Home sales fell 9.6 pct. in February
WASHINGTON (AP) _ Fewer Americans bought previously occupied homes in February and those who did purchased them at steep discounts. The weak sales and rise in foreclosures pushed home prices down to their lowest level in nearly nine years.
The National Association of Realtors said Monday that sales of previously occupied homes fell last month to a seasonally adjusted annual rate of 4.88 million. That's down 9.6 percent from 5.4 million in January. The pace is far below the 6 million homes a year that economists say represents a healthy market.
Nearly 40 percent of the sales last month were either foreclosures or short sales, when the seller accepts less than they owe on the mortgage.
One-third of all sales were purchased in cash _ twice the rate from a year ago. In troubled housing markets such as Las Vegas and Miami, cash deals represent about half of sales.
The median sales price fell 5.2 percent to $156,100, the lowest level since April 2002.
Citi resumes dividend, will do reverse stock split
NEW YORK (AP) _ Citigroup Inc., one of the worst-hit banks during the financial crisis, is taking more steps to get back in the good graces of shareholders.
The bank will reinstate a quarterly dividend, albeit just a penny per share, and reduce the amount of shares it has outstanding. This second maneuver, called a "reverse stock split," will lift the company's stock price and allow more institutional investors to own it.
Many large investors like pension funds and mutual funds are barred from owning stocks that trade below $5, which has been the case with Citi since early 2009. Under Citi's plan announced Monday, every 10 shares of its stock will be exchanged for one new share as of May 6. That will lift the price of each share of Citi stock by 10 times. Since there will be 10 times fewer shares outstanding, the overall value of the company will remain the same.
The amount of Citi shares outstanding will drop to 2.9 billion from 29 billion, which will also make the dividend payout lighter on Citi's pocket.
AT&T to buy T-Mobile USA for $39 billion
NEW YORK (AP) _ AT&T Inc. said Sunday it will buy T-Mobile USA from Deutsche Telekom AG in a cash-and-stock deal valued at $39 billion that would make it the largest cellphone company in the U.S.
The deal would reduce the number of wireless carriers with national coverage from four to three, and is sure to face close regulatory scrutiny. It also removes a potential partner for Sprint Nextel Corp., the struggling No. 3 carrier, which had been in talks to combine with T-Mobile USA, according to Wall Street Journal reports.
AT&T is now the country's second-largest wireless carrier and T-Mobile USA is the fourth largest. The acquisition would give AT&T 129 million subscribers, vaulting it past Verizon Wireless' 102 million. The combined company would serve about 43 percent of U.S. cellphones.
Economic aftershocks of Japan quake roil Asia
Economic aftershocks of the devastation in Japan are rolling through Asia. It is here, among Japan's neighbors, that the reverberations of the catastrophe are being felt hardest.
Automakers in Thailand are slowing production. South Korean electronics manufacturers face shortages of critical parts. Thousands of Japanese have canceled trips to Taiwan. Panic buying has driven up prices of Japanese cameras in China, while Indian policymakers brace for higher oil prices.
The 9.0-magnitude quake and tsunami that laid waste to Japan's industrial northeast on March 11 and triggered an unfolding crisis at a crippled nuclear power plant has exacted a terrible human toll with estimates of more than 10,000 dead and hundreds of thousands homeless. It might also undermine Japan _ and China _ as manufacturing bastions as the catastrophe gives global companies further reason to spread suppliers over more countries to avoid reliance on a handful of production powerhouses.
Tiffany cuts 1Q outlook on Japan store closings
NEW YORK (AP) _ Tiffany & Co. is reducing its first-quarter earnings forecast as it deals with some store closings and limited hours in Japan in the wake of the earthquake and tsunami there.
The dimmer outlook provided on Monday came as strong holiday demand and healthy results both domestically and abroad helped push the company's fourth-quarter net income up 29 percent.
