US mortgage rates jump to 2-year high of 4.46 percent
WASHINGTON (AP) — U.S. mortgage rates have suddenly jumped from near-record lows and are adding thousands of dollars to the cost of buying a home.
The average rate on the 30-year fixed loan soared this week to 4.46 percent, according to a report Thursday from mortgage buyer Freddie Mac. That's the highest average in two years and a full point more than a month ago.
The surge in mortgage rates follows the Federal Reserve's signal that it could slow its bond purchases later this year. A pullback by the Fed would likely send long-term interest rates even higher.
Signed contracts to buy US homes at 6-year high
WASHINGTON (AP) — The number of people who signed contracts to buy U.S. homes jumped in May to the highest level in more than six years, a sign home sales will probably rise in the months ahead.
The National Association of Realtors said Thursday that its seasonally adjusted index for pending home sales rose 6.7 percent to 112.3 last month. That's the highest level since December 2006. Signed contracts have risen 12.1 percent in the past 12 months.
The increase could reflect an effort by potential buyers to complete deals before mortgage rates rose further. Mortgage rates rose in May and then jumped after Federal Reserve Chairman Ben Bernanke suggested last week the Fed could slow its bond purchases later this year.
US agency sues Corzine over failure of MF Global
WASHINGTON (AP) — Federal regulators have accused former New Jersey Gov. Jon Corzine of misusing customer money while he was CEO of brokerage firm MF Global, which collapsed in 2011.
A civil lawsuit filed Thursday in New York by the Commodity Futures Trading Commission seeks to ban Corzine from trading in the futures market and demands he pay unspecified penalties.
The lawsuit charges that MF Global violated U.S. commodity laws in the weeks before it collapsed by using customer funds to support its own trading operations. About $1.2 billion in customer money disappeared when the firm collapsed.
Goodbye M&M's, hello granola bars as school snacks
WASHINGTON (AP) — Kids, your days of blowing off those healthier school lunches and filling up on cookies from the vending machine are numbered. The government is onto you.
For the first time, the Agriculture Department is telling schools what sorts of snacks they can sell. The new restrictions announced Thursday fill a gap in nutrition rules that allowed many students to load up on fat, sugar and salt despite the existing guidelines for healthy meals.
That doesn't mean schools will be limited to doling out broccoli and brussels sprouts.
Snacks that still make the grade include granola bars, low-fat tortilla chips, fruit cups and 100 percent fruit juice. And high school students can buy diet versions of soda, sports drinks and iced tea.
But say goodbye to some beloved school standbys, such as doughy pretzels, chocolate chip cookies and those little ice cream cups with their own spoons. Some may survive in low-fat or whole wheat versions. The idea is to weed out junk food and replace it with something with nutritional merit.
Target cuts ties with Deen; drugmaker distances
NEW YORK (AP) — Paula Deen's multimillion-dollar merchandise and media empire continues to unravel following revelations that she used racial slurs in the past.
Target Corp., Home Depot Inc. and diabetes drug maker Novo Nordisk on Thursday became the latest companies to distance themselves from the Southern celebrity chef.
Home Depot, which sold Paula Deen-branded cookware and kitchen products only online, said it pulled the merchandise off its website on Wednesday. And Target said that it will phase out its Paula Deen-branded cookware and other items in stores and on its website.
Jeep owners worry about safety after recall deal
DETROIT (AP) — A deal between the government and Chrysler over Jeeps linked to deadly fires isn't sitting well with many Jeep owners and auto safety advocates.
In early June, after a nearly three-year investigation, the National Highway Traffic and Safety Administration recommended that Chrysler recall 2.7 million older Jeep SUVs because the fuel tanks could rupture, leak and cause fires in rear-end crashes.
But last week, after talks between outgoing Transportation Secretary Ray LaHood and Chrysler CEO Sergio Marchionne, the agency compromised, letting Chrysler limit the recall to about 1.5 million vehicles.
PayPal looks to conquer space (payments)
NEW YORK (AP) — PayPal wants to explore space — or at least begin to figure out how payments and commerce will work beyond Earth's realm once space travel and tourism take off.
PayPal, which is eBay Inc.'s payments business, says it is launching an initiative called PayPal Galactic with the help of the nonprofit SETI Institute and the Space Tourism Society, an industry group focused on space travel. Its goal, PayPal says, is to work out how commerce will work in space.
Questions to be answered include how commerce will be regulated and what currency will be used. PayPal's president, David Marcus, said the company is very serious about the idea. He says that while space tourism was once the stuff of science fiction, it's now becoming a reality.
US consumer spending up 0.3 percent in May
WASHINGTON (AP) — U.S. consumers spent more in May as their income rose, encouraging signs after a slow start to the year. But spending was weaker in April, February and January than previously estimated.
The Commerce Department said Thursday that consumer spending rose 0.3 percent last month, nearly erasing a similar decline in April. Income rose 0.5 percent.
At the same time, economists said the downward revisions to spending for three of the first four months of the year signal weaker growth in the April-June quarter, which ends this week.
US unemployment benefit applications fall to 346,000
WASHINGTON (AP) — The number of Americans seeking unemployment benefits fell 9,000 to a seasonally adjusted 346,000 last week, evidence that the job market is still improving modestly, despite signs of slower growth.
The four-week average, a less volatile figure, declined 2,750 to 345,750, the Labor Department said Thursday. That's near the five-year low of 338,000 that the average touched last month.
Applications are a proxy for layoffs. Since March, they have fluctuated between 340,000 and 360,000, a level consistent with steady hiring. Employers added 175,000 jobs in May, almost matching the average monthly gain for the past year. The unemployment rate was 7.6 percent, down from 8.2 percent a year earlier.
Senators: Student loan interest rates to double
WASHINGTON (AP) — Student loan rates will double Monday — at least for a while — after a compromise to keep student loan interest rates low proved unwinnable before the July 1 deadline, senators said Thursday.
Sen. Tom Harkin, the chairman of the Senate education panel, said none of the proposals being circulating among lawmakers could win passage, and he urged lawmakers to extend the current rates for another year when they return from the July 4 recess. Harkin said his colleagues could retroactively restore the current rates after the holiday.
Interest rates on new subsidized Stafford loans are set to go from 3.4 percent to 6.8 percent on Monday unless lawmakers take action. Congress' Joint Economic Committee estimates the increase will cost the average student $2,600.
By The Associated Press=
The Dow Jones industrial average closed up 114.35 points, or 0.8 percent, to 15,024.49. The S&P 500 index climbed 9.94 points, or 0.6 percent, to 1,613.20. The Nasdaq composite rose 25.64 points, or 0.8 percent, to 3,401.86.
Benchmark oil for August delivery rose $1.55, or 1.6 percent, to finish at $97.05 a barrel on the New York Mercantile Exchange. Brent crude, which is used to set prices for oil used by many U.S. refineries to make gasoline, rose $1.16 to finish at $102.82 a barrel.
Heating oil rose 4 cents to end at $2.89 a gallon. Wholesale gasoline rose 1 cent to finish at $2.74 a gallon. Natural gas fell 16 cents, or 4.1 percent, to end at $3.58 per 1,000 cubic feet.