Archive for December, 2009

Stocks End Higher for 4th Day -  CNNMoney.com -- Stocks held on to modest gains Wednesday, closing higher for a fourth day, as strength in technology shares and commodities offset concerns about the housing market.

The Dow Jones industrial average rose 1 point, or less than 0.1%. The S&P 500 index gained about 2 points, or 0.2%. Both indexes are within range of fresh 14-month highs. The Nasdaq composite rose 17 points, or 0.7%, closing at a fresh 15-month high.

Stocks slid in early trading after the government said sales of new homes unexpectedly plunged in November, raising worries about the economic recovery. A separate report showed personal incomes and spending both rose at a slower-than-expected pace last month. But a survey of consumer sentiment rose to a 3-month high.

The market regained ground in the afternoon as a rally in the oil market helped boost shares of energy producers and industrial companies.

Oil prices surged nearly 3% after government data showed the nation's supplies of crude fell last week. Gold also rose as the dollar softened against rival currencies. Bond prices were mixed.

New Home Sales Plunge in November - New home sales unexpectedly plunged in November, according to a dismal government report.

The seasonally adjusted annual rate of new home sales plummeted 11.3% to 355,000 in November compared to the prior month, a Census Bureau report said Wednesday.

The November rate was the lowest since April, when new homes sold at an annualized rate of 345,000.

Stocks Push Higher in Light Trading - CNNMoney.com -- Stocks rose for a third day Tuesday, with the Dow and S&P 500 ending just below 14-month highs, after two economic reports continued to fuel optimism about the economy in a thin trading session.

The Dow Jones industrial average gained 51 points, or 0.5%. The S&P 500 index rose 4 points, or 0.3%. Both gauges are near their highest levels since October 2008. The S&P 500 briefly traded above its 14-month high during the session. The Nasdaq composite, advanced 12 points, or 0.5%, to close at its highest level since September 2008.

Oil recovered from earlier losses to close above $74. Gold continued to fall as the dollar firmed against rival currencies. Bond prices rose.

Stocks opened on an upbeat note after a government report showed the economy grew in the third quarter, although at a more tepid pace than forecast. The advance gained steam after an industry report showed sales of existing homes rose in November to the highest level in three years. But stocks settled into a narrow range during the afternoon amid a lack of market moving news

Existing Home Sales Surge in November - In last month's report, existing-home sales surged 10.1 percent to an annual rate of 6.10 million units in October from a downwardly revised pace of 5.54 million in September. Sales activity is at the highest pace since February 2007 when it hit 6.55 million. Total housing inventory at the end of October fell 3.7 percent to 3.57 million existing homes available for sale, which represents a 7.0-month supply at the current sales pace, less than the revised for the worse 8.0-month supply which was reported in September. The national median existing-home price for all housing types was $173,100 in October, down 7.1 percent from October 2008. In November, the NAR reports that sales of previously owned homes rose 7.4% to an annual rate of 6.54 million sales. Single family homes led the overall index higher, recording an uptick from 5.32 million sales to 5.77 million annual sales. While single family unit sales were up 8.5%, Condo sales were unchanged from last month's print. Also, both metrics improved at a slower pace than the October/September month over month gains.

Stocks Push Higher in Light Trading - CNNMoney.com -- Stocks rose for a third day Tuesday, with the Dow and S&P 500 ending just below 14-month highs, after two economic reports continued to fuel optimism about the economy in a thin trading session.

The Dow Jones industrial average gained 51 points, or 0.5%. The S&P 500 index rose 4 points, or 0.3%. Both gauges are near their highest levels since October 2008. The S&P 500 briefly traded above its 14-month high during the session. The Nasdaq composite, advanced 12 points, or 0.5%, to close at its highest level since September 2008.

Oil recovered from earlier losses to close above $74. Gold continued to fall as the dollar firmed against rival currencies. Bond prices rose.

