On Thursday February 24, 2011, 6:56 pm
New-home sales in January
drop 12.6 pct
WASHINGTON (AP) -- Sales of
new homes fell significantly in January, a dismal sign after the worst year for
that sector in nearly a half-century.
New-home sales dropped to a
seasonally adjusted rate of 284,000 homes last month, the Commerce Department
said Thursday. That's down from 325,000 in December and less than half the
600,000-a-year pace that economists view as healthy.
Bad winter weather likely
hampered some sales, although the industry has been struggling since the
housing bubble burst in 2006.
Last year was the fifth
consecutive year that new-home sales have declined after hitting record highs
during the housing boom. Buyers purchased 322,000 new homes last year, the fewest
annual total on records going back 47 years. Economists say it could take years
before sales return to a healthy pace.
Builders of new homes are
struggling to compete in markets saturated with foreclosures. High unemployment
and uncertainty over home prices have kept many potential buyers from making
purchases.
Poor sales of new homes
mean fewer jobs in the construction industry, which normally powers economic
recoveries. On average, each new home built creates the equivalent of three
jobs for a year and generates about $90,000 in taxes, according to the National
Association of Home Builders.
GM posts 1st full-year
profit since 2004
DETROIT (AP) -- In a
remarkable financial U-turn, once-bankrupt General Motors recorded its first
profitable year since 2004 and is tantalizingly close to reclaiming its title
as the world's No. 1 automaker.
The company faces a bumpy
road ahead: Gas prices are rising, GM has only a few new models and its
European operations are still losing money.
Still, the automaker's $4.7
billion profit for 2010 was impressive, especially considering where it has
been. The company lost more than $80 billion in the five years before its
bankruptcy and needed a government bailout to survive. It emerged in the summer
of 2009 cleansed of huge debt and costly labor contracts, returned to the stock
market in November, and managed to make money even with auto sales near
historic lows.
The annual profit, fueled
by strong sales in China and the U.S. as the global auto market began to
recover, gave GM its best year since 1999, when it made $6 billion at the
height of the pickup truck and sport utility vehicle boom.
GM executives predicted the
automaker would build on last year's earnings as sales continue to rise,
especially in North America.
With a good performance by
GM this year, the U.S. government could recover more of its $49.5 billion
bailout, nearly half of which has been repaid. And GM could even retake the
title of world's largest automaker, held by Toyota since 2008.
Fewer people sought unemployment
aid last week
WASHINGTON (AP) -- Fewer
people requested unemployment benefits last week, pushing the average number of
applications over the past four weeks to the lowest level in more than two and
a half years.
Applications for
unemployment benefits dropped by 22,000 last week to a seasonally adjusted
391,000, the Labor Department said Thursday. It was the third decline in the
past four weeks.
The four-week average for
applications, a less volatile figure, fell to 402,000. That's the lowest number
since late July 2008 and a hopeful sign that the job market is slowly
improving.
The downward trend in
applications indicates that layoffs are dropping steadily. But economists are
still unsure when employers will begin hiring enough to make a dent in the 9
percent unemployment rate.
Applications below 425,000
tend to signal modest job growth. But they would need to dip consistently to
375,000 or below to indicate a significant decline in the unemployment rate.
Applications for benefits peaked during the recession at 651,000.
Average rate on 30-year
mortgage dips to 4.95 pct.
NEW YORK (AP) -- The
average rate on the 30-year fixed mortgage fell below 5 percent this week, as
investors sought more Treasury notes amid growing tension in the Middle East.
Freddie Mac said Thursday
that the average rate on the 30-year loan slipped to 4.95 percent from 5
percent. It hit a 40-year low of 4.17 percent in November.
The average rate on the
15-year fixed home loan fell to 4.22 percent from 4.27 percent. It reached 3.57
percent in November, the lowest level on records dating back to 1991.
Mortgage rates tend to
track the yield on the 10-year Treasury note. It fell this week as investors
shifted money out of stocks and into safer assets amid escalating violence in
Libya.
Even though rates are
two-thirds to three-quarters of a percentage point higher than their lows just
three months ago, they remain at historically low levels.
Still, rates have done
little to boost the housing market. Buyers are reluctant to purchase because of
high foreclosures, tight lending standards, job concerns and expectations that
home values will continue to fall.
Durable goods orders
excluding airplanes drop
WASHINGTON (AP) -- Orders
for long-lasting manufactured goods outside of transportation fell in January
by the largest amount in two years.
Orders for durable goods
excluding transportation fell 3.6 percent last month, the biggest drop since
January 2009, the Commerce Department reported Thursday.
A key category viewed as a
proxy for business investment spending was also down by the largest amount in
two years.
Total durable goods orders
rose 2.7 percent but that increase was driven by a huge rebound in orders for
commercial aircraft, an extremely volatile category.
Manufacturing has been one
of the standout performers during this recovery and economists expect that to
continue despite the January weakness. January orders totaled $200.5 billion,
considered a healthy level by economists and 25 percent above the recession low
hit in March 2009.
The January rise in total
orders was the first increase after three straight monthly declines. However,
all the strength reflected a big surge in orders for aircraft after big
declines in November and December. In January, orders for commercial aircraft
rose to $7.4 billion, far above the December level of $148 million. Orders for
autos and auto parts were up 0.4 percent in January.
