Archive for December, 2009

Stocks Gain as Dollar Falls - CNNMoney.com -- Stocks gained Wednesday, at the end of a choppy session, after the falling dollar boosted commodity stocks and a rise in wholesale inventories and an upgrade of 3M provided some optimism.

The Dow Jones industrial average rose 51 points, or 0.5%. The S&P 500 index added 4 points, or 0.4%. The Nasdaq composite gained 11 points, or 0.5%.

Mortgage Apps Higher After Holiday, Refinances Drive Demand - This week's report indicated an increase in demand for new mortgage loans. The Market Composite Index rose 8.5%, the purchase index was 4.0% higher, and the refinance index jumped 11.1%. Refinances accounted for 74.4% of loan application activity this week, up from 72.1% in previous release. It appears that the general focus on the Thanksgiving holiday prevented borrowers from submitting new loan applications in the previous week, however, because mortgage rates had testing record lows, borrower interest was high and demand carried over into this week's data.

Under President's proposal, homeowners may get up to $12,000 in rebates under a new stimulus plan - President Obama proposed a new program Tuesday that would reimburse homeowners for energy-efficient appliances and insulation, part of a broader plan to stimulate the economy.

Steve Nadel, director at the American Council for an Energy-Efficient Economy, who's helping write the bill, said a homeowner could receive up to $12,000 in rebates.

The proposal is part of the President's larger spending plan, which also includes money for small businesses, renewable energy manufacturing, and infrastructure.

We know energy efficiency "creates jobs, saves money for families, and reduces the pollution that threatens our environment," Obama said. "With additional resources, in areas like advanced manufacturing of wind turbines and solar panels, for instance, we can help turn good ideas into good private-sector jobs."

Stocks drop as global markets slip - CNNMoney.com -- Stocks tumbled Tuesday, with the Dow losing over 100 points as investors eyed weak global markets, a rising dollar, falling oil and gold prices, and some disappointing profit news from 3M, McDonald's and Kroger.

The Dow Jones industrial average tumbled 104 points, or 1%. The S&P 500 index lost 11 points, or 1%. The Nasdaq composite shed 17 points, or 0.8%.

Choppy Day on Wall Street - CNNMoney.com -- Stocks were mixed late Monday at the end of a choppy session impacted by a strong dollar, falling oil and gold prices and comments from Fed Chairman Ben Bernanke that cooled worries about higher interest rates.

The Dow Jones industrial average was barely changed. The S&P 500 index lost 3 points, or 0.3%. The Nasdaq composite shed 5 points, or 0.2%.

Stocks seesawed through the session as investors weighed Bernanke's comments and the direction of the dollar and commodity markets in the aftermath of last week's big payrolls report.

Gold Prices Slip as Dollar Strengthens on Speculation that Fed May Raise Interest Rates Sooner than Expected -  CNNMoney.com --

Gold prices extended their decline for a second straight session Monday as the dollar continued to rise.

Gold for February delivery slid $5.50 to settle at $1,164.00 a troy ounce, after shedding more than $26 earlier in the session.

Gold prices fell sharply Friday after after a much better-than-expected jobs report from the government showed employers trimming a mere 11,000 jobs in November as the unemployment rate ticked down to 10% from 10.2% in the prior month.

Gold prices were pressured by a stronger dollar, as the greenback hit a five-week high against a basket of currencies Monday and also rose against the euro.

The dollar has been boosted by investors' speculation that the Federal Reserve might raise interest rates sooner than expected as the economy shows signs of recovery

Jobless Claims Slide to Near 15-Month Low - CNNMoney.com -- The number of first-time filers for unemployment insurance fell last week to a nearly 15-month low, according to a government report released Wednesday.

There were 457,000 initial jobless claims filed in the week ended Nov. 28, down 5,000 from a revised 462,000 the previous week, the Labor Department said.

That's the lowest level since the week ended Sept. 6, 2008. The week being reported included the Thanksgiving holiday.

Stocks Falter Ahead of Jobs Report - CNNMoney.com -- Stocks zigzagged Thursday in cautious trading ahead of Friday's big jobs report as investors considered the day's economic news, Bank of America's plan to pay back the government $45 billion in aid and the latest from Washington.

Investors were also keeping an eye on the dollar, which fluctuated versus other major currencies, and a joint venture between General Electric and Comcast.

