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Morning Market Roundup: Greek Bond Swaps, U.S. Worker Productivity, Nat Gas in Markets


Here’s what’s important in the financial world this morning:

EU: Greece saw private investors' participation in a massive debt relief deal rise on Wednesday, bringing the country closer to avoiding a default that would plunge it into financial chaos and reignite the European debt crisis.

With a little over 24 hours left before the deadline for acceptances, private investors owning about 46 percent of Greece's privately-held debt have so far committed publicly to the bond swap.

For the deal to work - and for Greece to secure a related €130 billion ($171 billion) international bailout - Athens needs 90 percent of investors to sign up. However, a voluntary participation rate of around 70 percent could be enough to force most holdouts to go along.

The Institute of International Finance, which has been leading the debt talks for large private creditors, said firms holding €81 billion ($106 billion) of Greek bonds have agreed to the deal. The 30 firms include 12 banks and investment funds that already declared their participation on Monday as well as all major Greek banks.

On top of that, Greek Finance Minister Evangelos Venizelos said some €14 billion in bonds owned by Greek investment funds but managed by the central bank would also be added to the debt relief. Greek officials said they are hopeful that funds that directly manage another €3 billion in bonds would also sign up.

Under the deal, private creditors will swap their Greek bonds for new ones with a face value reduced by 53.5 percent, longer repayment deadlines and lower interest rates. Overall, they will lose some 75 percent on their bondholdings.

U.S.: Growth in U.S. worker productivity slowed at the end of last year, while labor costs rose. Fewer gains in worker output suggests employers must add workers if they want to meet higher demand.

The Labor Department said Wednesday that productivity rose at an annual rate of 0.9 percent in the October-December quarter. While that's a slight upward revision from last month's preliminary estimate, it's half the pace from the July-September quarter.

Productivity is the amount of output per hour of work. Worker productivity grew last year at the slowest pace in nearly a quarter of a century.

A slowdown in productivity is bad for corporate profits. But it can be a good sign for future hiring. It may mean that companies are unable to squeeze more work out of their existing work force and must add more workers if they want to grow.

Labor costs increased at a 2.8 percent rate in the fourth quarter. That's lower than the 3.9 percent rise in the third quarter, but much higher than the initial fourth-quarter estimate.

Natural Gas: More natural gas-powered vehicles will hit the market soon, as rising gasoline prices, booming natural gas production and proposed tax credits make them a more attractive option. But they're a long way from being a common sight in U.S. driveways.

Natural gas is appealing for a lot of reasons. It comes from domestic sources, for those concerned about importing oil. It produces 30 percent fewer greenhouse gas emissions than traditional gasoline or diesel. And it costs less than gasoline. Natural gas prices have dropped 18 percent so far this year, while regular gas prices are up 13 percent.

But U.S. buyers have been slow to adopt natural-gas vehicles, which make up less than one-tenth of 1 percent of the vehicles on American roads. Even the newest trucks aren't intended for average buyers. They're work trucks, capable of plowing snow and towing three tons or more.

Mary Barcella, director of North American Natural Gas research at consulting firm IHS CERA, said the economic benefits aren't compelling enough for most drivers. With gasoline prices of about $4 per gallon, it would take five years or more to recoup the extra cost of a natural gas vehicle. She thinks natural gas vehicles will only become more popular if pump prices rise and stay high for a long time.

The Associated Press contributed to this report.

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