Stocks ended mostly lower Monday as drops in prices for oil and other commodities had investors worrying again that demand for basic materials may remain slack. The major market indexes closed mixed but off of their lows for the day.
The drop in oil to a five-week low pushed energy and commodities stocks lower and sent investors into safe-haven parts of the market, like consumer goods producers. Occidental Petroleum slid 2.5 percent while Procter & Gamble Co., which makes Tide and Crest, rose 2 percent.
Back-and-forth trading Monday followed conflicting signs about the economy. Oil skidded on fears of weak demand, while a trade group's report found that activity in the services industry rose in June to its best level in nine months.
Investors have become more cautious in recent weeks following a strong rally that began in March. Some traders fear they might have been too optimistic about how soon the economy might recover from a recession that began in December 2007.
"The markets are becoming more realistic," said Subodh Kumar, global investment strategist at Subodh Kumar & Associates in Toronto. "We can't snap our fingers and have recovery."
The Dow Jones industrial average rose 44.13, or 0.5 percent, to 8,324.87, and the broader Standard & Poor's 500 index rose 2.30, or 0.3 percent, to 898.72. The technology-heavy Nasdaq composite index fell 9.12, or 0.5 percent, to 1,787.40.
Oil fell $2.68 to settle at $64.05 per barrel on the New York Mercantile Exchange. Last week, oil hit an eight-month high above $73.
In economic news, the Institute for Supply Management's services index rose to 47 in June from 44 in May, beating the expectation of 45.5 from economists polled by Thomson Reuters.
The relatively good showing, however, wasn't enough to assuage growing doubts about the economy that worsened last week on disappointing reports on consumer confidence and deep job cuts for June.
The stock market has relatively few guideposts to give it direction this week ahead of second-quarter earnings reports, which get under way Wednesday with Dow component Alcoa Inc. but don't pick up speed until next week.
Sound results at a Treasury Department auction of $8 billion in 10-year Treasury Inflation-Protected Securities, or TIPS, helped reassure investors that the government will be able to finance its spending plans to help revive the economy.
Bond prices were mixed. The yield on the benchmark 10-year Treasury note was up slightly at 3.51 percent, compared with late Thursday's 3.50 percent, and the yield on the three-month T-bill rose to 0.16 percent from 0.15 percent. U.S. markets were closed Friday for the July Fourth holiday.
An analyst upgraded his rating on American Express Co., saying that the credit card company would be among the least affected by regulatory changes and that worries about bad debt are easing. The stock rose $1.25, or 5.6 percent, to $23.52.
The drop commodities hit companies like Exxon Mobil Corp., which fell 39 cents, or 0.6 percent, to $68.10, and Occidental, down $1.58, or 2.5 percent, at $61.70.
Alcoa fell 60 cents, or 6.1 percent, to $9.26, while Freeport-McMoRan Copper & Gold Inc. fell $3.78, or 7.6 percent, to $45.94.
Among consumer staples companies, P&G rose $1.06, or 2.1 percent, to $52.17.
The mixed trading comes after the market reached a plateau in mid-June, mainly holding on to the gains it notched this spring. Investors are looking for confirmation of an economic recovery to take stocks higher. The upcoming earnings season and any forecasts companies make about the rest of the year are sure to answer questions about where the market goes next.
"There is a sense that the fundamentals in the marketplace haven't caught up with the technical rally that we got in March," said Dan Deming, a trader with Strutland Equities in Chicago.
Three stocks fell for every two that rose on the New York Stock Exchange, where consolidated volume came to a light 4.63 billion shares, compared with 3.56 billion traded Thursday.
The Russell 2000 index of smaller companies fell 3.18, or 0.6 percent, to 494.03.
The dollar was mixed against other major currencies, while gold prices also rose.
Overseas, Britain's FTSE 100 fell 1 percent, Germany's DAX index fell 1.2 percent, and France's CAC-40 slid 1.1 percent. Japan's Nikkei stock average fell 1.4 percent.
Monday, July 6, 2009
Obama Heads for Putin ‘Reality Check’ After Medvedev Accord
Presidents Barack Obama and Dmitry Medvedev found common ground yesterday on issues ranging from arms reduction to Afghanistan. Today, Obama will try for a repeat performance with a different audience: Prime Minister Vladimir Putin.
While Obama and Medvedev “had a symbolically successful day,” the U.S. president’s meeting with Putin, 56, is “key” and may serve as a “reality check” on Obama’s effort to recast the two countries’ relations, said Andrew Kuchins, a scholar at the Center for Strategic and International Studies in Washington.
“Obama’s ability to charm is his greatest strength and Putin is not a guy that can be charmed,” said Kuchins.
Obama, 47, and Medvedev, 43, announced after almost four hours of meetings in Moscow yesterday that they agreed to slash their nuclear arsenals and cooperate on military action in Afghanistan as the U.S. and Russia seek to “reset” ties.
The two leaders called for a reduction of nuclear warheads by as much as a third from current limits in a Kremlin meeting. Russia also agreed to allow the transit of U.S. arms shipments to troops fighting the Taliban in Afghanistan.
