Sales of new homes rebounded in September from summer sales levels that were much weaker than previously reported. Sales increased 4.8% to a seasonally adjusted annual rate of 770,000 from a revised 735,000 in August. The inventory for new homes dropped from 9 months to 8.3 months.
The average rate on fixed-rate 30-year mortgages slipped to 6.31% this week from 6.49% last week. The average 15-year fixed mortgage fell to 6.00% from 6.17%. The average rate on 30-year jumbo loans -- above $417,000 -- also dipped to 7.04%.
Demand for defense goods tumbled in September, pushing down orders for durable goods for a second month in a row. Total orders fell 1.7% after a revised 5.3% decline in August. Economists were expecting orders to rise 1.1%.
First-time claims for state unemployment benefits declined in the latest week, but only partially reversed the big jump in the prior week. The number of initial claims in the week ending October 20 fell 8,000 to 331,000. The consensus forecast of Wall Street economists was for claims to fall 17,000 to 320,000.
Bank of America (BAC) announced that it will restructure its investment banking unit, starting with that unit's president. The bank also said it will eliminate about 3,000 jobs, most of which will be in the Global Corporate and Investment Banking unit, but other units will also be affected by the layoffs.
In Forex News Today
The dollar edged towards a record low versus the euro, after a report showed the unexpected fall in U.S. September durable good orders, bolstering the view a slowing economy will herald a cut in U.S. interest rates next week.
The yen rose against the dollar and euro this week as weaker stocks and an unexpectedly softer September U.S. existing-home sales report caused investors to flee risky assets. Mike Moran, foreign exchange strategist at Standard Chartered Bank in New York said, "We are seeing a degree of risk aversion creep back into the FX markets.?
Jim Rogers, chairman of Beeland Interests Inc., said he is shifting all his assets out of the dollar and buying Chinese yuan because the Federal Reserve has eroded the value of the U.S. currency. He said he?s in the process of moving all of his assets out of U.S. dollars. Rogers, delivering a presentation at an investors' meeting organized by ABN Amro Markets in Amsterdam, said he expects the Chinese currency to quadruple in the next decade and that he is holding on to commodities such as platinum, gold, silver and palladium.
Scheduled Economic Reports (Friday)
Consumer Sentiment (Oct)
In Earnings News
Motorola (MOT) said its profit plunged in the third quarter, as sales fell substantially in its cell phone business. The company posted profit of $60 million, or 3 cents per share while analysts were looking for 4 cents a share.
Royal Dutch Shell PLC (RDS-B) said third-quarter net profit rose 16 percent despite a drop in production, but it warned that the underlying performance of its refining operations was weaker than it appeared.
Sony Corp. (SNE) announced that net profit jumped in the July-to-September quarter as brisk sales for its Cybershot digital cameras, camcorders and other goods spurred a turnaround in its consumer electronics division.
And, XM Satellite Radio Holdings Inc. (XMSR) reported its third-quarter loss widened, despite higher subscriber numbers. XM reported a loss of $145.4 million, or 47 cents per share. Analysts expected a loss of 45 cents per share.
Scheduled Earnings Reports (Friday)
Countrywide Financial, Colgate-Palmolive, Fortune Brands, Brunswick, Waste Management, Volkswagen
Stocks in the News
Microsoft (MSFT) will acquire a significant stake in popular online social networking company Facebook Inc.
Pulte Homes (PHM) reported a third-quarter net loss of $787.9 million, or $3.12 a share, compared with a net profit of $190.2 million, or 74 cents a share, in the year-earlier period.
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