UNEMPLOYMENT

U.S. lawmakers were close to a deal Tuesday on legislation that would boost the economy in the short term by extending a payroll tax cut for 160 million workers through this year and continue long-term jobless benefits, congressional aides said.

Euro zone finance ministers dropped plans on Tuesday for a special face-to-face meeting on Greece's new international bailout, as the cabinet in Athens argued up to the last minute on plugging a 325 million euro ($427 million)gap in its austerity plan.

President Barack Obama urged Americans to pressure their lawmakers in Washington to pass a payroll tax cut extension.

Sales at U.S. retailers climbed slightly in January as Americans took advantage of post-holiday promotions, and although Tuesday's data fell short of economists' median projection, it still provided yet another hopeful sign of a strengthening economy.

The European Union is likely to take action against Spain's newly installed government by May for delaying austerity measures ahead of a regional election next month, sources familiar with the situation told Reuters.

Output at factories in the euro zone tumbled in December, reflecting a sick European economy that probably shrank at the end of 2011 but it is hoped will recover this year.

The U.S. Federal Reserve should do all it can to reduce very high unemployment and bring inflation back up to more desirable levels, a top Fed official said on Monday.

Shares of Apple Inc. (AAPL) gained 1.86 percent during the day to close at $502.60 Monday after hitting a record $503.83 shortly after the opening bell.

Greek political leaders say the nation must accept yet more punishing austerity or face a social explosion, but after a night of violence and destruction in Athens, some people fear this explosion may already be about to begin.

Ratings agencies Fitch lowered its ratings on four big Spanish banks while Standard & Poor's cut its rating for the industry as a whole on Monday following recent sovereign downgrades and on concerns of funding difficulties and a weak economy.

House Republicans said Senate Democrats' refusal to accept spending cuts as a way to pay for a payroll tax cut extension has forced them to come up with a fallback plan to continue the popular proposal until after Election Day 2012.

There is another element to this ongoing drama – Greece’s resentment of Western Europe and the feeling that Greeks don’t feel like they are a part of Europe.

General Electric Co., the blue-chip U.S. conglomerate widely seen as a bellwether of the state of the American economy, is going on a hiring spree. The company is set to employ 12,000 new workers over the next five years, including 5,000 veterans hired through a special priority-placement program, GE said Monday.

Sales at U.S. retailers probably climbed in January as Americans bought more new cars and shoppers took advantage of post-holiday promotions, a sign that the U.S. economy is recovering, economists said before a report this week.

U.S. stock markets may begin the week with gains as stocks in Asia and Europe advanced after Greek parliament approved austerity measures demanded by Eurozone leaders to secure a bailout package and avoid a messy debt default.

The employment outlook in the UK is set to worsen as a third of private sector companies are planning to make redundancies.

The parliament of Greece has approved an austerity and debt-relief bill, crucial for the country to avoid bankruptcy while violence has spread across the nation as furious protestors are demonstrating in the streets.

Greek lawmakers late Sunday accepted terms of a deeply unpopular austerity plan that Eurozone leaders demanded as the price for financially rescuing the debt-choked nation.

Tens of thousands of protesters took to the streets in several nations this weekend demanding political justice, economic opportunity, and a change to the status quo. Demonstrators -- who powered the Arab Spring, the worldwide Occupy protests during the summer, and the anti-austerity marches of the European autumn -- are back on the streets in a winter of discontent.

Despite a mediocre earnings season and signs of an overbought market, Wall Street bulls are likely to remain in control this week.

A few months ago economists were all but certain the U.S. economy would slow sharply at the start of this year, with many warning that recession risks were growing.