Obama told reporters he and Medvedev “resolved to reset U.S.-Russian relations” during their first meeting in April. “After less than six months of collaboration, we have done exactly that,” he said at a Moscow news conference.
Relations had reached a post-Cold War low under President George W. Bush because of disagreements over the eastward expansion of the North Atlantic Treaty Organization, a proposed U.S. missile shield in Europe and Russia’s war with Georgia.
New Commission
The agreement on nuclear targets sets the course for negotiators to replace the 1991 Strategic Arms Reduction Treaty, which expires in December. The two sides also agreed to form a commission headed by U.S. Secretary of State Hillary Clinton and Foreign Minister Sergei Lavrov of Russia to keep open the lines of communication.
The U.S. intends to host a global nuclear security summit next year, Obama said, adding that a subsequent meeting may take place in Russia. The two countries, which hold 95 percent of the world’s atomic weapons, must lead by example if they expect other countries to collaborate on nuclear non-proliferation, the U.S. president said.
‘Best’ Outcome
“This kind of outcome was the best we could expect,” Pavel Podvig, a researcher at the Center for International Security and Cooperation at Stanford University, said by phone. “The key thing is they put some numbers on paper.”
The two presidents agreed to a reduction of their nuclear arsenals to between 1,500 and 1,675 warheads and between 500 and 1,100 delivery vehicles. Current limits allow a maximum of 2,200 warheads and 1,600 launch vehicles.
George Shultz, secretary of state under President Ronald Reagan, hailed the agreement in a statement as “good news” and “an essential step” toward a “world free of nuclear weapons.”
The U.S. will return to the issue of the missile shield, which Russia says would hurt its defense posture, when it completes its review of Bush-era plans, Obama said. Differences with Russia on missile defense can be reconciled, he also said.
The issues of missile defense and Iran consumed the majority of Obama’s and Medvedev’s one-on-one meeting, with Obama insisting that negotiations about nuclear disarmament remain separate from the conversations about the shield, said Michael McFaul, a National Security Council official.
No Linkage
“Let’s be very clear, we are not discussing limitations on missile defense” in the talks over a new nuclear treaty, McFaul told reporters in Moscow.
Russia’s agreement to allow the transit of military personnel and materiel to U.S. troops in Afghanistan helps Obama redouble the American war effort as Pakistan becomes increasingly unreliable as a supply route. Medvedev began allowing shipments of non-lethal cargoes bound for Afghanistan to pass via Russian territory in March. The agreement will save the U.S. $133 million in transit fees it would have paid to Russia.
The two leaders praised each other, with Medvedev calling the talks “open and sincere” and Obama characterizing his Russian counterpart as “professional and straightforward.”
Obama said he and Medvedev discussed issues where the U.S. and Russian positions diverge, including the situation in Georgia. No one has an interest in renewing the conflict that saw Russia recognize the Georgian breakaway regions of South Ossetia and Abkhazia after a five-day war, he said.
‘Rivalry of the Past’
“President Medvedev and I are committed to leaving behind the suspicion and rivalry of the past so we can advance the interests we hold in common,” Obama said.
The Clinton-Lavrov commission will see to it that relations don’t deteriorate again, the U.S. president said. The new forum is reminiscent of the so-called Gore-Chernomyrdin commission, which managed relations between the governments of Bill Clinton and Boris Yeltsin.
Obama also pressed his Russian counterpart to make his country a welcoming place for investors, speaking “deliberately about the stability of property rights,” said McFaul.
Sunday, July 5, 2009
Obama in Moscow: can a tense relationship be "reset"?
When President Barack Obama flies into Moscow on Monday for meetings with Kremlin leadership, at the top of his agenda will be reducing the number of strategic nuclear weapons capable of destroying life on Earth. And that might be the easy part.
Obama's trip to Russia is viewed on both sides of the Atlantic as a chance to resuscitate relations between the two nations after they fell to post-Cold War lows during the presidency of George W. Bush .
In order to do so, Obama and Russian President Dmitry Medvedev appear to be taking a more pragmatic tack than did their predecessors: concentrating first on the issues that in the parlance of the diplomatic community are "deliverables," things that can get done, instead of getting stuck on thornier issues.
There is measured hope that a combination of the financial crisis — which humbled Russian rhetoric after both a credit crunch and lower commodity prices hit hard here — and signals from Medvedev, however conflicted, that he's willing to pursue political reform, have created an opening for Obama to "reset" diplomatic ties.
Progress is anticipated on arms control _expected to be a centerpiece of the agenda — as well as on trade, counter-narcotics and support for transporting Western military supplies to the Afghan theatre.
It's a delicate task in an uncertain setting. To begin with, there is a question of whether Obama is dealing with the real leader of the country. The prime minister and former president, Vladimir Putin , is widely regarded as the ruler of Russia and the driving force behind a revival of nationalism and authoritarian rule here that's been funded by oil and gas money.
