(Reuters) - The U.S. Federal Reserve's aggressive bond-buying plan could soon backfire unless the central bank gradually changes course to head off inflation, a top Fed official known for his hawkish stance said on Tuesday. Philadelphia Federal Reserve Bank President Charles Plosser said the $600-billion quantitative easing plan, known as QE2, would need to be reconsidered if the U.S. economy's current "moderate recovery" picks up steam.

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(Reuters) - U.S. wholesale inventories unexpectedly fell in November as wholesale sales outstripped forecasts, a government report showed on Tuesday, suggesting optimism about the sustainability of demand. The Commerce Department said wholesale inventories fell 0.2 percent to a seasonally adjusted $425.5 billion. Economists polled by Reuters had expected a 1 percent rise in inventories after an October increase that was revised downward slightly to 1.7 percent. It was the first fall in wholesale inventories since December 2009.

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(Reuters) - China overshot its bank loan target in 2010 and finished the year with money growth still running too fast, underscoring the need for more decisive policy tightening to keep inflation in check. At the same time, a record $199 billion surge in foreign exchange reserves in the fourth quarter pushed China's stockpile, already the world's biggest, to $2.85 trillion, highlighting that money streaming in from abroad was complicating policy efforts at home.

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(Reuters) - Japan promised on Tuesday to buy euro zone bonds this month in a show of support for Europe's struggle with a seething debt crisis. Portugal, the latest euro zone member in the market's firing line, continued to fend off pressure to seek a bailout. Finance Minister Fernando Teixeira dos Santos said Portugal was doing everything it could to avoid a humiliating EU-IMF financial rescue, already granted to Greece and Ireland.

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(Reuters) - BAE Systems Plc (BAES.L) will cancel the auction of its Platform Solutions unit and keep the division after months of talks with potential buyers resulted in no agreement, the company said on Tuesday. The British defense contractor, which hired JPMorgan Chase & Co (JPM.N) and Wells Fargo (WFC.N) to sell the business last year, said no sale has been agreed despite "considerable expressions of interest" and the company would no longer pursue the sale of the business.

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(Reuters) - Alaska's main oil pipeline was still expected to restart this week after a spill on Saturday forced it to shut down, idling 12 percent of U.S. oil production, a source familiar with its operations said. Trans Alaskan Pipeline System operator Alyeska expects to bypass a leaky area along the 600,000 barrel-per-day, 800-mile line by installing a substitute stretch of pipe, the industry source told Reuters. Alyeska will await approval from the U.S. Department of Transportation (DOT) before resuming operations, he added.

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(Reuters) - U.S. consumers continue to struggle to pay back home equity, auto and other loans as high unemployment drags on the economy. The American Bankers Association said in a report released on Tuesday that the overall loan delinquency rate ticked up slightly for the second straight quarter. It had been dropping steadily since hitting 3.35 percent in the second quarter of 2009.

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(Reuters) - U.S. stocks pulled back from strong recent gains on Monday as renewed concerns about the euro zone sovereign debt crisis overshadowed the lift from several large acquisitions. Pressure grew on Portugal to seek financial help from the European Union and International Monetary Fund, though the European Commission on Monday denied that discussions were underway on an EU/IMF bailout.

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(Reuters) - The Trans Alaska Pipeline was shut for a third day on Monday with no timeline for resuming oil flows after a leak forced producers to cut Prudhoe Bay output from 630,000 barrels per day to a trickle. Oil prices rose 1 percent on Monday as the outage halted nearly 12 percent of U.S. crude output, and shares in BP, the major stakeholder in pipeline operator Alyeska Pipeline Service Co, fell 1.25 percent.

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(Reuters) - The Federal Reserve is turning over a record $78.4 billion to the U.S. Treasury Department after its swollen securities portfolios generated big profits in 2010, the central bank said on Monday. The remittance to the Treasury for 2010 is $31 billion more than a year earlier. "The increase was due primarily to increased interest income earned on securities holdings during 2010," the Fed said in a reference to portfolios that have been fattened by buying aimed at stimulating a slow-paced recovery.

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