On Wednesday May 19, 2010, 5:50 pm EDT
Mortgage delinquencies drag on economic
recovery
WASHINGTON (AP) -- The mortgage crisis
is dragging on the economic recovery as more homeowners fall behind on their
payments.
Analysts expect improvement soon, but
the number of homeowners in default or at risk of foreclosure will have a
lingering effect on the broader economy.
More than 10 percent of homeowners with
a mortgage had missed at least one payment in the January-March period, the
Mortgage Bankers Association said Wednesday. That's a record high and up from
9.1 percent a year ago.
A big jump in the number of borrowers
who have missed three months of mortgage payments drove the increase.
Consumer inflation vanishes, a boon for
borrowers
WASHINGTON (AP) -- Consumer prices fell
in April for the first time in 13 months, giving the Federal Reserve more room
to keep interest rates at historic lows to aid the economy. That's good news
for borrowers, but not for savers.
Record-low rates help borrowers who
qualify for loans and want to take on more debt. The prime lending rate, used
to set rates on some credit cards and consumer loans, is at its lowest point in
decades.
But low rates hurt savers. They're
especially hard for people on fixed incomes who earn scant returns on their
savings.
The 0.1 percent decrease in overall
prices last month was pulled down by gas prices, which are expected to drop
further this summer.
Stocks slump after investors focus on
Europe woes
NEW YORK (AP) -- Another wave of
selling hit stocks Wednesday in response to growing fears that Europe has no
quick fix for its debt crisis.
The Dow Jones industrial average fell
about 67 points after having been down as much as 186. It was the Dow's ninth
drop in 12 days.
The extent of investors' worries became
clear after the euro bounced off a four-year low but stocks still fell. The
euro has been driving stock trading for weeks.
Target's 1Q net income climbs almost 29
pct
NEW YORK (AP) -- Target Corp. reported
a 29 percent increase in first-quarter net income, as its customers, feeling
better about their finances, treated themselves to small indulgences like
clothing that carried fat profit margins.
Rising sales also provided a sign that
the retail chain is winning customers from competitors such as Wal-Mart Stores
Inc., which reported its fourth straight quarter of declines in a key revenue
measure Tuesday.
The company, based in Minneapolis,
offered second-quarter and full-year profit outlooks in line with Wall Street
expectations, but said a key sales measure is running below expectations so far
in May. That followed a 2.8 percent gain in the latest quarter that marked the
best performance in 10 quarters.
Federal Reserve sees slightly better
2010 economy
WASHINGTON (AP) -- Federal Reserve
officials have a slightly brighter view of the economy than they did at the
start of the year.
Fed officials say in an updated
forecast that they think the economy can grow between 3.2 percent and 3.7
percent this year. That's an upward revision from a growth range of 2.8 percent
to 3.5 percent in their January forecast.
The Fed's latest forecast sees the
unemployment rate, now at 9.9 percent, dipping to between 9.1 percent and 9.5
percent by year's end. In the January forecast, the Fed didn't think
unemployment would dip below 9.5 percent this year. The Fed prepared the latest
forecast for its late-April meeting.
Fed officials divided over timing of
asset sales
WASHINGTON (AP) -- Federal Reserve
officials were divided over when the Fed should start shedding its vast
portfolio of mortgage securities. The tricky endeavor would move the central
bank closer to tightening credit for millions of Americans.
Minutes of the Fed's closed-door
meeting April 27-28 released Wednesday show Fed officials expressed
wide-ranging views about when and how the Fed should go about selling some of
the $1.25 trillion of mortgage securities bought during the financial and
economic crises. The assets were purchased to drive down mortgage rates and aid
the housing market.
Euro recovers from 4-year low against
dollar
NEW YORK (AP) -- The euro recovered
from a four-year low against the dollar Wednesday as the European Commission
urged coordinated action on financial trading restrictions. Investors are still
cautious, however, about the outlook for the euro.
The euro climbed to $1.2387 in late New
York trading from $1.2176 late Tuesday. In Asian trading late Tuesday night,
the euro fell as low as $1.2146, its weakest point since April 2006.
The euro has dropped more than 11 cents
in May after a nearly $1 trillion emergency financing package for Greece and
other indebted countries was approved. It is the biggest monthly decline in the
euro since the aftermath of the collapse of Lehman Brothers in the fall of
2008.
Limited Brands' 1Q profit soars
NEW YORK (AP) -- Limited Brands Inc.,
parent of the Victoria's Secret and Bath and Body Works chains, reported
Wednesday that its first-quarter net income soared, helped by a one-time pretax
gain.
The company also offered a solid profit
outlook.
Limited Brands, which is based in
Columbus, Ohio, said late Wednesday that its net income was $112.5 million, or
34 cents per share, in the period that ended May 1. That compares with $2.6
million, or one cent per share, a year earlier.
Excluding a one-time gain of 9 cents
per share related to a cash distribution from Express, it earned 25 cents per
share.
Symantec buying VeriSign's Web-security
arm
SAN FRANCISCO (AP) -- Symantec Corp. is
paying $1.28 billion in cash to buy a division of VeriSign Inc. that sells
security technology to websites.
The deal, announced Wednesday after the
market closed, represents VeriSign's most aggressive move yet to slim down and
concentrate on its core business: managing traffic to websites with addresses
ending in ".com" and ".net," and collecting fees for
registering those names.
VeriSign has been purging divisions for
the past three years in an acknowledgment that it was spread too thin by a
buying binge designed to insulate it from the kinds of problems it had after
the dot-com collapse a decade ago.
FDA may disclose more details on drug,
food safety
WASHINGTON (AP) -- The nation's top
drug regulator proposed Wednesday to disclose more information about safety
problems with the drugs and devices it rejects.
The effort is part of a broader plan to
remake the public image of the Food and Drug Administration, which has come
under fire for being too secretive.
An agency taskforce is suggesting 21
ways the FDA could release more information to the public in areas like drug
evaluation and in food manufacturing inspections, another area in which it has
oversight responsibility.
By The Associated Press
The Dow fell 66.58, or 0.6 percent, to
10,444.37 after dropping 115 on Tuesday.
The S&P 500 index fell 5.75, or 0.5
percent, to 1,115.05. The Nasdaq composite index fell 18.89, or 0.8 percent, to
2,298.37.
Benchmark crude for June delivery added
46 cents to settle at $69.87 a barrel during a volatile day on the New York
Mercantile Exchange. Earlier in the day, prices dropped as low as $67.90 -- the
cheapest oil has been since Sept. 30.
In other Nymex trading in June
contracts, heating oil fell 1.63 cents to settle at $1.9452 a gallon, and
gasoline futures dropped 2.79 cents to settle at $2.0152 a gallon. Natural gas
tumbled 18.4 cents to settle at $4.158 per 1,000 cubic feet.
In London, Brent crude's July contact
fell 74 cents to settle at $73.69 a barrel on the ICE futures exchange.
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