During the past year, Putin was the most visible and bellicose representative of the Russian invasion of U.S. ally Georgia , and then the dispute that led to a cut-off of Russian gas to U.S. ally Ukraine and much of Europe .
However, because of diplomatic protocol, Obama will spend more time with Medvedev, a friendlier face, than with the prime minister.
American officials have said that they are aware of the complexities of Russia's "ruling tandem." Critics of the Kremlin warn that Putin's deep distrust of the West could short-circuit attempts for substantial change.
In an interview with the Associated Press on Thursday, Obama acknowledged the dilemma. "I think that it's important that even as we move forward with President Medvedev, that Putin understands that the old Cold War approaches to U.S.-Russian relations is outdated, that it's time to move forward in a different direction," Obama said.
"The problem is that Putin has based his campaign on anti-American rhetoric," said Boris Nemtsov , a deputy prime minister in the late 1990s and one of the few national political opposition leaders still in Russia . "Obama believes that democracy is a universal value, Putin believes that it is a universal threat."
Obama and Medvedev have pledged to extend or replace the Strategic Arms Reduction Treaty (START) — a 1991 agreement to reduce the number of long-range nuclear warheads in both countries, which is set to expire in December.
After their April meeting in London , the two leaders set an apparent benchmark by saying they'd go below the levels set by a 2002 pact, known as the Moscow Treaty, which calls for no more than between 1,700 to 2,200 strategic warheads in each country by the end of 2012.
As with much of U.S.- Russia relations, the matter still faces a stumbling block.
The Kremlin is angry about a planned U.S. missile shield in Eastern Europe that was pushed by the Bush administration.
Russian leaders say they fear that the system, which would be based in Poland and the Czech Republic , is not aimed at stopping an Iranian attack, as Washington insists, but rather at
weakening Russia's nuclear deterrent - the cornerstone of its military power.
Medvedev greeted Obama's victory at the polls last November by threatening to deploy missiles in Kaliningrad , near Poland , "to neutralize, if necessary, the anti-ballistic missile system in Europe ." The timing was inept, and has led some to wonder whether the speech was prepared for a win of the presidency by Arizona Sen. John McCain , the Republican candidate.
Obama has said that the shield is under review, amid questions about its funding and whether it would actually work.
One way around the standoff would be to link Russia to a broader anti-missile system, an offer that Washington raised but that Moscow so far has shunned.
The disagreement about the shield taps into the broader problem that Russian officials and analysts say is at the core of troubles with the United States . This is the question of Russia's contested influence over the so-called "near abroad" countries. Russia's war with Georgia last August, for example, resulted in the de facto annexing of two regions in that country.
While the Obama administration has signaled that it's not going to press NATO as aggressively as Bush did to admit Georgia and Ukraine , it's clear that those fault lines remain in place.
During a teleconference last week, a U.S. official dealing with Russian affairs said that Obama is looking for ways to work with the Kremlin, but would not be willing to swap U.S. interests for Russian cooperation.
"We are not in any way, in the name of the reset, abandoning our very close relationships with these two democracies, Ukraine and Georgia ," said Michael McFaul , senior director for Russian and Eurasian Affairs at the National Security Council .
For the Kremlin, there is little compromise on being able to project power in what is referred to here as a "privileged sphere."
From the Russian viewpoint it's an existential matter, said Vyacheslav Nikonov , head of Politika, a pro-Kremlin think tank.
Sergei Markov, a member of Russia's lower house of parliament who's seen as having close links to the Kremlin, agreed. "If you say, as Washington maintains, the Russian sphere of influence is limited by its border, it means that Washington is saying that Russia is not a great power," Markov said.
Beyond the question of Russian power, and U.S. efforts to work with or check it, there are some in Moscow who worry that something else is being overlooked -- freedom.
By focusing on arms control and other security-related matters, the thinking goes, the Obama administration could signal to hardliners in Moscow that America is embracing an approach in which U.S. national interests trump any message about spreading democracy and the rule of law.
Russia is a country where human rights workers are harassed, ethnic minorities are publicly assaulted by gangs and those who pose a threat to the ruling powers have in the past been killed.
"My fear is this agenda, only a hard security agenda, and Obama's dialogue only with the Kremlin, will be used by the traditional party of the Russian political establishment and by the Kremlin as ... an instrument to legitimize the current system," said Lilia Shevtsova , a senior associate at the Carnegie Moscow Center.
Obama officials say the president will spend much of his second day in Moscow speaking with civil society leaders, and giving what's billed as a major speech that's expected to at least touch on the question of open governance, a clear indication that democracy is still on the agenda.
Obama's trip to Russia is viewed on both sides of the Atlantic as a chance to resuscitate relations between the two nations after they fell to post-Cold War lows during the presidency of George W. Bush .
In order to do so, Obama and Russian President Dmitry Medvedev appear to be taking a more pragmatic tack than did their predecessors: concentrating first on the issues that in the parlance of the diplomatic community are "deliverables," things that can get done, instead of getting stuck on thornier issues.
