Sales of existing homes tumbled 27.2 percent in July

Home sales plunged in July to record lows as buyer demand withered after the expiration of a federal home buyer tax credit - a drop that shows troublesome weakening in the housing market recovery.


Sales of existing homes tumbled 27.2 percent in July to a seasonally adjusted annual rate of 3.83 million units from 5.26 million in June, according to a report Tuesday from the National Association of Realtors. Sales are at the lowest level since the report began being released in 1999, and sales of single-family homes - which account for the bulk of transactions - are at the lowest level since May 1995.

"This qualifies as a double dip in housing," says Mark Zandi, with Moody's Analytics.com. "It's particularly disconcerting given that fixed mortgage rates are lower. The recovery is weakening. These are pretty ugly numbers."

Economic fundamentals aren't working to buoy the housing market, economists say, and the real engine that is needed to turn the recovery around is more private-sector jobs.

Economists say they were surprised by the size of July's drop in home sales, which indicates buyers have scant confidence in the housing market. Existing-home sales fell 35 percent in the Midwest in July, 29.5 percent in the Northeast; in the West, they fell 25 percent and they were down 22.6 percent in the South.

The number of homes on the market also grew, which tends to dampen prices. Housing inventory at the end of July increased 2.5 percent to 3.98 million existing homes available for sale, a 12.5-month supply at the current sales pace, up from an 8.9-month supply in June. A six-month supply is considered normal.

One reason the market is hurting is that buyers and sellers are in a standoff over prices. Many sellers are reluctant to lower their prices. And buyers are hesitating because they think home prices haven't bottomed out.

"It really is a self-fulfilling prophecy," said Aaron Zapata, a real estate agent in Brea, Calif. "If all buyers perceive that home prices are coming down, then they will stop making offers - and home prices will come down."

Some economists say any turnaround in the housing market is going to take time. Sales are expected to perk up in October and November, but even then, so many homeowners have so little equity in their homes that many can't afford to buy a new home.

The median sale price was $182,600, up 0.7 percent from a year ago, but down 0.2 percent from June.

http://www.clarionledger.com/article/20100824/NEWS03/100824012/Home-sales-plunge-27-percent

Dow slides 172 points today

NEW YORK (CNNMoney.com) -- Investors were hit with a triple whammy of bad economic news Thursday: manufacturing still stinks, more people are jobless and confidence in the future is less than hoped.


As a result, stocks were sharply lower: the Dow Jones industrial average (INDU) tumbled 172 points, or 1.7%, and the S&P 500 (SPX) slipped 20 points, or 1.9%. The tech-heavy Nasdaq (COMP) composite fell 40 points, or 1.8%.

Stocks were coming off two days of gains, driven by solid earnings outlooks from retail giants Wal-Mart, Home Depot and Target. But even during this week's earlier rallies, traders were saying they were remaining cautious given fears about a double-dip recession - or at least, a slower recovery.

Thursday's disappointing numbers on weekly jobless claims, manufacturing in the Philadelphia region and leading indicators just fanned the flames on those gloom-and-doom fears.

"Today's news on the U.S. economy has been nothing but awful," Paul Ashworth, senior economist with Capital Economics said in a note to investors.

A report that showed manufacturing activity in the Philadelphia region slowed to a 13-month low "suggests the industrial recovery is teetering on the brink," he said.

Economy: The Philadelphia Federal Reserve's economic index took an unexpected dive in August, turning to negative 7.7 when analysts had expected a positive 7.5. The index measures manufacturing activity in eastern Pennsylvania, southern New Jersey and Delaware, and any number below zero indicates business activity in the sector is slowing down.

An earlier report from the government showed the number of Americans filing for unemployment insurance unexpectedly jumped 12,000 to 500,000 last week from an upwardly revised 488,000 the previous week. The figure was the highest level since the week ended Nov. 14.

Economists surveyed by Briefing.com were expecting claims to drop to 475,000.

Meanwhile, the index of leading economic indicators - a measure of the economy's future performance - increased a mere 0.1% in July, the Conference Board said. Analysts had forecast a 0.2% increase for the month.