Stocks opened on an upbeat note after a government report showed the economy grew in the third quarter, although at a more tepid pace than forecast. The advance gained steam after an industry report showed sales of existing homes rose in November to the highest level in three years. But stocks settled into a narrow range during the afternoon amid a lack of market moving news

Existing Home Sales Surge in November - In last month's report, existing-home sales surged 10.1 percent to an annual rate of 6.10 million units in October from a downwardly revised pace of 5.54 million in September. Sales activity is at the highest pace since February 2007 when it hit 6.55 million. Total housing inventory at the end of October fell 3.7 percent to 3.57 million existing homes available for sale, which represents a 7.0-month supply at the current sales pace, less than the revised for the worse 8.0-month supply which was reported in September. The national median existing-home price for all housing types was $173,100 in October, down 7.1 percent from October 2008. In November, the NAR reports that sales of previously owned homes rose 7.4% to an annual rate of 6.54 million sales. Single family homes led the overall index higher, recording an uptick from 5.32 million sales to 5.77 million annual sales. While single family unit sales were up 8.5%, Condo sales were unchanged from last month's print. Also, both metrics improved at a slower pace than the October/September month over month gains.

Dow in Positive Territory For December - CNNMoney.com -- Stocks rallied Monday, pushing the Dow back into positive territory for the month as investors cheered a combination of analyst upgrades and corporate deal-making.

The Dow Jones industrial average gained 85 points, or 0.8%. The blue-chip average is now up 0.7% for December. The S&P 500 index rose 11 points, or 1.1%. The Nasdaq composite advanced 26 points, or 1.2%, to its highest level since September 2008.

Dollar Rises With Stocks - CNNMoney.com -- The dollar edged up against major currencies on Monday, following stocks higher after the health care bill passed a key vote in the Senate.

"The movement in equities indicates that the dollar is rising because of the more optimistic outlook people have for the U.S. economy," said Kathy Lien, director of currency research at Global Forex Trading.

Trading is expected to be thin during the holiday week, she said. As a result, the dollar is likely to remain within a predictable range. "The dollar is holding onto its gains," she said. "There's no U.S. economic data on the calendar today, so nothing is really stopping it from rising."

OTS and OCC Report Another Uptick in Mortgage Delinquencies - The Offices of Thrift Supervision (OTC) and Comptroller of the Currency (OCC) reported that banks and thrifts implemented twice as many new home retention actions as foreclosures during the third quarter of 2009.

In spite of the uptick in modifications, an increase of 67 percent over the second quarter, much of the data reported in the OCC and OTS Mortgage Metrics Report which covers about 65 percent of the mortgages outstanding in the country, was grim. Current and performing mortgages in the portfolio covered by the report dropped to 87.2 percent compared to 88.6 in the second quarter. This is the sixth consecutive quarter that performance declined. One year earlier, in Q3 2008 91.5 of the portfolio was current and performing. Serious delinquencies rose to 6.2 percent from 5.3 percent in the second quarter and there are 1 million mortgages in foreclosure, about 3.2 percent of the portfolio, an increase of 100,000 during the quarter.

Government guaranteed loans, primarily those obtained through the Federal Housing Administration and the Veterans Administration, showed higher delinquency rates than the portfolio as a whole. 8.2 percent of government guaranteed mortgages were delinquent, up from 7.5 percent in the preceding quarter and an additional 2.5 percent were in foreclosure.

Unemployment Claims Rise Unexpectedly - CNNMoney.com -- The number of Americans filing for initial unemployment insurance rose last week, the government said Thursday. Analysts had expected a decline.

There were 480,000 initial job claims filed in the week ended Dec. 12, up 7,000 from the previous week's revised 473,000, the Labor Department said today.

The 4-week moving average of initial claims totaled 467,000, down 5,250 from the previous week's revised average of 472,750.

This marks the second consecutive week that claims have climbed. But weekly claims have proven to be volatile with some pops but overall maintaining a downward trajectory. Analysts say that's normal for this time of year.

Stocks Slump on Global Jitters - Stocks closed sharply lower Thursday after Greece received another credit downgrade and the dollar rose on the U.S. central bank's cautious comments.