There is measured hope that a combination of the financial crisis — which humbled Russian rhetoric after both a credit crunch and lower commodity prices hit hard here — and signals from Medvedev, however conflicted, that he's willing to pursue political reform, have created an opening for Obama to "reset" diplomatic ties.
Progress is anticipated on arms control _expected to be a centerpiece of the agenda — as well as on trade, counter-narcotics and support for transporting Western military supplies to the Afghan theatre.
It's a delicate task in an uncertain setting. To begin with, there is a question of whether Obama is dealing with the real leader of the country. The prime minister and former president, Vladimir Putin , is widely regarded as the ruler of Russia and the driving force behind a revival of nationalism and authoritarian rule here that's been funded by oil and gas money.
During the past year, Putin was the most visible and bellicose representative of the Russian invasion of U.S. ally Georgia , and then the dispute that led to a cut-off of Russian gas to U.S. ally Ukraine and much of Europe .
However, because of diplomatic protocol, Obama will spend more time with Medvedev, a friendlier face, than with the prime minister.
American officials have said that they are aware of the complexities of Russia's "ruling tandem." Critics of the Kremlin warn that Putin's deep distrust of the West could short-circuit attempts for substantial change.
In an interview with the Associated Press on Thursday, Obama acknowledged the dilemma. "I think that it's important that even as we move forward with President Medvedev, that Putin understands that the old Cold War approaches to U.S.-Russian relations is outdated, that it's time to move forward in a different direction," Obama said.
"The problem is that Putin has based his campaign on anti-American rhetoric," said Boris Nemtsov , a deputy prime minister in the late 1990s and one of the few national political opposition leaders still in Russia . "Obama believes that democracy is a universal value, Putin believes that it is a universal threat."
Obama and Medvedev have pledged to extend or replace the Strategic Arms Reduction Treaty (START) — a 1991 agreement to reduce the number of long-range nuclear warheads in both countries, which is set to expire in December.
After their April meeting in London , the two leaders set an apparent benchmark by saying they'd go below the levels set by a 2002 pact, known as the Moscow Treaty, which calls for no more than between 1,700 to 2,200 strategic warheads in each country by the end of 2012.
As with much of U.S.- Russia relations, the matter still faces a stumbling block.
The Kremlin is angry about a planned U.S. missile shield in Eastern Europe that was pushed by the Bush administration.
Russian leaders say they fear that the system, which would be based in Poland and the Czech Republic , is not aimed at stopping an Iranian attack, as Washington insists, but rather at
weakening Russia's nuclear deterrent - the cornerstone of its military power.
Medvedev greeted Obama's victory at the polls last November by threatening to deploy missiles in Kaliningrad , near Poland , "to neutralize, if necessary, the anti-ballistic missile system in Europe ." The timing was inept, and has led some to wonder whether the speech was prepared for a win of the presidency by Arizona Sen. John McCain , the Republican candidate.
Obama has said that the shield is under review, amid questions about its funding and whether it would actually work.
One way around the standoff would be to link Russia to a broader anti-missile system, an offer that Washington raised but that Moscow so far has shunned.
The disagreement about the shield taps into the broader problem that Russian officials and analysts say is at the core of troubles with the United States . This is the question of Russia's contested influence over the so-called "near abroad" countries. Russia's war with Georgia last August, for example, resulted in the de facto annexing of two regions in that country.
While the Obama administration has signaled that it's not going to press NATO as aggressively as Bush did to admit Georgia and Ukraine , it's clear that those fault lines remain in place.
During a teleconference last week, a U.S. official dealing with Russian affairs said that Obama is looking for ways to work with the Kremlin, but would not be willing to swap U.S. interests for Russian cooperation.
"We are not in any way, in the name of the reset, abandoning our very close relationships with these two democracies, Ukraine and Georgia ," said Michael McFaul , senior director for Russian and Eurasian Affairs at the National Security Council .
For the Kremlin, there is little compromise on being able to project power in what is referred to here as a "privileged sphere."
From the Russian viewpoint it's an existential matter, said Vyacheslav Nikonov , head of Politika, a pro-Kremlin think tank.
Sergei Markov, a member of Russia's lower house of parliament who's seen as having close links to the Kremlin, agreed. "If you say, as Washington maintains, the Russian sphere of influence is limited by its border, it means that Washington is saying that Russia is not a great power," Markov said.
Beyond the question of Russian power, and U.S. efforts to work with or check it, there are some in Moscow who worry that something else is being overlooked -- freedom.
By focusing on arms control and other security-related matters, the thinking goes, the Obama administration could signal to hardliners in Moscow that America is embracing an approach in which U.S. national interests trump any message about spreading democracy and the rule of law.
Russia is a country where human rights workers are harassed, ethnic minorities are publicly assaulted by gangs and those who pose a threat to the ruling powers have in the past been killed.
"My fear is this agenda, only a hard security agenda, and Obama's dialogue only with the Kremlin, will be used by the traditional party of the Russian political establishment and by the Kremlin as ... an instrument to legitimize the current system," said Lilia Shevtsova , a senior associate at the Carnegie Moscow Center.
