TOPWRAP 8-Job loss, mixed bank news show long road to recovery

* Obama meets with credit card companies
* U.S. Treasury prepares for Chrysler bankruptcy - report
* Euro zone businesses report slower downturn
* Credit Suisse Q1 profit twice as big as forecast
* U.S. markets boosted by strong earnings
(For full crisis coverage, click on [nCRISIS])

By Jessica Hall
PHILADELPHIA, April 23 (Reuters) - Higher-than-expected
U.S. unemployment claims and mixed news on banks on Thursday
suggested the global recession is far from over despite a
survey that found euro zone businesses cautiously optimistic
about next year.
But on the eve of a G7 finance ministers meeting in
Washington, Wall Street stocks ended higher on surprisingly
strong earnings from companies including oil major
ConocoPhillips and regional bank Fifth Third Bancorp
. European stock indexes vacillated, held back by
anxiety about the overall health of the banking sector and poor
results from Swiss engineering group ABB. [nN23314986]
After the closing bell, shares of tech heavyweights
Amazon.com and Microsoft gained on
stronger-than-expected earnings, largely helped by cost-cuts.
Still, investors were bracing for the results of "stress
tests" ordered by U.S. regulators to determine if banks were
adequately capitalized to withstand a deeper recession.
U.S. banks including Bank of America Corp , JPMorgan
Chase & Co and Wells Fargo & Co may need to
raise $1 trillion of capital, Keefe, Bruyette and Woods
analysts said in a report. [nBNG493083]
Former Federal Reserve Chairman Paul Volcker, an economic
adviser to the Obama administration, urged banks to focus more
closely on core lines of business and suggested possibly
barring banking organizations from sponsoring hedge funds.
[nWBT011108]
President Barack Obama met with executives from top credit
card companies and urged them to stop unfair rate increases and
be more transparent and accountable.
Obama said he wanted legislation being considered by
Congress to protect consumers against unfair rate increases and
ban "abusive fees and penalties." [nN23328217]
The New York Times, meanwhile, reported that the U.S.
Treasury was preparing a Chapter 11 bankruptcy filing for
Chrysler LLC that could come as soon as next week. A source
told Reuters that Chrysler's lenders were preparing to make
another counteroffer to the Treasury Department by Friday on
reducing the U.S. automaker's debt.
Chrysler has until the end of the month to reach agreements
for an alliance with Italy's Fiat SpA , a reduction in
secured debt and resolution of labor issues with its unions.
[nWEN7744]

MIXED SENTIMENT
Overall, sentiment across the globe was mixed as the U.S.
reported higher unemployment numbers, while euro zone
manufacturing and service sector companies gave significantly
less downbeat reports than economists had expected.
Markit's Purchasing Managers' Index showed business in the
region contracted at its slowest pace in six months in April
and there was overall optimism about conditions 12 months from
now.
Pockets of upbeat news included Credit Suisse,
Switzerland's second largest bank, smashing first-quarter
profit forecasts, and Britain's Barclays Plc saying it intends
to resume dividend payments.
World Bank President Robert Zoellick said on Thursday
nearly half of the Group of 20 nations are considering or have
taken measures to restrict trade in the face of an economic
downturn. [nN23329651]
Zoellick said that while there is a lot of uncertainty
around the global financial crisis, "you definitely want to do
everything you can to avoid negative shocks," including a
retreat to protectionism, which could worsen the situation.

U.S. UNEMPLOYMENT CLAIMS RISE
In the United States, initial claims for unemployment
benefits increased to a seasonally adjusted 640,000 last week,
above forecasts, and the total number of people receiving
jobless benefits rose to a record high, the Labor Department
said. [nN23310344]
Another dose of negative news came as sales of existing
homes in the United States fell 3 percent in March to a much
lower-than-expected annual rate of 4.57 million units, the
National Association of Realtors said. [nN22540525]
Package-delivery company United Parcel Service Inc
reported a lower-than-expected first-quarter profit on Thursday
as businesses and consumers shipped fewer packages because of
the global economic downturn. The U.S. economic bellwether also
gave a second-quarter outlook below analysts' expectations.
[nN22253727]
Bank of America came under scrutiny again.
The Wall Street Journal reported that Chief Executive
Kenneth Lewis testified under oath that Fed Chairman Ben
Bernanke and then-U.S. Treasury Secretary Henry Paulson had
pressured him to keep quiet about losses at Merrill Lynch & Co,
which the bank was buying.
A government source told Reuters that the Federal Reserve
gave no advice to Bank of America or Lewis on any questions of
disclosure. [nWBT011101]

'PAST THE CRISIS STAGE'
Despite the negative data, a top U.S. regulator said on
Thursday that banks and the U.S. housing market are past the
crisis stage and are now on a path to recovery.
"I think we're past the crisis stage; we're in the clean-up
stage now," Sheila Bair, chairman of the Federal Deposit
Insurance Corp, said at a financial reform conference.
[nN23310320]
(Reporting by Reuters bureaus worldwide; Editing by Chizu
Nomiyama and Steve Orlofsky)
((jessica.hall@thomsonreuters.com; Tel: 215-922-1086; Reuters
Messaging: jessica.hall.reuters.com@reuters.net))
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Keywords: FINANCIAL/

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