Business Highlights

AP News
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Posted: Feb 27, 2012 5:54 PM
Business Highlights

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Sales contracts for homes rose 2 percent in January

WASHINGTON (AP) _ The number of Americans who signed contracts to buy homes rose in January to the highest level in nearly two years, supporting the view that the housing market is gradually coming back.

The National Association of Realtors said Monday that its index of sales agreements rose 2 percent last month to a reading of 97. That's the highest reading since April 2010, the last month that buyers could qualify for a federal home-buying tax credit.

A reading of 100 or higher is considered healthy.

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Detroit automakers race to keep up with sales

DETROIT (AP) _ Auto sales are growing so fast that Detroit can barely keep up.

Three years after the U.S. auto industry nearly collapsed, sales of cars and trucks are surging. Sales could exceed 14 million this year, topping last year's 12.8 million.

The result: Carmakers are adding shifts and hiring thousands of workers around the country. Carmakers and parts companies added more than 38,000 jobs last year, reaching a total of 717,000. And automakers have announced plans to add another 13,000 this year, mostly on night shifts.

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Gulf oil spill trial delayed for settlement talks

NEW ORLEANS (AP) _ A judge has delayed the federal trial over the worst U.S. offshore oil disaster for a week, saying that BP PLC was making some progress in settlement talks with a committee overseeing scores of lawsuits.

Two people close to the case told The Associated Press that the decision was made Sunday during a conference call between parties in the Gulf of Mexico oil spill case and U.S. District Judge Carl Barbier. They spoke on condition of anonymity because they were not authorized to discuss the call.

They said the judge told those on the call that BP and the Plaintiffs' Steering Committee were "making some progress" in their settlement talks. The steering committee is overseeing lawsuits filed by individuals and businesses following the explosion on the Deepwater Horizon rig on April 20, 2010. The blast killed 11 workers, injured 17 and led to 206 million gallons of oil spewing from the blown-out well.

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Mild winter warms Lowe's 4Q profit

NEW YORK (AP) _ Lowe's Cos. said Monday that its fourth-quarter net income rose 13 percent, better than analysts expected, as homeowners took on more home-improvement projects during unusually mild winter months.

The results are another sign that the housing sector may be slowly improving. Last week larger rival Home Depot Inc. reported its fourth-quarter profit rose for similar reasons.

"We have seen an uptick in activity," Lowe's CEO Robert Niblock said in a telephone interview. "We did have favorable weather, but even beyond that there's a greater willingness of the consumer to spend."

Home repair and maintenance are still the biggest projects people take on, he said, with demand for larger-scale renovations such as kitchen remodeling lagging, Niblock said.

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Nokia pins hopes on cheaper Windows smartphone

BARCELONA, Spain (AP) _ Struggling cellphone maker Nokia kicked off the world's largest mobile phone trade show Monday by unveiling a new low-cost Windows smartphone that cellphone companies could give away free to customers, and another aimed at consumers demanding better photo quality.

CEO Stephen Elop told reporters at the Mobile World Congress in Barcelona that the new phones _ a $254 smartphone that runs on Windows software and a handset with a high-resolution 41 megapixel camera _ demonstrate "the actions necessary to improve the fortunes of Nokia."

"With great products for consumers, I think the rest will fall into place," Elop said.

In many countries, cellphone companies subsidize the sale of smartphones to customers who sign contracts. The low price of the new phone means their out-of-pocket costs would be low, even if they give the handset away.

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Buffett says stocks, homes are fairly cheap now

OMAHA, Neb. (AP) _ Billionaire Warren Buffett said Monday that stocks remain relatively cheap compared to other investments as the economy continues to improve. He also said that the company he heads is prepared to replace him whenever the need arises.

The chairman and chief executive of Berkshire Hathaway Inc. addressed a variety of topics during an interview on the cable TV network CNBC, two days after his annual letter to the conglomerate's shareholders was released.

Buffett said even though stocks aren't as cheap as they were during the depths of the recession in 2008, they're still a more attractive long-term option than bonds, gold, cash or anything else.

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Government moves to convert foreclosures to rentals

WASHINGTON (AP) _ The government is looking to sell off some of its stock of homes in foreclosure.

The Federal Housing Finance Agency has control over roughly 250,000 foreclosed homes owned by Fannie Mae. One percent of those homes _ 2,500 _ will be available for investors to buy and convert into rentals.

Officials say the foreclosure-to-rental program can help reduce credit losses and stabilize home values. Homes in foreclosure sell at a 20 percent discount on average, which can hurt surrounding home values.

Investors can submit applications to purchase properties owned by Fannie Mae in some of the nation's hardest hit metro areas _ Atlanta, Chicago, Las Vegas, Phoenix and parts of Florida.

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Economists see more reasons for optimism this year

NEW YORK (AP) _ Economists are increasingly confident that some pillars of the U.S. economy will improve this year, but they still remain cautious in their expectations on the overall pace of economic growth.

The National Association for Business Economics said Monday that forecasters have raised their expectations for employment, new home construction and business spending this year. But they held on to their average prediction that America's gross domestic product, or GDP, will grow at a rate of 2.4 percent. That's a slight improvement from 2011, when economists believe the economy grew 1.6 percent. Final economic growth numbers for 2011 are due out Wednesday.

GDP reflects the economy's total output of goods and services. The latest forecast is in line with one issued by the group in November that called for the economy to grow 2.4 percent this year. Forecasters predict growth will be stronger in the second half of 2012 than it will be through June.

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German lawmakers approve new Greek bailout

BERLIN (AP) _ The German parliament approved a second, $173 billion loan package for Greece on Monday after Chancellor Angela Merkel warned lawmakers that it would be irresponsible to abandon the country to bankruptcy.

Although the motion was expected to be easily approved _ the final tally Monday was 496-90 with five abstentions _ the idea of bailing out Greece has remained very unpopular in Germany, Europe's biggest economy, among the public and many politicians.

The rescue package is Greece's second in less than two years and also involves private-sector investors accepting total losses of more than 70 percent on the bonds they hold, along with tough new austerity measures.

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By The Associated Press(equals)

The Dow Jones industrial average lost 1.44 points and closed at 12,981.51. The Standard & Poor's 500 index rose 1.85 points to 1,367.59, a 3 1/2-year high. The Nasdaq composite index rose 2.41 points to close at 2,966.16, its highest since December 2000.

Benchmark crude fell by $1.21 to end the day at $108.56 per barrel in New York. Brent crude, which is used to price oil that's imported by U.S. refineries, lost $1.30 to finish at $124.17 per barrel in London.

In other energy trading, heating oil fell by 3 cents to finish at $3.29 per gallon and gasoline futures lost 2 cents to end at $3.13 per gallon. Natural gas futures fell by 10 cents to finish at $2.45 per 1,000 cubic feet.