Obama officials say the president will spend much of his second day in Moscow speaking with civil society leaders, and giving what's billed as a major speech that's expected to at least touch on the question of open governance, a clear indication that democracy is still on the agenda.
Where not to buy real estate
Think twice before buying a house in these cities any time soon.
Home buyers looking for a bottom in the real estate market may have been encouraged by housing data released earlier this week. Sales of existing homes rose 2.4% in May, according to the National Association of Realtors. The increase was a little less than most analysts had expected, but it represented the second straight month of improvement. Meanwhile, sales of new homes dipped 0.6% in May, continuing a trend of fairly flat months so far this year, according to data released by the Commerce Department.
Don’t get too excited – it’s still too early to say the housing market bottomed out, analysts and economists say. Distressed properties still account for about a third of all sales, and 29% of sales were to first-time home buyers, who are currently benefiting from an $8,000 tax credit.
More from
» 10 Things Your Home Insurer Won’t Tell You
» The Tax Implications of Foreclosures
» Moving on the Cheap: 6 Tips for Cutting Costs and Hassles The sales trends are telling.
“You’re not really seeing a lot of move-up buying,” says Richard F. Moody, chief economist and director of research at Forward Capital, LLC. “There are so many vacant homes and so many foreclosures that [there’s] not the normal trade-up pattern that you would have traditionally seen,” Moody says.
Housing prices fell nationwide during the first quarter, according to Standard & Poor’s Case-Shiller Index. The decline appears to be slowing: in February and March, the annual rate of decline did not set a new record, but home owners should take little solace in those numbers. “Based on the March data… we see no evidence that that a recovery in home prices has begun,” David M. Blitzer, chairman of the Index Committee at Standard & Poor’s, said in a statement.
All of this less-than-terrible news has left analysts cautiously optimistic that much of the country will start to see housing prices rise sometime in the next year or two. Looking at the nation as a whole, today through the spring of 2011 may be the window for those looking to buy a house at the bottom of the market, says Gary Hager, president and founder of Integrated Wealth Management, a New Jersey-based financial planning company.
A few markets where the housing crisis started earliest have already shown signs of bottoming out. Early-suffering cities like Denver and Boston are now seeing slower declines in home prices, which could indicate they’re already poised for a comeback.
And in some areas, buyers have seized on rapidly falling prices. Existing-home sales rose 9% in the Midwest in May, according to the National Association of Realtors.
“There will be regional differences in the turnaround,” says Maureen Maitland, vice president of index services at Standard & Poor’s. “Most economists I talk to are expecting the beginning of the turnaround to be sometime next year,” she says. However, she added, “the last market may not turn around for two or three years.”
For those hoping to buy at the best possible price, we’ve got a list of five cities where home prices may still have farther to fall. But keep in mind, getting a house at a discount is still not necessarily a house you can afford.
“In light of the housing market boom and bust, consumers should feel very comfortable financially” before deciding to buy, says Lawrence Yun, chief economist for the National Association of Realtors. “They should not try to overstretch their budget to get their dream home.”
1) DetroitHousing prices fell 4.9% in Detroit in March, according to the latest reading of the Case-Shiller Index. That marked the city’s largest monthly decline since January 1991, when S&P’s backlogged data begin. Houses in Detroit are currently selling at 1995 prices – and with prices still falling so fast, it’s hard to say when the city will rejoin the 21st century.
“Detroit is Detroit because of the auto industry,” says Maitland. The whole Midwest is hurting from car companies’ woes, but Detroit is hurting the most.
2) New York CityAnyone who was hoping to see Wall Street suffer from the financial crisis can relax. New York may have avoided the nationwide implosion in home prices early on, but the city saw its largest-ever monthly decline in March, at 2.5%.
“New York may not be out of the woods,” Maitland says. “Because of what’s going on with the financial markets and the layoffs on Wall Street, New York may be one of the last places to turn around.”
3) PhoenixHome prices in Phoenix have fallen 53% from their peak in June 2006, and the 2009 data suggest they’ve got farther to go. In March, prices in Phoenix fell 4.5%.
The Southwest has been one of the hardest-hit regions in the mortgage crisis. The region still faces a glut of recently-built homes.
“In Phoenix, you had some of the worst excesses,” in terms of overbuilding, Moody says. “The surplus of houses is so great that it could take two or three years” for prices to turn around. However, a steady influx of new residents into the region suggests the long-term prospects for the market are sound, he says.
4) Portland, Ore.In the Northwest, median home prices are down but they remain above the national average. Portland’s prices fell 2.1% in March. Home prices in Seattle were down 2.0% for the month.
“Portland’s still going down,” says Dave McCarthy, president and chief executive of Integrated Asset Services, a real estate valuation and asset disposition and management company that collects data on the housing market.
The city “has remained pretty strong but they’re starting to feel some of the effects,” he adds.
The local labor market may be playing a role, Moody says. Portland’s unemployment rate was 11.6% in April, according to the Department of Labor. That’s well above the national average for the month (8.9%).