The Dow Jones industrial average lost 86 points, or 0.8%. The S&P 500 index lost 9 points or 0.8%. The Nasdaq composite  rose 12 points, or 0.5%.

Average rates for 30-year and 15-year fixed mortgages fell for the fifth consecutive week, reaching all-time lows - Interest rates on 30-year and 15-year fixed mortgages thus far in 2009 averaged one percentage point below their respective average in 2008.

The 30-year fixed-rate mortgage averaged 4.71% for the week ending Dec. 3 -- the lowest it has been since Freddie Mac began its weekly survey in 1971, BUT HAS BEEN SLOWLY MOVING UP ALL WEEK.

Stocks Struggle After Record - CNNMoney.com -- Stocks struggled Wednesday as investors sought more evidence that a recovery is taking hold, one day after the Dow industrials closed at its highest point in 14 months.

Mixed readings on the labor market, GM's management shakeup and record gold prices above $1,210 an ounce all played a role in the day's trading.

The Dow Jones industrial average lost 19 points, or 0.2%. The blue-chip average ended the previous session at the highest point since Oct. 2, 2008. The S&P 500 index ended little changed. The Nasdaq composite rose 9 points, or 0.4%.

Stocks struggled as investors sorted through the day's news and geared up for the big monthly jobs report due Friday. Ahead of that, investors will keep an eye on Thursday's weekly jobless claims report from the Labor Department.

FHA to Raise FICO Requirements, Reduce Seller Concessions, Increase Premiums and Downpayment - The FHA is taking steps to tighten its lending standards through measures that will impact both borrowers and lenders according to remarks made to congress by HUD Secretary Shaun Donovan today.

Secretary Donovan told members of the House Committee on Financial Services that his department is in the process of drafting new policies to address the quality of FHA's current portfolio, improve the performance of future loans, and restore the capital reserve above its mandated levels.

The agency is looking at several measures to improve the quality of its portfolio going forward. It plans to reduce the maximum permissible seller concession from 6 percent to 3 percent because the current level exposes the FHA to excessive risk by creating incentives to inflate appraised values. The change, he said, will bring FHA into line with industry norms and even further reductions may be considered.

The minimum borrower FICO score will be raised although the final number has not yet been determined. The agency is studying whether new FICO minimums should be accompanied by changes in other underwriting criteria for lower down payment loans.

The up-front cash that a borrower will be required to bring to the table for an FHA-backed loan will also be increased to make sure that borrowers have "skin in the game." The exact way this will be accomplished is still under study.

These proposed changes, Donovan said, only require administrative decisions on the part of HUD, however, Congress will be asked to pass legislation to increase premiums. The current up-front premium of 1.75 percent is below the statutory cap of 3 percent but the annual premium is at the maximum. Raising premiums, he said, is the most effective means of raising capital for the reserve fund with the least impact per borrower.

The secretary reported that the anticipated changes are merely the latest in a series of improvements FHA has made to shore up its lending activities.

Dow at 14-Month High -  CNNMoney.com -- Stocks rallied Tuesday as worries about Dubai's debt problems eased, gold hit a record above $1,200 and GE and Comcast moved closer to a deal on NBC Universal.

The Dow Jones industrial average added 127 points, or 1.2%, closing at the highest point since Oct. 2, 2008. The S&P 500  index gained 13 points, or 1.2%, and closed just short of a 14-month high. The Nasdaq composite rose 31 points, or 1.5%, and remained short of a 14-month high hit a week ago.

Bets that Dubai's debt problems won't have a major impact on U.S. institutions lifted stocks late Monday and through Tuesday's session. Stocks also reacted to the day's better-than-expected economic readings on construction spending and pending home sales.

Home Sales Contracts Higher in October - CNNMoney.com -- Americans are inking a lot of deals to buy homes.

In October the National Association of Realtors recorded an unprecedented ninth consecutive month of increases in the number of signed contracts.

Although these are not closed sales, and some deals can fall through, signed contracts are a good indicator of where the housing market is headed.

Between September and October NAR's Pending Home Sales Index rose 3.7% to 114.1 from 110 in October. But the index is 31.8% higher than a year ago, when it was 86.6. That's the biggest year-over-year gain in the history of the index.

NAR's chief economist, Lawrence Yun, gives much of the credit for increased sales to the homebuyer's tax credit, which first-time homebuyers could claim to reduce their taxes by up to $8,000.