Target's 4Q profit rises 11
pct on solid holiday
NEW YORK (AP) -- Solid holiday
sales and improvements in its branded credit card business helped Target's
fourth-quarter profit rise almost 11 percent, but a company official cautioned
Thursday that the economy is a "wild card."
The discounter said two
major initiatives -- offering more food and giving shoppers a 5 percent
discount if they use Target Corp.'s branded cards -- would help drive a key
measure of revenue growth for this year to its highest level in several years.
And Target, which is based
in Minneapolis, is forecasting strong growth overall. It expects its annual
revenue to top $100 billion in six or seven years, compared with $67 billion
last year, and it expects its earnings per share to double in that period.
The company forecast lower
earnings for fiscal 2012 than Wall Street was expecting, but investors appeared
to focus on the long term. Target shares rose 3.5 percent, or $1.74, to close
at $52, still near the low end of their 52-week range from $48.23 to $60.97.
They were unchanged after hours.
Sears 4Q earnings fall,
adjusted results top Street
HOFFMAN ESTATES, Ill. (AP)
-- Sears Holdings Corp.'s fourth-quarter net income fell 13 percent, but
adjusted results topped Wall Street's expectations thanks to continued
strengthening at its Kmart stores.
Fixing the long-running
weakness at Sears will be the challenge for new CEO and President Lou
D'Ambrosio, named to the post Wednesday.
The retailer led by
billionaire Edward Lampert reported Thursday that it earned $374 million, or
$3.43 per share, for the period ended Jan. 29. That compares with $430 million,
or $3.74 per share, a year earlier.
Adjusted earnings were
$3.67 per share, beating the $3.60 per share that analysts surveyed by FactSet
predicted.
Revenue dipped 1 percent to
$13.14 billion mostly because of fewer stores and lower revenue at stores open
at least a year. But the performance still managed to top Wall Street's $13.02
billion.
The performance is not that
much of a surprise for the retailer, as last month Sears signaled that it
expected to post fourth-quarter numbers that would be better than what Wall
Street analysts had forecast. It is the company's first profit since the first
quarter.
Freddie Mac posts $1.7B
loss for Q4
WASHINGTON (AP) --
Government-controlled mortgage buyer Freddie Mac managed a narrower loss of
$1.7 billion for the October-December quarter of last year. But it has asked
for an additional $500 million in federal aid -- up from the $100 million it
sought in the previous quarter.
Freddie Mac also posted a
$19.8 billion loss for all of 2010.
The government rescued
Freddie Mac and sibling company Fannie Mae in September 2008 to cover their
losses on soured mortgage loans. It estimates the bailouts will cost taxpayers
as much as $259 billion.
Freddie Mac's
October-December loss attributable to common stockholders works out to 53 cents
a share. It takes into account $1.6 billion in dividend payments to the
government. It compares with a loss of $7.8 billion, or $2.39 a share, in the
fourth quarter of 2009.
The company said the
recovery of the housing market is still fragile.
Fannie Mae and Freddie Mac
own or guarantee about half of all mortgages in the U.S., or nearly 31 million
home loans worth more than $5 trillion. Along with other federal agencies, they
played some part in almost 90 percent of new mortgages over the past year.
Fannie and Freddie buy home
loans from banks and other lenders, package them into bonds with a guarantee
against default and sell them to investors around the world.
Toyota recalls 2.17 million
vehicles in US
WASHINGTON (AP) -- Toyota
Motor Corp. recalled 2.17 million vehicles in the United States on Thursday to
address accelerator pedals that could become entrapped in floor mats or jammed
in driver's side carpeting, prompting federal regulators to close its investigation
into the embattled automaker.
The Transportation
Department said it had reviewed more than 400,000 pages of Toyota documents to
determine whether the scope of the company's recalls for pedal entrapment was
sufficient.
Toyota has now recalled
more than 14 million vehicles globally to fix gas pedals and other safety
problems since 2009. The company has received intense scrutiny from the
government since August 2009, when four people were killed in a high-speed
crash involving a Lexus near San Diego.
U.S. regulators largely
cleared the company earlier this month, saying that electronic flaws were not
to blame for reports of sudden, unintended acceleration that led to hundreds of
complaints.
By The Associated Press
The Dow Jones industrial
average fell 37.28 points, or 0.3 percent, to 12,068.50.
The Standard & Poor's
500 index fell 1.30, or 0.1 percent, to 1,306.10. The S&P was down for a
third straight day.
The Nasdaq composite bucked
the trend. It rose 14.91 points, or 0.6 percent, to 2,737.90.
Benchmark West Texas
Intermediate crude for April delivery fell 82 cents to settle at $97.28 on the
New York Mercantile Exchange.
In other Nymex trading in
March contracts, heating oil fell 2.34 cents to settle at $2.8932 per gallon
and gasoline added 0.72 cent to settle at $2.8749 per gallon. Natural gas lost
6.4 cents to settle at $3.872 per 1,000 cubic feet.
In London, Brent crude
added 11 cents to settle at $111.36 on the ICE Futures exchange. Brent prices
almost reached $120 per barrel earlier in the day.