The Pacific Northwest bubble was among the last to burst, which could mean the market will be among the last to recover.
5) MinneapolisHousing prices in Minneapolis fell 6.1% in March, the largest monthly decline of any metro area since data tracking began in 1987.
More than half of all March home sales in Minneapolis were due to foreclosure or short-sale activity, according to the Federal Reserve Board’s Beige Book, which gathers information on regional economic conditions. Foreclosed homes tend to drive prices down because “the bank’s best interest is to get the asset off their books” as quickly as possible, Maitland says.
Home buyers looking for a bottom in the real estate market may have been encouraged by housing data released earlier this week. Sales of existing homes rose 2.4% in May, according to the National Association of Realtors. The increase was a little less than most analysts had expected, but it represented the second straight month of improvement. Meanwhile, sales of new homes dipped 0.6% in May, continuing a trend of fairly flat months so far this year, according to data released by the Commerce Department.
Don’t get too excited – it’s still too early to say the housing market bottomed out, analysts and economists say. Distressed properties still account for about a third of all sales, and 29% of sales were to first-time home buyers, who are currently benefiting from an $8,000 tax credit.
More from
» 10 Things Your Home Insurer Won’t Tell You
» The Tax Implications of Foreclosures
» Moving on the Cheap: 6 Tips for Cutting Costs and Hassles The sales trends are telling.
“You’re not really seeing a lot of move-up buying,” says Richard F. Moody, chief economist and director of research at Forward Capital, LLC. “There are so many vacant homes and so many foreclosures that [there’s] not the normal trade-up pattern that you would have traditionally seen,” Moody says.
Housing prices fell nationwide during the first quarter, according to Standard & Poor’s Case-Shiller Index. The decline appears to be slowing: in February and March, the annual rate of decline did not set a new record, but home owners should take little solace in those numbers. “Based on the March data… we see no evidence that that a recovery in home prices has begun,” David M. Blitzer, chairman of the Index Committee at Standard & Poor’s, said in a statement.
All of this less-than-terrible news has left analysts cautiously optimistic that much of the country will start to see housing prices rise sometime in the next year or two. Looking at the nation as a whole, today through the spring of 2011 may be the window for those looking to buy a house at the bottom of the market, says Gary Hager, president and founder of Integrated Wealth Management, a New Jersey-based financial planning company.
A few markets where the housing crisis started earliest have already shown signs of bottoming out. Early-suffering cities like Denver and Boston are now seeing slower declines in home prices, which could indicate they’re already poised for a comeback.
And in some areas, buyers have seized on rapidly falling prices. Existing-home sales rose 9% in the Midwest in May, according to the National Association of Realtors.
“There will be regional differences in the turnaround,” says Maureen Maitland, vice president of index services at Standard & Poor’s. “Most economists I talk to are expecting the beginning of the turnaround to be sometime next year,” she says. However, she added, “the last market may not turn around for two or three years.”
For those hoping to buy at the best possible price, we’ve got a list of five cities where home prices may still have farther to fall. But keep in mind, getting a house at a discount is still not necessarily a house you can afford.
“In light of the housing market boom and bust, consumers should feel very comfortable financially” before deciding to buy, says Lawrence Yun, chief economist for the National Association of Realtors. “They should not try to overstretch their budget to get their dream home.”
1) DetroitHousing prices fell 4.9% in Detroit in March, according to the latest reading of the Case-Shiller Index. That marked the city’s largest monthly decline since January 1991, when S&P’s backlogged data begin. Houses in Detroit are currently selling at 1995 prices – and with prices still falling so fast, it’s hard to say when the city will rejoin the 21st century.
“Detroit is Detroit because of the auto industry,” says Maitland. The whole Midwest is hurting from car companies’ woes, but Detroit is hurting the most.
2) New York CityAnyone who was hoping to see Wall Street suffer from the financial crisis can relax. New York may have avoided the nationwide implosion in home prices early on, but the city saw its largest-ever monthly decline in March, at 2.5%.
“New York may not be out of the woods,” Maitland says. “Because of what’s going on with the financial markets and the layoffs on Wall Street, New York may be one of the last places to turn around.”
3) PhoenixHome prices in Phoenix have fallen 53% from their peak in June 2006, and the 2009 data suggest they’ve got farther to go. In March, prices in Phoenix fell 4.5%.
The Southwest has been one of the hardest-hit regions in the mortgage crisis. The region still faces a glut of recently-built homes.
“In Phoenix, you had some of the worst excesses,” in terms of overbuilding, Moody says. “The surplus of houses is so great that it could take two or three years” for prices to turn around. However, a steady influx of new residents into the region suggests the long-term prospects for the market are sound, he says.
4) Portland, Ore.In the Northwest, median home prices are down but they remain above the national average. Portland’s prices fell 2.1% in March. Home prices in Seattle were down 2.0% for the month.
“Portland’s still going down,” says Dave McCarthy, president and chief executive of Integrated Asset Services, a real estate valuation and asset disposition and management company that collects data on the housing market.