Companies: Intel (INTC, Fortune 500) will acquire security software maker McAfee (MFE) for $7.68 billion. Shares of Intel slipped 3.3% in afternoon trading, while McAfee's stock spiked about 57%.

Two key technology companies that have been in the news of late - Hewlett-Packard and Dell - are scheduled to report quarterly results after the close.

Both companies' earnings are expected to rise from a year earlier. Analysts polled by Thomson Reuters are looking for Dell to post a profit of 30 cents per share on revenue of $15.2 billion. HP is expected to have earned $1.08 per share on revenue of $30.4 billion.

Shares of Dell (DELL, Fortune 500) fell about 1.1%, while HP's (HPQ, Fortune 500) stock dipped 1.9%.

Earlier this month, HP chief executive Mark Hurd resigned because of accounting issues related to his relationship with a female contractor.

Last month, Dell agreed to pay a $100 million fine to settle a fraud charge with the SEC.

World markets: European stocks closed lower. The FTSE 100 in Britain slipped 1.7% and the DAX in Germany moved down 1.8%. The CAC 40 in France fell 2%.

Asian shares finished the session in positive territory. The Nikkei in Japan climbed 1.3%. The Shanghai Composite rose 0.8% and the Hang Seng in Hong Kong added 0.2%.

Currencies and commodities: The dollar rose against the euro but fell against the U.K. pound and the Japanese yen.

Oil futures for September delivery slipped $1.30 to $74.12 a barrel. Gold for December delivery rose $4 to settle at $1,235.40.

Bonds: Prices for Treasurys were higher. The yield on the 10-year note fell to 2.58% from 2.63% late Wednesday. Bond prices and yields move in opposite directions.

Market breadth: Market breadth was negative. On the New York Stock Exchange, losers outnumbered winners five to one on volume of 560 million shares. On the Nasdaq, decliners beat advancers five to one on volume of 1.3 billion shares.

Stocks come off week-long slump

NEW YORK (CNNMoney.com) -- Stocks rallied Tuesday after a Federal Reserve regional president said fears about the central bank's outlook were "unwarranted" and investors shifted their focus to strong earnings from Wal-Mart and Home Depot.


The Dow Jones industrial average (INDU) rose 104 points, or 1%, pushing the index to 10,406.

The Nasdaq (COMP) composite climbed 28 points, or 1.3%, to 2,209; the S&P 500 (SPX) added 13 points, or 1.2%, to close at 1,092.

The gains followed a choppy trading day on Wall Street on Monday. The tech-heavy Nasdaq managed to advance, rising about 0.4%, while the Dow and S&P 500 ended little changed.

Investors started the week coming off four consecutive sessions of losses, following a bearish statement from the Federal Reserve a week ago.

And while the Fed's outlook about a slowing economic recovery is still weighing on investors' minds, their fears were calmed on Tuesday when Narayana Kocherlakota -- head of the Federal Reserve Bank of Minneapolis -- said those concerns about the central bank's statement are "unwarranted."

"My own interpretation is that the FOMC action led investors to believe that the economic situation in the United States was worse than they, the investors, had imagined. In my view, this reaction is unwarranted," Kocherlakota said in a speech Tuesday.

That statement helped propped markets up toward key psychological levels as the S&P 500 traded near 1,100 and the Dow looked to turned positive for the year in afternoon trading, said Dan Cook, senior market strategist with Chicago-based brokerage firm IG Markets. The Dow fell short of matching its 2009 close.

Cook said strong earnings reports from retail powerhouses Wal-Mart and Home Depot in the morning also helped to drive stocks higher.

But he added, he doesn't the think "the game has changed."

"As far as the fundamentals and corporate earnings are concerned, I just don't get a warm, fuzzy feeling," he said. "I'm looking for choppy action for the foreseeable future, all the way into September."

Companies: Wal-Mart Stores (WMT, Fortune 500) reported a slightly better-than-expected fiscal second-quarter profit Tuesday, although customers of the world's largest retailer continued to curb spending. Wal-Mart also boosted its full-year guidance. Shares of the retailer were up 1.3%.

Home improvement retailer Home Depot (HD, Fortune 500) posted a better-than-expected second-quarter profit that rose from a year earlier, but its sales missed forecasts. Home Depot shares gained 3.6%.

