(02-06) 06:46 PST NEW YORK, (AP) —

Treasury prices fell Wednesday after a report showed workers producing at a stronger-than-forecast pace and labor costs in check at the end of 2007.

The Labor Department said productivity grew by an annual rate of 1.8 percent in the fourth quarter. The result was down significantly from the 6 percent advance seen in the third quarter, but well above the 0.5 percent gain projected in a Thomson/IFR analysts poll.

Unit labor costs, a key inflation gauge monitored by the Federal Reserve, advanced 2.1 percent in the final quarter, below the 3 percent rise projected by Thomson IFR.

Productivity usually drops off when the economy slows down because companies are left with too many workers for the amount of work on hand. Some economists will use the news to support a case that the economy has entered a recession.

Although Wall Street suffered a case of fright due to recession fears on Tuesday that caused a massive stock selloff, the latest report did not deter investors from trying to send stocks higher at Wednesday’s opening.

The expected gains for stocks put pressure on Treasurys as the two markets often trade in opposite directions.

The benchmark 10-year Treasury note fell 11/32 to 105 9/32 with a yield of 3.60 percent, up from 3.56 percent late Tuesday.

The 30-year long bond declined 20/32 to 110 16/32 with a 4.36 percent yield, up from 4.33 percent late Tuesday.

The 2-year note lost 3/32 to 100 11/32 with a yield of 1.95 percent, up from 1.92 percent late Tuesday.

Selling pressure on bonds Wednesday was compounded by the fact the Treasury Department will auction $13 billion in new 10-year Treasury notes in the afternoon. Institutional investors often lighten their Treasury holdings ahead of an auction to make room in their portfolios for new supply.

The Federal Reserve will hold its next regular monetary policy meeting on March 18, but many investors expect the central bank to order another rate cut before then.

The Fed in January cut rates by an unusually large 1.25 percentage points late last month, but many investors think additional easing is needed and the bank has indicated it is willing to reduce the fed funds target down further.

Trading of fed funds futures contracts Wednesday indicated investors think there is a 50 percent chance for a 0.25 percentage point reduction in February.

NEW YORK: U.S. stocks were expected to rise at the opening Wednesday, after Asian markets fell heavily. European stocks were mostly higher.

U.S. investors were cheered by better-than-expected profit results from Walt Disney. Disney posted a 26 percent decline in profit late Tuesday, but the results beat expectations. The company - one of the 30 companies that make up the Dow Jones industrials - reported a 9 percent rise in revenue, thanks in part to the success of brands such as ESPN, “High School Musical” and “Hannah Montana.”

Disney shares rose more than 5 percent in premarket trading.

Earlier Wednesday, the benchmark Nikkei 225 stock average in Tokyo fell 4.7 percent, and the Hong Kong benchmark Hang Seng fell 5.4 percent, amid persistent concerns about global banks.

Dow futures rose 35, or 0.28 percent, to 12,355. Standard Poors 500 index futures rose 5.80, or 0.43 percent, to 1,349.00, and Nasdaq 100 index futures rose 4.50, or 0.25 percent, to 1,789.50.

European markets were mixed. The pan-European DJ Stoxx 50 index was up 1 percent in afternoon trading, while the FTSE 100 in London was down 0.1 percent. The CAC 40 in Paris was up 0.6 percent, and the DAX in Frankfurt was up 0.8 percent.

European sentiment was aided by fresh merger and acquisition speculation in banking and mining sectors and some surprisingly upbeat earnings from non-financial firms.

Sociйtй Gйnйrale, hit by a massive trading scandal last month, jumped as much as 7.8 percent as traders speculated about a potential bid by HSBC Holdings ahead of Sociйtй Gйnйrales planned capital increase. HSBC declined to comment.

Expectations of a bid for the Swiss mining company Xstrata from Brazils Vale also stoked the hopes for deal activity.

France Tйlйcom, meantime, reported an above-forecast 3.1 percent rise in earnings last year and raised cash flow expectations for 2008.

Concern about further write-downs of loans and debts sent Credit Suisse down 4.1 percent, UBS down 3.1 percent and Royal Bank of Scotland down 2.6 percent.

However, hopes for an interest rate cut from the Bank of England on Thursday and growing talk that the European Central Bank will start to signal more concern about slowing growth helped partly offset the deep gloom over bank outlooks.