The city “has remained pretty strong but they’re starting to feel some of the effects,” he adds.
The local labor market may be playing a role, Moody says. Portland’s unemployment rate was 11.6% in April, according to the Department of Labor. That’s well above the national average for the month (8.9%).
The Pacific Northwest bubble was among the last to burst, which could mean the market will be among the last to recover.
5) MinneapolisHousing prices in Minneapolis fell 6.1% in March, the largest monthly decline of any metro area since data tracking began in 1987.
More than half of all March home sales in Minneapolis were due to foreclosure or short-sale activity, according to the Federal Reserve Board’s Beige Book, which gathers information on regional economic conditions. Foreclosed homes tend to drive prices down because “the bank’s best interest is to get the asset off their books” as quickly as possible, Maitland says.
Friday, July 3, 2009
Drug found in Jackson home
Powerful sedative found in Michael Jackson's home
The powerful sedative Diprivan was found in Michael Jackson's home, a law enforcement official said Friday as the city planned for a massive crowd at the singer's memorial service.
Diprivan is an anesthetic widely used in operating rooms to induce unconsciousness. Also known as Propofol, it's given intravenously and is very unusual to have in a private home.
The law enforcement official spoke on condition of anonymity because the person was not authorized to speak about the matter.
A Los Angeles Police spokesman, Lt. John Romero, declined to discuss the case. "It's an ongoing investigation," he said.
The cause of Jackson's death has not been determined. Autopsy results are not expected for several weeks.
At the downtown Staples Center, where Jackson's memorial will be held Tuesday morning, Assistant Police Chief Earl Paysinger said anywhere from 250,000 to 700,000 people could try to reach the arena, even though only 17,500 tickets will be available.
City Councilwoman Jan Perry urged people to stay home and watch the memorial on TV. There will not be a funeral procession through the city.
Tickets to Jackson's memorial service will be free. They can be obtained by registering at Staplescenter.com. There will be 11,000 tickets for seats inside Staples Center and 6,500 for seats in the adjacent Nokia Theatre, where fans can watch a simulcast. On Saturday night, 8,750 names will be randomly selected to receive two tickets each.
No details about the memorial service itself were released.
Jackson was known to have suffered from severe insomnia. In the weeks before his death, Cherilyn Lee, a registered nurse who was working with the singer, said Jackson pleaded for Diprivan amid the stress of preparing for a massive series of comeback concerts.
Lee said she repeatedly rejected his demands because the drug was unsafe.
Told Friday that Diprivan had been found at Jackson's house, she said, "I did everything I could to warn him against it."
Jackson had trouble sleeping as far back as 1989, said one of his former publicists, Rob Goldstone, who spent a month on the road with Jackson during the "Bad" tour.
"He had very bad nightmares, he found it very difficult to sleep," Goldstone said.Diprivan, which has a milky appearance, is sometimes nicknamed "milk of amnesia." Last fall, doctors from the Mayo Clinic warned at a conference that in rare cases,
Diprivan can trigger an irreversible chain of events leading to heart dysfunction and death.
They said three patients receiving Diprivan to treat severe seizures had suffered cardiac arrest, and two died. The doctors said the clinic stopped using Diprivan to treat such patients because of the danger.
The drug's manufacturer, AstraZeneca PLC, warns that patients using Diprivan should be continuously monitored, and in a tiny number of cases patients using it have suffered cardiac arrest, although it was not clear the drug was to blame.
Authorities are investigating allegations that the 50-year-old Jackson had been consuming painkillers, sedatives and antidepressants. Any criminal charges would depend on whether Jackson had been overly prescribed medications, given drugs inappropriate for his needs, or if doctors knowingly prescribed Jackson medications under an assumed name.
Edward Chernoff, an attorney for Jackson's doctor, Dr. Conrad Murray, said Friday through a spokeswoman that he had agreed with investigators not to comment until information is released through official channels. Murray was in Jackson's rented mansion when the singer went into cardiac arrest in his bedroom on June 25.
Murray has spoken to police and authorities say he is not a suspect. In an earlier interview, Chernoff said Murray never gave or prescribed Jackson the painkillers Demerol or OxyContin, and denied reports suggesting that the doctor gave the pop star drugs that contributed to his death.
Chernoff would not discuss what drugs the doctor administered to Jackson, but said they would have been prescribed in response to a specific complaint.
Thursday, July 2, 2009
Oil hovers above $66 after dismal jobs data
Oil hovers above $66 in Asia after weak jobs numbers undermine investor confidence
SINGAPORE (AP) -- Oil prices hovered above $66 a barrel Friday in Asia in light holiday trading volume a day after grim unemployment numbers from the U.S. and Europe sent crude prices tumbling.
Benchmark crude for August delivery slipped 26 cents to $66.47 a barrel by midday Singapore time in electronic trading on the New York Mercantile Exchange. On Thursday, it fell $2.58, nearly 4 percent, to settle at $66.73.
Trading in the U.S. is closed Friday for the Independence Day holiday.
