The Federal Deposit Insurance Corp. quickly sold the bank to equity firms in New York, The Miami Herald reported. But BankUnited, the largest bank to fail since IndyMac collapsed last year -- and the 34th failed bank this year -- rattled the financial sector.

In late morning trading, the Dow Jones industrial average lost 12.90 points, or 0.16 percent, to 8,279.23. The Standard & Poor's 500 fell 0.06 percent, 0.53 points, to 887.80. The Nasdaq composite index dropped 2.12 points, 0.13 percent, to 1,693.13.

The benchmark 10-year U.S. Treasury bond rose 4/32 to yield 3.393 percent.

The euro rose to $1.3999, compared to Thursday's $1.3905. Against the Japanese yen, the dollar fell to 94.26 yen, compared to Thursday's 94.30 yen.

In Tokyo, the Nikkei average shed 38.34 points to 9,225.81, off 0.41 percent.

GM, not out of woods, reaches union deal DETROIT, May 22 (UPI) -- U.S. auto giant General Motors Corp. has struck a deal with union workers, but resistance from creditors could lead to bankruptcy, analysts said.

The agreement, which goes to a union vote, allows GM to finance half of a $20 billion retiree health benefit obligation with company stock, sources close to the talks said.

The deal, which would give the union 39 percent of the company, is similar to an arrangement with Chrysler LLC that erased cost-of-living increases and reduced breaks for workers, The Detroit News reported.

Meanwhile, bondholders appear unlikely to agree to a proposal of swapping about $27 billion in debt for shares at a ratio of 225 shares per $1,000 of debt.

"I think there's a shot it will succeed, but a very small one," David Cole, chairman of the Center for Automotive Research told the New York Times Friday.

Bondholders have proposed a swap for 58 percent of GM. In addition to the union's 39 percent holdings, the Treasury Department plan would give creditors 10 percent, shareholders 1 percent and the government 50 percent.

"We have made it clear that our viability requires us to take these actions to restructure our operations and reduce the liabilities and debt on our balance sheet," company spokesman Greg Martin said.

Having already received $15.4 billion from the government, the company has until June 1 to submit a financial plan to the government to qualify for additional federal loans.

GM has asked for an additional $11.6 billion, but the bankruptcy route would provide $30 billion in government support, The Washington Post said.