Wall Street stocks plummeted Tuesday, sending the Dow down 370 points after the Institute for Supply Management reported a surprising January contraction in the U.S. service sector - news that bolstered the argument that the nation is in recession. The Dows nearly 3 percent drop was the widest percentage drop since Feb. 27, 2007.

Renewed anxiety about the world economy was triggered on Tuesday by surveys showing service sectors in the United States, Germany, Italy and Spain all contracted in January.

Financial shares such as Mitsubishi UFJ Financial Group were among the biggest losers in Asia after Standard Poors on Tuesday warned the ratings of U.S. banks could be at risk should bond insurers be downgraded. But trade was thinner than usual with markets in South Korea, Taiwan, and China closed on Wednesday for the rest of the week in what has been a less than festive start to the Lunar New Year holidays.

“The market is being hit by U.S. recession fears,” said Yoshihiro Ito at Okasan Capital Management in Tokyo. “The impact of subprime problems is spreading into the broader U.S. economy.”

Gold bounced after falling to its lowest level in almost two weeks on Tuesday, with spot prices at $893.15/85 an ounce.

PARIS: Love, Internet-style, is blooming, and that means online dating sites are trying harder than ever to win your heart. But have they met their match in social-networking sites?

Worldwide, 97 million people visited Web sites devoted to matchmaking in December, according to figures from ComScore. That number is a 10 percent drop from a year earlier, perhaps a sign that free sites like Facebook, Bebo, MySpace and others - where socializing, rather than romance, is the stated priority - are having an impact.

The global leader in Internet dating sites, Match.com, is renewing its vows to stay competitive in places where it is already the front-runner, like Japan and the United States, and in individual markets where it lags, like France and Germany.

Match.com operates in 18 languages in 37 markets and says that each year it links up 500,000 people who are looking for lasting relationships. “Its a big, fast-growing, profitable business,” Thomas Enraght-Moony, chief executive of Match.com, said on a recent visit to Paris.

And he thinks it has a vibrant future around the world, despite the competition. “Its a highly underpenetrated market,” Enraght-Moony said. “The U.S. has 92 million single people, and only 3 million now pay for an online dating service - and the U.S. is the most advanced market. In Japan, its one-tenth of that penetration.” So there is room to grow.

The top four personal-ad rivals globally are relatively neck and neck, with MSN Dating Personals just behind Match.com and just ahead of Yahoo Personals and the Paris-based dating site Meetic in terms of the number of unique visitors, according to ComScore.

But when it comes to the average time spent on the site and number of Web pages viewed, Meetic outperforms all of the top five.

Thats one reason Match.com has a unique offer in France: It is free for women, a brave step for a company that gets 95 percent of its revenue from subscriptions.

“Weve tried it in other markets, and for some reason it has been uniquely effective in France,” Enraght-Moony said.

As a result of the offer, 55 percent of the 140,000 new users who sign up at Match.com in France each month are women, compared with 40 percent in most other markets, said Arnaud Jonglez, Match.coms director in Paris.

“Typically,” Enraght-Moony said, “the day you open, its 90 percent men, so you have to build a site that attracts women.”

Whether social-networking sites hurt business for dating services in the long run is yet to be known. But Enraght-Moony says he believes that they are no threat for now.

“When we go back and talk to our customers, they say the social network is a great extension of people they already know,” he said. “They tell us, What I want to do is meet people that I dont know. ”

In fact, Match.com ads on MySpace drive traffic to the matchmaker and “is our fastest-growing source of new customers,” he said. In Britain and the United States, Match.com is also testing an online dating application that can be used on Facebook, called Little Black Book.

In France, Match.com will try a new approach to romance, introducing in the next couple of weeks a feature called Alchimie, a supplementary chemistry-inspired matchmaking questionnaire.

Designed with a biological anthropologist who has studied the brain chemistry of love, the feature operates now in the United States under a separate brand owned by IAC/InterActive, the same company that owns Match.com, Ask.com and Ticketmaster, among many other Internet brands.

True confession time: In researching this topic in its very early days - like 1994, when Prodigy, CompuServe and AOL were the equivalents of Match.com and Meetic - I answered an online personal ad just for kicks. We began an e-mail correspondence, eventually met In Real Life, and dated for the next four years.

As Enraght-Moony put it, making successful matches is not necessarily losing customers “but gaining brand advocates.”