Oil came off an eight-month intraday high of $73.38 a barrel earlier this week on growing investor concerns that a doubling of the crude price since March isn't justified by a sluggish global economy.
Weak jobs figures released Thursday suggested consumption will remain tepid and crude demand may not pick up quickly.
A Labor Department report showed the U.S. economy lost a larger-than-expected 467,000 jobs in June. The unemployment rate climbed to 9.5 percent, a 26-year high.
Unemployment in the 16 countries that use the euro spiked to a ten-year high in May, also at 9.5 percent.
The dismal economic data undermined investor confidence and sent the Dow Jones industrial average down 2.6 percent Thursday. Most Asian stock indexes also opened lower Friday.
In other Nymex trading, gasoline for August delivery fell 1.3 cents to $1.78 a gallon and heating oil held at $1.70. Natural gas for August delivery rose 4.8 cents to $3.66 per 1,000 cubic feet.
In London, Brent prices slid 38 cents to $66.27 a barrel on the ICE Futures exchange.
SINGAPORE (AP) -- Oil prices hovered above $66 a barrel Friday in Asia in light holiday trading volume a day after grim unemployment numbers from the U.S. and Europe sent crude prices tumbling.
Benchmark crude for August delivery slipped 26 cents to $66.47 a barrel by midday Singapore time in electronic trading on the New York Mercantile Exchange. On Thursday, it fell $2.58, nearly 4 percent, to settle at $66.73.
Trading in the U.S. is closed Friday for the Independence Day holiday.
Oil came off an eight-month intraday high of $73.38 a barrel earlier this week on growing investor concerns that a doubling of the crude price since March isn't justified by a sluggish global economy.
Weak jobs figures released Thursday suggested consumption will remain tepid and crude demand may not pick up quickly.
A Labor Department report showed the U.S. economy lost a larger-than-expected 467,000 jobs in June. The unemployment rate climbed to 9.5 percent, a 26-year high.
Unemployment in the 16 countries that use the euro spiked to a ten-year high in May, also at 9.5 percent.
The dismal economic data undermined investor confidence and sent the Dow Jones industrial average down 2.6 percent Thursday. Most Asian stock indexes also opened lower Friday.
In other Nymex trading, gasoline for August delivery fell 1.3 cents to $1.78 a gallon and heating oil held at $1.70. Natural gas for August delivery rose 4.8 cents to $3.66 per 1,000 cubic feet.
In London, Brent prices slid 38 cents to $66.27 a barrel on the ICE Futures exchange.
Jackson's final rehearsal
A video released Thursday showed Michael Jackson vigorously practicing a song-and-dance routine days before his death, supporting accounts he had been in good health.
In footage obtained by AFP, the pop legend performed at the Staples Center in Los Angeles on June 23, two days before he died, as he prepared for a 50-date set in London starting in July.
Jackson, while thin, is seen dancing with energy in a tightly choreographed sequence with a group of performers. Jackson sings on a headset and at one point pushes back his jacket to reveal his red shirt underneath.
In the footage, Jackson switches sharply in styles in a medley of some of his hits. The video starts with Jackson dancing wildly in front of a rock 'n' roll guitarist before a pause for dramatic effect.
Jackson then shifts to a snippet of "Billie Jean," one of his greatest hits, before singing, "They Don't Care About Us," one of his most controversial tracks in which he brought in a hip-hop influence.
The set ends with a sample of a car horn. The stage then fades to black as an outside voice instructs, "Hold for applause."
Associates of Jackson have described the 50-year-old pop star as being in good form, including at another rehearsal just hours before his death.
Jackson collapsed and died on June 25 at his rented Los Angeles mansion. Speculation has focused on whether Jackson was taking painkillers or other medication.
Jackson's voice coach Dorian Holley said Jackson was in an upbeat mood in the days before his death, joking around with his wardrobe and makeup staff.
"My friends call and ask, 'Was Michael sick? Was he weak? Was he ill?' It's the absolute opposite of that," Holley told CNN.
"He was very energetic, he was happy. He was even more playful than he normally was at rehearsal," he said.
Holley said Jackson, 50, did not show his age.
"I'm sure that he was in pain after some rehearsals. But I got to tell you something -- the guys and girls dancing with him were all in their 20s," he said.
"When Michael was on stage with them, there was only one person that you could watch and that was Michael Jackson," he said.
A similar account came from Kevin Mazur, who was attending the rehearsal sessions as a photographer.
"He was like an expectant father pacing up and down the stage," Mazur told Britain's Sun tabloid.
"He was just so focused. Between songs, he burst into laughter and joked around with his dancers and the director. I have never seen him so happy," Mazur said.
Jackson had planned a series of concerts at London's O2 Arena starting on July 13, part of a comeback for the King of Pop whose personal and financial life had sharply deteriorated in the past decade.
Concert promoters AEG Live, who released the video, are offering full ticket refunds for the concerts.
British media reports said about 50 million pounds (59 million euros, 83 million dollars) has been spent on 750,000 tickets.
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