Tiffany is one of the U.S. retailers most exposed to Japan's economy and appetite for luxury goods. Of Tiffany's 233 stores, almost a quarter of them _ 56 _ are in Japan. It's also one of the first companies to specify the business impact of the quake.
The jewelry maker known for its turquoise box now expects first-quarter earnings of about 57 cents per share, down from a previous forecast of 62 cents per share.
Analysts surveyed by FactSet predicted lower earnings of 55 cents per share.
Europe agrees on financing for future bailout fund
BRUSSELS (AP) _ The eurozone's 17 finance ministers agreed Monday on how to finance the region's future bailout fund, slightly lowering the contributions that poorer states have to pay into it.
Nations that use the common euro currency will give the new European Stability Mechanism a capital base of 80 billion euros ($114 billion) and provide 620 billion euros ($880 billion) in callable capital and guarantees, said Olli Rehn, the European Union monetary affairs commissioner.
The ESM will start in mid-2013, succeeding the eurozone's existing bailout fund, the European Financial Stability Facility. European policymakers hope the existence of a rescue mechanism for countries that run into financial trouble after 2013 will help counter any doubts over the credibility of the euro.
Investors were keen to know the details of the future fund amid doubts that Europe will have solved its debt crisis _ which has already pushed Greece and Ireland into multibillion-euro bailouts _ by 2013.
Treasury: Will begin selling mortgage securities
WASHINGTON (AP) _ The Treasury Department announced Monday that it will begin selling its remaining $142 billion in holdings of mortgage-backed securities purchased during the financial crisis.
Treasury officials said the first sales of up to $10 billion in the securities, primarily issued by troubled mortgage companies Fannie Mae and Freddie Mac, would start this month.
Assistant Treasury Secretary Mary Miller said the sales represented a continuation of efforts by the government to wind down the emergency programs put in place in 2008 and 2009 to help restore market stability.
Treasury estimated it could bring in an additional $15 billion to $20 billion over what it paid for the $142 billion in mortgage-backed securities it currently holds. However, that amount would still leave the government with heavy losses from the rescue of Fannie and Freddie in September 2008.
General Motors lays off workers at NY plant
DETROIT (AP) _ General Motors Co. on Monday said it is halting some production and temporarily laying off workers at a Buffalo, N.Y., engine plant, another sign that Japan's disaster is affecting automakers around the globe.
GM's Tonawanda plant in Buffalo makes four- and five-cylinder engines for the Chevrolet Colorado and GMC Canyon compact pickups, which are assembled at a GM plant in Shreveport, La. GM has shut down the Shreveport plant this week because of a shortage of parts from Japan.
Charles Schwab buys OptionsXpress for $1B
SAN FRANCISCO (AP) _ Charles Schwab said Monday it is buying online brokerage services provider OptionsXpress for $1 billion in a move to capitalize on the profitable business of options trading.
The deal helps Schwab bolster its options trading business, which is becoming increasingly popular with online traders. The company said its options trading clients "tend to be among the larger, more active and longer-standing" of their clients. OptionXpress adds to that client base and Schwab will be able to offer them additional investing, brokerage and banking services.
By The Associated Press
The Dow Jones industrial average rose 178.01 points, or 1.5 percent, to 12,036.53.
The S&P 500 index gained 19.18, or 1.5 percent, to 1,298.38. The Nasdaq composite rose 48.42, or 1.8 percent, to 2,692.09.
Benchmark West Texas crude for May delivery gained $1.24 to settle at $103.09 per barrel on the New York Mercantile Exchange. The April contract, which ends Tuesday, rose $1.26 to settle at $102.33 per barrel.
In other Nymex trading for April contracts, heating oil gained 2.82 cents to settle at $3.0525 per gallon and gasoline futures added 4.8 cents to settle at $2.9974 per gallon. Natural gas lost less than a penny to settle at $4.161 per 1,000 cubic feet.
In London, Brent crude rose $1.14 to settle at $114.91 per barrel.