Shares of fertilizer producer Potash (POT) rose 28% after it rejected a $38 billion takeover offer by mining company BHP Billiton.

Pactiv (PTV), the maker of Hefty trash bags, gained more than 5% after agreeing to be acquired by Reynolds Group Holdings, which is a subsidiary of a New Zealand firm, for $6 billion.

General Motors is expected to file for an initial public offering of stock with U.S. securities regulators as early as Tuesday.

Economy: A wave of economic reports, including data on housing and inflation, showed mixed results before the bell.

A report from the Commerce Department showed that housing starts -- the number of new homes starting construction -- rose 1.7% to an annual rate of 546,000 in July. But permits fell 3.1% to an annual rate of 565,000.

Both of these tallies were less than expected. Economists were looking for housing starts to rise to a seasonally adjusted annual rate of 555,000; building permits were expected to slip to a rate of 573,000.

The Producer Price Index, a measure of wholesale inflation, matched expectations by increasing 0.2% in July, after dropping 0.5% in June.

World markets: European shares finished higher. The CAC 40 in France gained 1.8%, Germany's DAX rose 1.6% and the FTSE 100 in Britain gained 1.4%.

In Asia, the Shanghai Composite and Hong Kong's Hang Seng ended the session with modest gains. Japan's benchmark Nikkei index, however, fell almost 0.4%.

Currencies and commodities: The dollar fell against the euro, but rose versus the U.K. pound and the Japanese yen.

Oil futures for September delivery rose 53 cents to settle at $75.77 a barrel.

Gold futures for December delivery increased $2.10 to settle at $1,228.30 an ounce.

Bonds: Prices for Treasurys were lower. The yield on the 10-year note rose to 2.64%, coming off a 17-month low of 2.58% late Monday. Bond prices and yields move in opposite directions.

Auto sales boost otherwise weak retail sector

By MARTIN CRUTSINGER and CHRISTOPHER S. RUGABER, AP Economics Writers Martin Crutsinger And Christopher S. Rugaber, Ap Economics Writers – 43 mins ago


WASHINGTON – Americans spent less at most retail stores in July and inflation remained tame as high unemployment and weak job growth fueled fears of a slowing economic recovery.
A busy month for car dealerships and higher gas prices was enough to lift overall retail sales 0.4 percent last month, the Commerce Department said Friday. It was the first overall gain in three months.

Still, most retailers reported declines. Excluding autos and gasoline sales — which accounted for one-fourth of the July figures — retail sales fell 0.1 percent last month. Sales were down 1 percent at department stores and also dropped at specialty clothing stores, furniture stores, hardware stores and appliance stores.

"While retailers have seen a solid gain in activity compared to last year, the more recent three month trend has been negative and that is not good news," said Joel Naroff, president of Naroff Economic Advisors.

The Consumer Price Index rose 0.3 percent in July, the Labor Department said. But that was mostly because of rising gas prices. After stripping out volatile food and gas prices, the so-called "core" index increased 0.1 percent. Over the past year, consumer prices rose 1.2 percent — the slowest pace in 44 years.
The Commerce Department also reported that inventories held by businesses rose for a sixth straight month in June. But inventory sales declined for a second month in a row, another sign of weak demand among consumers.
Auto sales represent such a large portion of monthly data and gas sales change rapidly from month to month. So economists prefer to look at the retail sector without those two categories. And retail sales figures are not adjusted for price changes.
Broad declines in other retail sales have economists concerned that spending will slow further in the second half of this year. Households are saving more and spending less as they struggle with high unemployment and lackluster job growth.
Economists note that the government revised activity in the previous two months to show slightly smaller decreases. But overall, the declines for most retailers in July suggest the recovery is losing momentum.
"There is only one thing that's for sure — economic momentum has slowed," said Jennifer Lee, senior economist for BMO Capital Markets.
The July increase in retail sales followed declines of 0.3 percent in June and 1 percent in May. Sales had surged 2.1 percent in March but since that time consumer spending, which accounts for 70 percent of the economy, has weakened.
Summer promotions and easier credit lured shoppers back to car buying last month. Nissan, Toyota, Volkswagen, Subaru and Kia reported the biggest gains. The industry sold more than 1 million cars and light trucks. That's 5.1 percent higher than in July 2009. Last year auto sales fell to the lowest level in three decades.