The Dow Jones industrial average fell 133 points, or 1.3%. Declines were broad based, with 28 of the 30 Dow components ending lower.

The S&P 500 index lost 13 points, or 1.2%. The Nasdaq composite slipped 27 points, or 1.2%.

The stock slump came as the dollar rebounded 1.3% against the euro, to its highest levels since September. The greenback was also up sharply on the pound and slightly higher against the yen.

Fannie and Freddie Report Rising Rates Last Week - Mortgage interest rates increased during the week ended December 17 as the economy showed continued signs it is climbing out of the recession.

According to the Primary Mortgage Market Survey conducted by Freddie Mac, the interest rate for the 30-year fixed-rate mortgage (FRM) jumped to 4.94 percent with 0.7 point from an average of 4.81 percent with 0.7 point during the week ended December 10.

The increase in the rate for the 15-year FRM was less sharp but rates did average 4.38 percent with 0.6 point compared to 4.32 percent with 0.6 point the week before.

The rate for the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) increased by 11 basis points to 4.37 percent. Fees and points were unchanged at 0.6 point.

The 1-year Treasury-indexed ARM rose to 4.34 percent with 0.5 point from 4.24 percent also with 0.5 point.

Fed: Rates to Stay Low - CNNMoney.com -- The Federal Reserve kept its key interest rate near 0% and appeared ready to do so for the foreseeable future, after declaring Wednesday that despite signs of improvement, the nation's economy is likely to remain weak.

The fed funds rate is used as a benchmark to determine interest paid by consumers on credit cards and home equity loans, as well as the rate paid on many business loans.

Stocks Skid After Fed Holds Rates - CNNMoney.com -- Stocks ended mixed Wednesday after the Federal Reserve left interest rates unchanged, saying market conditions were helping the recovery but weakness will persist.

The Dow Jones industrial average fell 11 points, 0.1%. The S&P 500 index rose 1 point, or 0.1%, while the Nasdaq composite gained 6 points, or 0.3%.

Refinance Loan Apps Up on Week, Purchase Demand Down 3.6% - In the most recent release, new loan application activity increased 0.3 percent on a seasonally adjusted basis from the week ending December 4. The Refinance Index increased 0.9 percent while the Purchase Index decreased 3.6 percent from a week earlier. On an unadjusted basis the Market Composite Index was 0.3 percent lower than the previous week.

Wall Street Breaks Win Streak - CNNMoney.com -- Bank shares led a late-session selloff Tuesday, breaking Wall Street's four-session win streak, as investors mulled mixed reports on inflation and manufacturing and opted to step back.

The first day of the Federal Reserve's two-day policy meeting and a stronger dollar were also in focus. The Dow Jones industrial average  fell 49 points, or 0.5%. The S&P 500 index lost 6 points, or 0.6%. The Nasdaq composite slipped 11 points, or 0.5%.

Treasury prices fell, raising the yield on the 10-year note to 3.6% from 3.55% late Monday. Treasury prices and yields move in opposite directions.

Home Builder Confidence Still Unable to Gain Momentum - Builders continue to be skeptical about the near term prospects of the real estate market according to details from the December National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released on Tuesday.

The overall Index which shows builders perception of the market was 16, one point lower than in November and the lowest point since June. Any score over 50 indicates that more builders view market as good rather than poor, a condition that hasn't existed in several years.

Builders had a brighter outlook in the Northeast region where the HMI gained three points to score 23. The West was up one point to 19. Builders in the Midwest took the dimmest view of their prospects - the index declined two points to 12. The South was unchanged at 17.

Wall Street Jumps to 14-Month Highs - CNNMoney.com -- Stocks gained Monday, with the three leading indexes closing at 14-month highs, after Citigroup said it will pay back government bailout funds and Dubai received $10 billion to cover its debt, easing worries the emirate might default on billions it owes.

The weak dollar also helped, lifting commodity shares and the stocks of companies that do a lot of business overseas.

