(Reuters) - Bank of America Corp said it agreed to pay Fannie Mae and Freddie Mac $2.8 billion to settle claims that it sold the mortgage finance companies bad home loans. Bank of America shares climbed 3.5 percent in premarket trading Monday. Investors have been worried that the bank, like other large mortgage lenders, will have to buy back billions of dollars of home loans it sold to investors.

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(Reuters) - U.S. private employers have recorded 11 consecutive months of job gains, yet the number of people who are so discouraged that they have given up searching for work stands at an all-time high. Friday's employment report is expected to show the pace of payroll growth accelerated last month after a disappointing showing in November. However, consumers' assessment of the job market deteriorated in December, according to the Conference Board's latest consumer confidence survey.

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(Reuters) - Barnes & Noble Inc (BKS.N) reported strong preliminary holiday results at its superstores, led by the popularity of its Nook e-readers. The top U.S. bookseller reported a preliminary same-store sales increase of 9.7 percent for the nine-week period ended on January 1 at its existing superstores.

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(Reuters) - Some iPhone users in Asia and Europe complained of malfunctioning alarms on the first working day of 2011, even after Apple reassured users that its phones' built-in clocks will work from Monday. Bloggers, Facebook and Twitter users complained they missed flights or were late to arrive at work, as the alarm built into Apple's iPhone failed to go off for a third straight day for some users.

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(Reuters) - Chinese officials have faith in Spain's financial system and will continue to take part in government debt auctions, China's Vice Premier Li Keqiang wrote in an editorial in El Pais on Monday. "China is a responsible, long-term investor in the European financial market and particularly in Spain, and we have confidence in the Spanish financial market, which has meant the acquisition of its public debt, something which we will continue to do in the future," Li wrote.

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(Reuters) - Shares in American International Group (AIG) could drop this year as the U.S. government sells stock it owns in the insurer, Barron's reported on Sunday. The business weekly noted that AIG stock rose 40 percent in December to $58 per share. The boost came after AIG reached a deal with the government to repay some $100 billion of federal financial support, the report said.

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(Reuters) - Facebook has raised $500 million from Goldman Sachs and Russian Internet investment group Digital Sky Technologies in a deal valuing the social networking site at $50 billion, the New York Times reported citing people involved in the transaction. Goldman has invested $450 million and Digital Sky Technologies, which has already invested about half a billion dollars in Facebook, put in an additional $50 million, the paper said.

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(Reuters) - Asian factory output powered ahead in December to underline emerging markets' lead in the global recovery although data showed an increasing inflation threat in the region even as growth is tepid in developed economies. Purchasing managers' indexes in both China and India fell but also showed that the pace of factory output was still expanding solidly. The sectors in both countries have been growing for close to two years.

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(Reuters) - Oil climbed above $92 on Monday to its highest since October 2008, spurred on by expectations economic recovery will boost energy demand and as market bulls set their sights on $100 a barrel. U.S. crude was 86 cents higher at $92.24 a barrel by 1438 GMT, off a session high of $92.39. It settled at $91.38 on Friday, marking an annual gain of around 15 percent and the highest year-end price since 2007, when the market was ascending to the all-time high of nearly $150 a barrel touched in July 2008.

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(Reuters) - New claims for jobless aid hit their lowest level in more than two years last week and factory activity in the Midwest grew in December at its fast pace since 1988, evidence the recovery was gaining steam. Views economic activity accelerated in the fourth quarter were hardened by another report on Thursday showing pending sales of previously owned homes rose more than expected in November, even though the housing market remains in distress.

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