Sales at gasoline stations rose 2.3 percent in July, the biggest jump since last November. But much of that strength reflected higher prices.
Prices are rising at the slowest pace in 44 years, well below the Federal Reserve's inflation target. Core prices moved up 0.9 percent in the past year for the fourth month in a row.
July's modest increase in consumer prices may quiet deflation concerns raised in recent weeks by some Federal Reserve officials. Deflation is a widespread and prolonged drop in the price of goods, real estate and stocks. It also reduces wages and can make it harder to pay off debts.
The last serious case of deflation in the U.S. was during the Great Depression. Most economists don't believe deflation will happen. But they are watching consumer prices closely for any signs of it.

Blagojevich jurors agree on 2 counts

CHICAGO — Jurors in the corruption trial of former Illinois Gov. Rod Blagojevich said Thursday that they have reached agreement on just two of 24 counts against him, indicating that they could have a long way to go in analyzing the complex case.

The judge immediately said he would tell them to go back and deliberate some more.
Jurors gave no indication of what decision they had reached on the two counts where they did agree.
They said they have not discussed 11 counts of wire fraud, many of which involve telephone conversations that were taped by the FBI. Many of those discussions relate to the allegation that Blagojevich attempted to sell or trade President Barack Obama's old Senate seat.
The communication from jurors indicated that they have discussed the remaining 11 counts and appear to be deadlocked on them.Blagojevich and his co-defendant brother listened intently, sitting at the edge of their chairs, as the presiding judge read the jury note. After the hearing adjourned, the ex-governor quickly smiled in a huddle with attorneys. He put his arms around his wife Patti's shoulder."I would be foolish to speculate what a jury will do," one of Blagojevich's attorneys, Sam Adam Sr., told reporters at the courthouse.
Legal analyst Terry Sullivan said the fact the jury has reached consensus on only two counts is "very good news for the defense so far."But he said just because they haven't voted on 11 wire fraud counts doesn't mean they haven't considered them because the alleged acts of wire fraud are part of the first count, racketeering."They had to have at least considered mail and wire fraud," Sullivan, a Chicago attorney and former prosecutor, said in an interview on WGN-TV. The jury had sent a note to Judge James B. Zagel on Wednesday saying they were stuck, but without giving specifics. Zagel had asked for clarification, and said Thursday he wants the jury to go back and discuss the wire fraud counts.
Blagojevich, 53, has pleaded not guilty to charges including that he tried to sell or trade the Senate seat appointment for a Cabinet post, private job or campaign cash and tried to leverage the power of his office for personal gain. If convicted, he could face up to $6 million in fines and a sentence of 415 years in prison, though he is sure to get much less time under federal guidelines.
His brother, Tennessee businessman Robert Blagojevich, 54, faces four counts and has pleaded not guilty.

Judges have a lot of autonomy about what to do in case of deadlock over some or all counts, said Michael Helfand, a Chicago attorney with no link to the case.Besides sending them back to keep trying, a judge can ask jurors if there's anything he could provide that might help them reach a verdict - for instance, transcripts of specific witness testimony. They haven't had any transcripts of testimony during their deliberations to date.
Zagel praised the Blagojevich jurors on Wednesday, calling them disciplined and diligent. Any discord has apparently been civil, Zagel told the court, with no reports of shouting or screaming from the 25th floor jury room where the 12 jurors gather each weekday.
"Jurors have a hard, thankless job - and you very rarely see a judge that doesn't treat jurors as well as possible," Helfand said. "So the fact Zagel praises them, won't mean he'll let them off the hook."
If jurors are deadlocked on most counts, prosecutors could retry Blagojevich on counts where the jury couldn't agree, said Helfand. He said that's likely, especially if there's deadlock on the most important charges, like racketeering.

http://www.clarionledger.com/article/20100812/NEWS03/100812014/Blagojevich+jurors+agree+on+2+counts

Check out this great MSN Video: Surfer Encounters Sharks

Check out this great MSN Video: Surfer Encounters Sharks

Surfer Chuck Patterson captures video of two great white sharks swimming near his board off the Southern California coast. Patterson had noticed the sharks the previous day, but decides to return to the same spot, this time with a video camera.

