurt,” he said by telephone from Basra.

Basra is about 340 miles (550 kilometers) southeast of Baghdad It is considered the center of Iraq’s burgeoning oil sector.

Many foreign oil companies have offices there. The country is relying on foreign companies to bring the money and expertise needed to develop Iraq’s vast oil sector, which has been ravaged by war, sanctions and neglect.

There was no immediate claim of responsibility for the bombings, and it was not clear whether it was the work of Sunni extremists like al-Qaida, or by Shiite militias. Sunni militants often stagger their blasts in order to cause the most carnage, and they often target security officials, whom they see as propping up the Shiite-led government.

The area where the blasts occurred is also a stronghold for Shiite militia members, who have been known to use violence as they jockey for power and control.

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Associated Press writers Mazin Yahya and Rebecca Santana in Baghdad contributed to this report.

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