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BUSINESS BRIEFLY

Short-term T-bill rates at highest level in 16 months

WASHINGTON (AP) -- Interest rates on short-term Treasury bills rose in Monday's auction, with the rate on three-month bills hitting its highest level in 16 months.

The Treasury Department auctioned $29 billion in three-month bills at a discount rate of 0.180 percent, up from 0.130 percent last week. Another $28 billion in six-month bills was auctioned at a discount rate of 0.225 percent, up from 0.185 percent last week.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,995.45 and the six-month bill sold for $9,988.63. That would equal an annualized rate of 0.183 for the three-month bills and 0.228 for the six-month bills.

Separately, the Federal Reserve said Monday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, held steady at 0.30 percent last week, unchanged from the previous week.

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AT&T expanding Wi-Fi

NEW YORK (AP) -- AT&T Inc. is expanding Wi-Fi access for its subscribers in New York City and introducing it in San Francisco, adding data capacity in two cities with heavy wireless network use from the iPhone and other devices.

The phone company is to announce Tuesday that it will expand Wi-Fi hot spots in New York's Times Square just ahead of New Year's revelers cramming there for the annual countdown to midnight. It is also deploying its first hot spots in a public, outdoor area of San Francisco, the Embarcadero waterfront district.

For years, AT&T has operated a wide network of hot spots in hotels, airports, Starbucks coffee shops and other indoor locations. The new "hot zones," as AT&T calls them, are different in that they cover public, outdoor spaces and cluster together many access points to cover a larger area.

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Ally to settle mortgage deal

NEW YORK (AP) -- Ally Financial Inc. says its mortgage unit will pay $462 million to settle buyback claims on $292 billion in home loans that it sold to Fannie Mae before the industry tightened underwriting standards in the wake of the financial meltdown.

GMAC Mortgage, which is part of Ally's Residential Capital unit, originates and services loans then sells them to government-sponsored mortgage companies Fannie Mae and Freddie Mac. As part of their repurchasing deals, Fannie and Freddie have the option to go back and challenge Ally's underwriting standards. If successful, they could force Ally to buy back the loans in question.

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Tesla stock falls 15%

Tesla Motors Inc., the unprofitable electric-car maker, fell the most since July after insiders were allowed to sell shares in the company.

Tesla shares fell $4.54, or 15 percent, to $25.55 on Monday, the steepest drop since July 6.

The end of the lock-up period on Dec. 25 allows Tesla's early investors to sell for the first time since the company's June 28 initial public offering. Other holders may have sold in anticipation of insiders' sales, said Carter Driscoll, senior analyst for clean technologies with Miami Beach, Fla.-based Capstone. His long-term price estimate is $22 a share.

The Department of Energy loaned Tesla $465 million in March in part to develop its second electric car, the Model S sedan. The car is due to market in 2012.

-- Bloomberg News

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Cubans aided by policy shift

HAVANA (AP) -- Cubans who rely on remittances from abroad are hailing a U.S. policy change that means they now can receive transfers in the island's convertible currency instead of dollars, sidestepping a 10 percent exchange surcharge.

Western Union said an arm of the U.S. Treasury Department authorized it to pay remittances in Cuba's convertible peso, or CUC, starting Dec. 20.

Previously, the Treasury Department's Office of Foreign Assets Control required dollar transfers to Cuba to be paid out there in dollars, forcing recipients to pay the 10 percent fee that the Cuban government imposes on cash dollar-to-CUC exchanges.

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