Stocks get a beatdown on global concerns

By Julianne Pepitone, staff reporterAugust 11, 2010: 5:45 PM ET


NEW YORK (CNNMoney.com) -- Stocks slid to close sharply lower Wednesday after a report showed the U.S. trade gap widened, and foreign data cast doubt on overseas demand for American goods.

The Dow Jones industrial average (INDU) tumbled 265 points, or 2.5%, to close at 10,378.83. The Nasdaq (COMP) sank 69 points, or 3%, to end at 2,208.63, and the S&P 500 (SPX) fell 32 points, or 2.8%, to close at 1,089.47.

1230 diggs
diggEmail Print CommentEarlier Wednesday, the government reported the trade deficit widened in June to $49.9 billion, much more than economists had expected.

Ian Shepherdson, economist at High Frequency Economics, called the trade figures "spectacularly terrible."

Meanwhile, the Bank of England lowered its forecast for U.K. economic growth, and said inflation is likely to be below the 2% target in 2012.

A raft of data from China reflected a dour July -- inflation rates missed expectations, industrial production eased to the lowest level this year and retail sales slowed.

The global bad news unnerved investors, with the CBOE volatility index (VIX) -- known as the VIX -- jumping 13% to 25.29.

"We're seeing a reaction to major economic powerhouses showing signs of lower economic activity, and that's raising the fear factor on the global recovery," said Peter Cardillo, chief market economist at Avalon Partners.

Stocks fell Tuesday after the Federal Reserve issued a cautious outlook about the recovery.

World markets: European markets tumbled, with Britain's FTSE 100, France's CAC 40 and Germany's DAX all closing more than 2% lower.

In Asia, Japan's benchmark Nikkei plunged 2.7% after some disappointing manufacturing data. The Hang Seng in Hong Kong fell 0.8%, while the Shanghai Composite rose 0.5%.

0:00 /1:51What the Fed didn't say

Companies: After the closing bell, tech bellwether Cisco (CSCO, Fortune 500) posted a 79% jump in fiscal fourth-quarter profit, but revenue missed expectations.

The network equipment maker posted net income of $1.9 billion, or 33 cents a share. Analysts polled by Thomson Reuters were expecting 42 cents a share. Cisco shares fell almost 5.5% in after-hours trading.

A federal judge ordered Wells Fargo (WFC, Fortune 500) to pay more than $200 million in restitution to California customers for manipulating and multiplying overdraft fees. The 90-page ruling said "a bookkeeping device" allowed the bank to multiply the number of fees it could collect from a single mistake.

AIG (AIG, Fortune 500) said it will sell most of its consumer finance unit to investment manager Fortress (FIG). Further terms weren't disclosed, but it should allow AIG to raise cash as it seeks to pay down its obligations to taxpayers stemming from its 2008 bailout. AIG shares dropped to close 5.9% lower.

Shares of Macy's (M, Fortune 500) rallied to close almost 6% higher Wednesday after the department store chain posted a quarterly profit that beat estimates and boosted its earnings forecast for the year.

Toyota (TM) said an investigation has so far found no problems with its cars beyond those the company has already recalled. Researchers for the National Highway Traffic Safety Administration looked into 58 crashes of Toyota cars and have not found any further safety defects but shares ended 2.8% lower.

Economy: The National Association of Realtors released a report showing the median price of a single-family home in the second quarter rose 1.5% over the year to $176,900.

According to the Office of Management and Budget, the nation had a $165.04 billion budget deficit in July. Economists surveyed by Briefing.com expected the Treasury budget to have a $180.7 billion deficit.

Currencies and commodities: The dollar gained against the euro and U.K. pound, but touched a 15-year low versus the Japanese yen.

Oil futures for September delivery fell $1.76 to settle at $78.49 a barrel.

Bonds: Prices for Treasurys were higher, moving the corresponding yields lower. The yield on the 10-year note fell to 2.7% from 2.77% late Tuesday. Investors submitted bids of almost $73 billion for the government's sale of $24 billion worth of 10-year notes.

http://money.cnn.com/2010/08/11/markets/markets_newyork/index.htm?hpt=T2