The exception is the beleaguered housing market. Record foreclosures have forced home prices down, and last year was the worst for sales in more than a decade. About the only good news was that qualified buyers could get the deal of a lifetime from their lenders, if they had the means â¿¿ and the stomach â¿¿ for the market.Now rates are rising, and analysts expect that will continue through the end of the year, to about 5.5 percent. The next few months are the busiest for the housing market â¿¿ about one in three home sales happens in the spring. ___ Wholesale businesses boost inventories in December WASHINGTON (AP) â¿¿ Businesses at the wholesale level added to their inventories in December at a healthy clip even though demand for their products slowed. The expectation is that rising demand from businesses will keep factories humming. Wholesale businesses boosted inventories 1 percent in December, pushing the total to $430.5 billion, the Commerce Department reported Thursday. Economists consider that a healthy level for inventories. It is 11.4 percent above the low reached in September 2009 when companies were slashing their stockpiles in response to a deep recession. Sales at the wholesale level rose 0.4 percent in December, a smaller than expected increase and the poorest showing since last July. However, the December advance followed a strong 1.9 percent rise in November. Inventory restocking had been unchanged in November after 10 straight months of increases. Economists did not view that slowdown as troubling, arguing that sales were so strong in November that wholesalers probably had trouble keeping up with demand. Most economists believe inventories will keep growing this year as businesses respond to rising demand. Inventories climbed to a high of $455.6 billion in August 2008. That was not a sign of a healthy economy, but rather an unwanted buildup of stockpiles in the face of plunging demand.
___January deficit grows by $50B, on pace for $1.5T WASHINGTON (AP) â¿¿ The federal government's budget deficit grew by $50 billion in January and is expected to finish the year as the highest in history. The Treasury Department said Thursday the deficit was one of the highest ever for the month of January, second only to the $63 billion deficit recorded two years ago. For the first four months of this budget year, the deficit totaled $418.8 billion, 2.7 percent lower than the same period a year ago. However, this improving trend is expected to reverse in coming months. The Congressional Budget Office is projecting a record deficit of $1.5 trillion this budget year, which ends in September. The estimate was revised upward last month based on a tax-cut package brokered between the White House and Republicans that will add $400 billion to this year's red ink. That will mark the third consecutive year that the government's deficit has been over $1 trillion, unprecedented imbalances that have been caused by the worst recession since the 1930s. That meant a sharp drop in government tax collections as millions of people lost their jobs while at the same time the government was boosting spending to stimulate the economy and stabilize the banking system. ___ Mortgage default notices slow sharply in January LOS ANGELES (AP) â¿¿ Fewer U.S. homes entered the foreclosure process in January than in any month in more than three years, the latest sign lenders are taking longer to move against homeowners who have fallen behind on mortgage payments. The number of homes that received an initial default notice fell 1 percent last month from December and tumbled 27 percent from January last year, foreclosure listing firm RealtyTrac Inc. said Thursday. Scheduled foreclosure auctions also fell to the lowest level in two years, the firm said.
The delays stem partly from foreclosure paperwork problems that came to light last fall, leading many lenders to revisit thousands of foreclosure cases, especially in states such as Florida that require foreclosures to be approved by a judge.Some lenders that put foreclosure actions on hold temporarily last year have since resumed, but at a more measured pace, causing a decline in the foreclosure-related notices sent to households last month. Banks also have been letting borrowers who have missed payments stay in their homes longer so they can delay adding to their backlog of bad loans. ___ Rising bond yield sounds alarm for Portugal LISBON, Portugal (AP) â¿¿ Uncertainty over Portugal's financial future flared again Thursday when its borrowing rates hit new euro-era records, signaling the government and fellow European leaders have been unable to check the spread of the continent's debt crisis. The rise in Portugal's 10-year bond yield came as investors were disappointed with the slow pace of progress in EU efforts to coordinate measures against a crisis that is more than a year old. Government leaders came up with no concrete plan at a summit last week, delaying decisions to a March 11 meeting in Brussels. But a binding resolution on a comprehensive package likely won't come till another summit on March 24-25. In the absence of a comprehensive eurozone debt strategy investors continue to fret about whether Portugal will be able to ride out the storm or will be forced to follow Greece and Ireland in taking a bailout, adding fresh momentum to the crisis. ___ PepsiCo 4Q net income falls; cuts outlook PORTLAND, Ore. (AP) â¿¿ PepsiCo Inc. lost some fizz Thursday, offering a weak outlook for the year as it saw tough competition, a challenging economy and higher ingredient costs ahead. The outlook disappointed investors and sent shares down.
