Downside of low US mortgage rates? Less selling
WASHINGTON (AP) – Would-be home sellers across the country are grappling with a once-in-a-lifetime problem: They have mortgage rates so absurdly low it would hurt them financially to sell.
Doing so would mean giving up an irresistible rate in exchange for a new mortgage carrying a rate up to a percentage point higher. Their monthly payments would be larger even for a house of the same price. That’s discouraging some people from selling, thereby limiting the supply of available homes and contributing to slower home sales.
It’s a significant shift from the way the U.S. housing market has worked for the past 30 years. For most of that time, whenever a homeowner decided to trade up to a better home, mortgage rates usually were lower than the last time they had bought. That helped make a new purchase seem more attractive.
Tobacco firms Reynolds, Lorillard in merger talks
RICHMOND, Va. (AP) – Big Tobacco may soon get smaller.
The makers of Camel and Newport cigarettes said Friday they are in talks to combine two of the nation’s oldest and biggest tobacco companies. A deal between Reynolds American Inc. and Lorillard Inc. would create a formidable No. 2 to rival Altria Group Inc., owner of Philip Morris USA. It also could spur a wave of consolidation in the tobacco business, shrink factories and workforces, and push prices for cigarettes higher even as smokers buy fewer of them.
The news follows months of speculation about the possible combination. In separate statements, the companies said no agreement has been reached and there’s no guarantee one will be.
Amazon asks FAA for permission to fly drones
NEW YORK (AP) – Amazon is asking the Federal Aviation Administration permission to use drones as part of its plan to deliver packages to customers in 30 minutes or less.
The news sent shares of the nation’s largest e-commerce company up nearly 6 percent on Friday.
The online retailer created a media frenzy in December when it outlined a plan on CBS’ “60 Minutes” to deliver packages with self-guided aircrafts that seemed straight out of science fiction.
In a letter to the FAA dated Wednesday, Amazon said it is developing aerial vehicles as part of Amazon Prime Air. The aircraft can travel over 50 miles per hour and carry loads of up to 5 pounds. About 86 percent of Amazon’s deliveries are 5 pounds or less, the company said.
World Cup defeat can hurt domestic stock market
LONDON (AP) – Argentina and Germany face off in the World Cup final on Sunday and investors in both countries will do well to be alert to potential drops on their stock markets the day after in case of defeat.
With markets driven by sentiment as well as fundamental factors such as growth, dividend payments and inflation, a big sporting defeat can depress the mood of traders and cause the stock market to underperform.
Alex Edmans, a professor at London Business School and the Wharton School of the University of Pennsylvania, has assessed the impact of major sporting events on market behavior for years and his analysis of this World Cup has confirmed that defeats have generally resulted in declines the day after that are greater than, or counter, to the performance of the wider global market.
Inventor pushes solar panels for roads, highways
SPOKANE, Wash. (AP) – The solar panels that Idaho inventor Scott Brusaw has built aren’t meant for rooftops. They are meant for roads, driveways, parking lots, bike trails and, eventually, highways.
Brusaw, an electrical engineer, says the hexagon-shaped panels can withstand the wear and tear that comes from inclement weather and vehicles, big and small, to generate electricity.
While the idea may sound outlandish to some, it has already garnered $850,000 in seed money from the federal government, raised more than $2 million on a crowd-funding website and received celebrity praise.
Solar Roadways is part of a larger movement that seeks to integrate renewable energy technology – including wind, geothermal and hydropower – seamlessly into society.
Stocks stabilize, but end down for the week
NEW YORK (AP) – U.S. stocks stabilized on Friday and ended with a small gain, but it wasn’t enough to prevent the market’s biggest weekly drop since April.
Investors became more cautious this week as corporate earnings for the April-June period began trickling in. Worrisome news about a Portuguese bank also revived fears of another European debt crisis. That weighed on stocks, which had closed out the previous week at record highs.
Investors are now mulling whether the stock’s market valuations are justified by the outlook for company earnings, or whether they have risen too far, too fast.
As investors try to make sense of the market, “we could be in a holding pattern,” said Kristina Hooper, US Investment Strategist at Allianz Global Investors.
US records $71 billion budget surplus in June
WASHINGTON (AP) – The U.S. government ran a monthly budget surplus in June, putting it on course to record the lowest annual deficit since 2008.
The Treasury Department said Friday that its June surplus totaled $71 billion, following a $130 billion deficit in May. The government also ran a surplus in June 2013, bolstered by dividends from Fannie Mae, the mortgage giant under federal conservatorship for the past six years.
Economists lower forecasts for US growth
WASHINGTON (AP) – U.S. business economists have sharply cut their growth forecasts for the April-June quarter and 2014, though they remain optimistic that the economy will rebound from a dismal first quarter.
The average forecast for growth in the second quarter has fallen to 3 percent, according to a survey released Friday by the National Association for Business Economics. That’s down from 3.5 percent in a June survey. Growth in 2014 as a whole will be just 1.6 percent, they project, sharply below a previous forecast of 2.5 percent. If accurate, this year’s growth would be the weakest since the Great Recession.
White House: 2014 US deficit to drop $100B
WASHINGTON (AP) – The US government’s budget deficit will drop to $583 billion this year, the lowest level of President Barack Obama’s tenure, the White House said Friday.
Last year’s deficit was $680 billion. The latest update from the White House budget office is also $66 billion less than the administration predicted earlier this year when releasing the president’s budget.
House votes to make business tax break permanent
WASHINGTON (AP) – The House voted Friday to make permanent a temporary tax break that makes it easier for businesses to invest in new equipment, one of many expired tax breaks that Congress must deal with by the end of the year.
The tax break allows businesses to more quickly write off the costs of new equipment, making it popular among business groups. But the White House has threatened a veto because the bill would add $287 billion to the budget deficit over the next decade.
The House approved the bill by a vote of 258-160.
The tax break, known as bonus depreciation, has been around for years, though it has always been temporary. The latest version was enacted in 2008 to help jumpstart the economy.
US given heads up about newspaper data destruction
WASHINGTON (AP) – The Obama administration knew in advance that the British government would oversee destruction of a newspaper’s hard drives containing leaked National Security Agency documents last year, newly declassified documents show.
The White House had said it would be nearly unimaginable for the U.S. government to do the same to an American news organization.
The Guardian newspaper, responding to threats from the British government in July 2013, destroyed the data roughly a month after it and other media outlets first published details from the top secret documents leaked by former NSA contractor Edward Snowden.
By The Associated Press(equals)
The Dow Jones Industrial average rose 28 points, or 0.2 percent, to finish at 16,943. The Standard & Poor’s 500 index rose two points, or 0.2 percent, to 1,967. The Nasdaq composite rose 19 points, or 0.4 percent, to 4,415.
Benchmark U.S. crude for August delivery fell $2.10 cents to close at $100.83 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils used by many U.S. refiners, fell $2.01 to close at $106.66 on the ICE Futures exchange in London. Wholesale gasoline fell 4.9 cents to close at $2.909 a gallon. Natural gas rose 2.6 cents to close at $4.146 per 1,000 cubic feet. Heating oil fell 3.2 cents at $2.861 a gallon.