Accord near on mortgage rate freeze
By Times Wires
Published December 4, 2007
Treasury Secretary Henry Paulson said Monday an agreement was near on a proposal to help thousands of at-risk homeowners avoid foreclosures by temporarily freezing their mortgage rates.One of the last remaining issues to be resolved, officials said, was the exact length of time the low-teaser rates will be frozen. Speaking at a national housing conference and in later interviews, Paulson expressed optimism that an agreement could be reached very soon, possibly before the end of this week. Paulson and federal regulators have been holding talks with some of the country's biggest banks, mortgage investors and consumer groups trying to strike a deal in an effort to prevent an avalanche of threatened foreclosures in the coming year from sinking the overall economy. An estimated 2-million subprime mortgages, loans offered to borrowers with spotty credit histories, are scheduled to reset to much higher levels by the end of 2008. Those resets will push the payment on a typical mortgage up by $350 per month, taking it from $1,200 currently to $1,550.
Manufacturinggrows in November
U.S. manufacturing expanded in November as new orders and production improved, but weakness in employment suggested that industrial jobs may not be as plentiful in coming months. The Institute for Supply Management, a Tempe, Ariz.-based trade group, said Monday that its manufacturing index registered 50.8 last month, down from 50.9 in October. A reading above 50 indicates growth; below that spells contraction. The November results, which marked the 10th consecutive monthly expansion, were slightly stronger than the 50.1 expected by analysts polled by Thomson/IFR Markets.
Five airlines drop latest fare increase
United Airlines led five of the largest U.S. carriers in rescinding a $20 round-trip increase on most U.S. fares after rival Continental Airlines Inc. didn't adopt it. Airlines often drop fare boosts that aren't matched by others to remain competitive. UAL Corp.'s United on Sunday night pulled the higher prices, which were begun as a fuel-surcharge increase by Atlanta-based Delta on Nov. 26. American, Delta, Northwest Airlines Corp. and US Airways Group Inc. all rolled back the increase Monday, spokesmen said. U.S. carriers have been trying to raise fares to help offset a 48 percent surge this year in jet fuel prices. The largest airlines have successfully boosted ticket prices seven times since Sept. 1.
Lower earnings ahead for retailers
The slowest holiday shopping season in five years may signal disappointing earnings well into next year for U.S. retailers including Target Corp., J.C. Penney Co. and Dillard's Inc. Goldman Sachs Group Inc. analysts lowered earnings projections for the year ending in early 2009 at 12 retailers last week. The average estimates for the five biggest U.S. department stores, led by Sears Holdings Corp., have declined the past four weeks, according to data compiled by Bloomberg. "Everyone is cutting numbers," Jon Fisher, who helps manage $22-billion, including retailers' shares, at Fifth Third Asset Management in Minneapolis, said Friday. "The pace seems to be accelerating as analysts are scrambling to play catchup. In two or three months, we are going to see the companies themselves cutting numbers."
T-bill rates fall
Interest rates on short-term Treasury bills fell in Monday's auction with rates on six-month bills falling to the lowest level in 2 1/2 years. The Treasury Department auctioned $21-billion in three-month bills at a discount rate of 3.030 percent, down from 3.175 percent last week. Another $20-billion in six-month bills was auctioned at a discount rate of 3.190 percent, down from 3.340 percent last week. The three-month rate was the lowest since Aug. 20. The six-month rate was the lowest since June 20, 2005.