It comes as the company faces pressure to deliver improved results after spending nearly $11 billion on three acquisitions and making big investments in other strategies.The company also reported a dip in its fourth-quarter net income, but adjusted earnings beat expectations by a penny. Pepsi reported that its net income fell to $1.37 billion, or 85 cents per share, for the quarter. That's down from $1.43 billion, or 90 cents per share, last year. Excluding the impact of several one-time items, the company earned $1.05 per share, beating analyst estimates of $1.04, according to FactSet. Revenue rose 37 percent to $18.16 billion as sales volume grew and it benefited from the acquisition of two of its biggest bottlers. Pepsi's CEO, Indra Nooyi, said the acquisition of two bottlers and push to expand in emerging markets will strengthen its business. But Pepsi also took a cautious tone for the rest of the year. Company leaders said consumers are still feeling pressured by high unemployment. The company, like many of its peers, is also facing major increases in costs for corn and other ingredients â¿¿ volatile factors that threaten its profitability. Pepsi is trying to increase productivity to offset those expenses and doesn't want to raise prices, which could shock cautious consumers. ___ Report: Hackers in China hit Western oil companies BEIJING (AP) â¿¿ Hackers operating from China stole sensitive information from Western oil companies, a U.S. security firm reported Thursday, adding to complaints about pervasive Internet crime traced to the country. The report by McAfee Inc. did not identify the companies but said the "coordinated, covert and targeted" attacks began in November 2009 and targeted computers of oil and gas companies in the United States, Taiwan, Greece and Kazakhstan. It said the attackers stole information on operations, bidding for oil fields and financing.
Yet the report did not offer evidence that the attacks were anything other than the standard flavor of corporate espionage that plagues businesses around the world, which the U.S. and China have both accused each other of being deeply involved in.The fact that oil companies were targeted may speak more to the value of their inside information than any attempt to cause damage to pipelines. McAfee called the attack methods unsophisticated, but said the culprits were patient: they may have been inside the networks for years. ___ Economist: Investors expected Mubarak's ouster CAIRO (AP) â¿¿ An economist says Egyptian President Hosni Mubarak's decision to hand over authority to his vice president but not step down is likely to fuel the fears of international investors already panicked by protests against his regime. John Sfakianakis, chief economist at the Riyadh, Saudi Arabia-based Banque Saudi Fransi, said late Thursday that international investors were looking for Mubarak's speech to provide a clear end to the crisis gripping Egypt. Egypt's economy has been battered by the more than two weeks of protests seeking the ouster of Mubarak's regime. ___ Starbucks CEO Schultz joins Groupon board NEW YORK (AP) â¿¿ Online coupon company Groupon said it elected Howard Schultz, the CEO of Starbucks Coffee Co., to its board amid media reports that it is preparing for an initial public offering in the spring. The Chicago company also said Maveron LLC, a Seattle-based venture capital firm co-founded by Schultz, had invested an undisclosed amount in Groupon alongside the appointment. Private companies typically add outsiders to their boards before going public. Schultz has also served on the boards of online auction site eBay Inc. and drugstore.com, according to Maveron's website. He currently serves on the board of yogurt chain Pinkberry. Schultz helped build Starbucks, left for a while and returned to lead the coffee chain as it struggled during the downturn. He closed stores, laid off workers and launched an instant coffee line and a digital network as he guided the Seattle-based company back to growth.
Schultz's investment follows a $950 million investment from private investors in January, which Groupon planned to use to fund its expansion.Professional social networking site LinkedIn Corp. last month said it planned to raise at least $175 million in an IPO, helping pave the way for the long-awaited IPOs of other websites that help people connect with each other. ___ Greek unemployment at new high as protests go on ATHENS, Greece (AP) â¿¿ Unemployment in Greece hit a new seven-year record and inflation was stuck above 5 percent, as protests continued against the harsh spending cuts and tax increases the government is using to drag the country out of its financial crisis. The Greek Statistical Authority said Thursday that the jobless rate rose to 13.9 percent in November, the highest since monthly figures were first released in 2004 and up from 13.5 percent in October. The agency also said inflation remained at an annual rate of 5.2 percent in January, the same as in December and more than twice the official target for the overall eurozone. After years of budget overspending, Greece was saved from bankruptcy last year by a euro110 billion ($150 billion) loan package from its European partners and the International Monetary Fund that will keep it solvent through mid-2013. In return, the governing Socialists took swift shock measures, cutting pensions and salaries while raising taxes and retirement ages to reduce its runaway budget deficit. ___ By The Associated Press The Dow Jones industrial average lost 10.6 points, or 0.1 percent, to close at 12,229.29. The S&P 500 rose a point, or less than 0.1 percent, to 1,321.87. The Nasdaq composite rose 1.38 to close at 2,790.45. Benchmark West Texas Intermediate crude rose 2 cents to settle at $86.73 per barrel on the New York Mercantile Exchange. Prices climbed as high as $88.28 and dropped as low as $85.96 during the session. In London, Brent crude fell 88 cents to settle at $101.44 a barrel on the ICE Futures exchange.
In other Nymex trading in March contracts, heating oil fell 5.82 cents to settle at $2.7107 a gallon and gasoline fell 5.62 cents to settle at $2.4698 a gallon.