AP Exclusive: Mortgage `robo-signing' goes on
County officials in three states tell The Associated Press that an illegal practice known as "robo-signing" continues in the mortgage industry _ months after banks and mortgage companies promised to stop it.
Last fall, the nation's largest banks suspended foreclosures while they investigated robo-signing. That's the term used when mortgage industry employees forge a signature or sign mortgage documents without reading them.
In one Massachusetts county alone, the office that handles property deeds has received almost 1,300 documents with the name of a known robo-signer.
Critics say it's proof that the mortgage industry hasn't gone far enough to stop fraud.
Fears about debt send gold price to record
NEW YORK (AP) _ Gold's reputation as a safe place for your money sent it above $1,600 for the first time.
Investors are worried about debt problems on both sides of the Atlantic. So they bid gold up $12.30 an ounce Monday to settle at $1,602.40. That's a record for the market price of gold, but below its 1980 peak after adjusting for inflation. An ounce of gold at that time cost $850, or about $2,400 in today's dollars.
Gold is looking better by the day to some investors because debt problems in the U.S. and Europe are making two other so-called safe havens, the dollar and the euro, seem shaky. The U.S. could default on its debt on Aug. 2 if Congress and the White House don't agree to raise the country's borrowing limit. In Europe, investors worry that Greece may default. Italy, Spain and Ireland are also struggling to pay their bills. Defaults could mean losses for the banks that own bonds issued by those countries, and that could trigger widespread disruption in financial markets.
US debt still attractive to overseas investors
WASHINGTON (AP) _ The rest of the world still trusts Uncle Sam to make good on his word.
Bitter and so-far fruitless debate in Washington about America's looming borrowing limit has raised the prospect that in 14 days the U.S. will default on its enormous debt for the first time in history. But foreign investors don't seem too concerned. They bought $38 billion in U.S. government debt in May, increasing their holdings 0.6 percent to $4.51 trillion, the Treasury Department said Monday.
Foreign investors' love of U.S. debt isn't as blind as it might seem, though. Investors expect lawmakers to raise the borrowing limit to avoid a potential global financial crisis. They also expect that the federal government would choose to cut spending if they can't agree on new spending limits, rather than withhold interest payments to bondholders.
US builders' outlook rises after hitting 2011 low
WASHINGTON (AP) _ The outlook among U.S. homebuilders became a bit rosier in June but future prospects for home construction are anything but promising.
An index of builders' outlook for the industry in June rose two points to 15, the National Association of Home Builders said Monday. Any reading below 50 indicates negative sentiment about the housing market. The index hasn't reached 50 since April 2006, the peak of the housing boom.
In May, builder sentiment hit its lowest level in nine months. It's still just seven points above the lowest reading on record, in January 2009.
Cash-strapped builders are struggling to compete with deeply discounted foreclosures and short sales, in which lenders allow borrowers to sell homes for less than what is owed on their mortgages. Lower-than-expected home appraisals are scuttling deals. And loans are harder to come by, with many borrowers required to come up with 20 percent of a home's cost as a down payment.
IBM raises guidance, beats Street estimates
SAN FRANCISCO (AP) _ IBM Corp. raised its income guidance for the year on Monday as earnings in the latest quarter increased 8 percent because of growth in all three of its major product categories.
The results show the strength of the 100-year-old company's efforts to link its mainframes and other computing hardware with its newer businesses, software and services. Those two categories bring in the bulk of IBM's income.
Net income was $3.66 billion, or $3 per share, in the second quarter compared with $3.39 billion, or $2.61 per share, a year ago. Excluding special items, IBM earned $3.09 per share. Analysts expected $3.02 per share.
Revenue increased 12 percent to $26.7 billion, which was above the $25.4 billion that analysts forecast.
Thinking of getting a smaller car? Wait until fall
ANN ARBOR, Mich. (AP) _ Thinking of trading in the clunker in your garage for something that gets better gas mileage? Wait a little longer.
Small car prices, which have set record highs this year, are expected to come down this fall.
Lower gas prices will make people comfortable driving something bigger. Honda and Toyota, which were hurt by the Japan earthquake, will crank up production of small cars. And Japan and Detroit will offer big discounts on smaller models as their lots fill up.
The average new compact car, which cost a record $20,500 in June, should fall to about $19,300 by the end of the year. And the average used compact car should fall from a record $11,300 to about $9,600 over the same time, according to figures compiled by the Kelley Blue Book auto pricing service.
Kelley says small-car prices should start declining in September and drop through the end of the year.
Borders seeks bankruptcy court approval to liquidate all 399 stores
NEW YORK (AP) _ Borders Group is seeking court approval to liquidate its 399 stores after it failed to receive any bids that would keep the 40-year-old chain in operation and canceled an auction process.
Liquidation sales could start as soon as Friday. The U.S. Bankruptcy Court of the Southern District of New York is set to approve the move on Thursday
In a statement, Borders President Mike Edwards said the changing book industry and the economy hastened the chain's demise.
Borders was looking for a new white knight bidder after a $215 million bid by private-equity firm Najafi Cos. dissolved late last week. Creditors and lenders argued the chain would be worth more if it liquidated immediately.
Hilco Merchant Resources and Gordon Brothers Group will liquidate the chain under terms of the agreement.
Cisco to lay off thousands of employees
SAN FRANCISCO (AP) _ Networking equipment maker Cisco Systems Inc. is cutting 6,500 employees _ about 9 percent of its work force _ as it follows up on a plan announced in May to eliminate thousands of jobs to reduce costs and raise profits.
Cisco, which has about 73,400 employees worldwide, said Monday that it will lay off 4,400 people. Another 2,100 employees chose to leave as part of an early-retirement program. The company said the cuts include the elimination of 15 percent of its employees at and above the level of vice president.
Cisco said the cuts will cost it $1.3 billion in severance and termination benefits. The company plans to take the charge over several quarters. It will take $750 million of that, including $500 million for the early-retirement program, during the current quarter.
Cisco will inform employees who have been cut in the U.S., Canada and some other countries during the first week of August.
Poll: Hiring will pick up, growth slow in 2nd half
NEW YORK (AP) _ Economists increasingly expect hiring to pick up in the second half of the year, even as overall growth is likely to slow.
In a quarterly survey by the National Association for Business Economists released Monday, 43 percent of respondents said their firms are likely to increase employment in the next six months, up 3 percentage points from a similar survey done in April and the highest number in a year.
What's more, none of the 73 survey participants said their firms planned significant layoffs, although 8 percent said they expected staff reductions through attrition, an uptick from 4 percent in the April survey. The manufacturing sector had the strongest outlook for more hiring, with transportation, utilities, information and communications next.
By The Associated Press(equals)
The Dow Jones Industrial Average and Nasdaq composite index gave up their gains for the month. The Dow fell 94.57 points, 0.8 percent, to 12,385.16. The Nasdaq fell 24.69 points, or 0.9 percent, to 2,765.11. The Standard and Poor's 500 Index fell 10.70 points, or 0.8 percent, to 1305.44.
Benchmark West Texas Intermediate crude for August delivery gave up $1.31 to settle at $95.93 per barrel on the New York Mercantile Exchange. In London, Brent crude lost $1.21 to settle at $116.05 per barrel on the ICE Futures exchange.
In other Nymex trading for August contracts, heating oil fell 4.103 cents to settle at $3.0777 per gallon and gasoline futures lost 3.19 cents to settle at $3.0974 per gallon. Natural gas added less than a penny to settle at $4.524 per 1,000 cubic feet.