The Dow Jones industrial average rose 30 points, or 0.3%, closing at the highest point since Oct. 1, 2008.

The S&P 500 index gained 8 points, or 0.7%, closing at the highest point since Oct. 2, 2008. The Nasdaq composite rose 22 points, or 1%, closing at the highest point since Sept. 19, 2008.

MBA Expects Higher Rates and Less Originations. Labor Market is Biggest Variable in Housing Forecast - Slowly rising interest rates coupled with relatively stagnant home sales will have repercussions in the mortgage industry over the next few quarters according to the Mortgage Bankers Associations (MBA) Mortgage Finance Forecast for the Fourth Quarter of 2009.

This is how the MBA opened their December 2009 Mortgage Finance Outlook:

"The most important factor driving recent declines in real estate market activity and increases in delinquencies and foreclosures has been the ongoing job losses and rising unemployment rates stemming from the most severe recession the country has experienced in a generation. The central question in any forecast for the housing and mortgage markets is the outlook for the job market: when will companies begin hiring again?"

"Property values will not recover until the overhang of unsold inventory returns to normal levels, reducing the excess supply. This excess supply will remain unless and until homebuyers return to the market in force. Even though affordability remains near record levels, there has not been any strong indication that the demand for homes is recovering. However, it is important to remember that affordability is a three-legged stool. Mortgage rates, home prices, and household incomes all impact affordability. Today, mortgage rates remain near record lows, and with the continued decline in home prices, for those with resources, it is a buyers’ market like we haven’t seen in years. Obviously, the problem is that there are not enough potential homebuyers who have the income and downpayment, and who feel confident both that the housing market will recover, and that their job situation is secure, to boost demand despite the improvements in affordability."

MBA economists expect long term mortgage interest rates to raise slowly from the average of 4.9 percent expected for the fourth quarter to 5.2 percent in the first quarter of 2010 and 5.7 percent in the fourth quarter. Rates will climb to 6.0 percent during the second quarter of 2011.

Stocks in Broad-Based Rally - CNNMoney.com -- Stocks rallied Thursday as investors sorted through a bevy of reports on jobs, housing, net worth and the deficit -- and opted to scoop up a variety of shares.

The Dow Jones industrial average rose 69 points, or 0.7%. The S&P 500 index added 6 points, or 0.6%. The Nasdaq composite gained 7 points, or 0.3%.

Stocks rose more sharply in the first minutes of trade, with the Dow adding as much as 107 points on the weak dollar. But the dollar seesawed throughout the session, cutting into gains.

The weak dollar has helped stocks rally over the past nine months, with the S&P 500 now up 62% from 12-year lows hit on March 9. The weaker dollar has given a boost to dollar-traded commodity shares and the stocks of companies that do business overseas.

But in the last few weeks, the dollar has zigzagged and so have stocks. Stocks have also been volatile due to the lighter trading volume this month, with many investors opting to coast through year end rather than shake up their portfolios at the end of the tumultuous year.

Unemployment Claims Jump Unexpectedly - CNNMoney.com -- The number of Americans filing for initial unemployment insurance jumped last week, the government said Thursday, with a figure that was above analysts' expectations.

There were 474,000 initial job claims filed in the week ended Dec. 5, up 17,000 from the previous week's unrevised 457,000, the lowest level since September 2008, the Labor Department said in its weekly report. 

HAMP Report: Few Loan Modifications Made Permanent - The Treasury Department released data Thursday on activity in its Making Home Affordable (HAMP) program during the month of November. As expected from earlier comments made by Treasury officials, borrowers continued to enter the program under trial modifications, but the rate of permanent modifications remains well below expectations.

Cumulative figures for the program by the end of November show participating servicers had sent a total of 3,137,548 requests for financial information to borrowers thought eligible for the foreclosure prevention program and had extended 1,032,827 invitations to participate in a trial modification program, up from 920,000 in October.

There are currently 728,408 borrowers actively participating in loan modifications, however, only 4.3 percent of those modifications, or 31,382, have been converted to permanent status.