A14
EZ SU
KLMNO WASHINGTON BUSINESS Home prices rise, but gains may soon end
BY ARIANA EUNJUNG CHA Prices for single-family homes
in major U.S. cities rose a modest 4.2 percent in June from a year earlier, but economists cautioned that the bounce was likely due to a now-expired home-buyer tax credit and that prices would like- ly fall, perhaps dramatically, in the coming months. Of the 20 U.S. metropolitan
areas covered by the S&P/Case- Shiller home price index, prices improved in 15 on a year-over- year basis. San Francisco led those with
gains with a 14.3 percent jump, followed by San Diego with 11.2 percent growth, Minneapolis with a 10.7 percent increase. Pric- es in the Washington area were up a 7.3 percent. Las Vegas, where foreclosure
signs were seen in practically every neighborhood during the worst of the crisis, remained weak, with prices down 5.2 per- cent. Prices in Charlotte, Seattle, Tampa and Chicago also fell. The unexpectedly high in-
crease overall was good news — economists
surveyed by
Bloomberg News had expected a 3.5 percent advance — but wor- ries about the nation’s housing sector are far from over. Since the federal tax credit
“The report shows the ship is dead in the water now that the homebuyer tax credits have expired.”
—Mitchell Hochberg, a principal with Madden Real Estate Ventures
expired, sales have tumbled de- spite a large inventory of homes on the market and record-low mortgage rates.Homebuyers had to sign contracts by the end of April and close on their purchas- es by Sept. 30 to be eligible for the credit.
Because the Case-Shiller index measures repeat sales ofhomesin a rolling three-month average, the June data captured some transactions in April and May that were covered by the tax credit. “The report shows the ship is
dead in the water now that the homebuyer tax credits have ex- pired,” Mitchell Hochberg, a principal with Madden Real Es- tate Ventures, wrote in a research
Tereal price of housing
S&P/Case-Shiller Composite-20 Index, seasonally adjusted 100 = January 2000 price level
100 125 150 175 200 225 250 275
SOURCE: Standard & Poor’s/Case-Shiller
WASHINGTON AREA June: 184.9
ing market painted by falling homesalesandthe optimisticone illustrated by rising home price points to an imbalance in supply and demand that cannot be sus- tained, analysts said. Paul Dales,
U.S.economist with
Capital Economics, said that “now that home sales have fallen through the floor, it is only a matter of time before prices fall back.” Karl Case, an economics pro-
COMPOSITE-20 147.8
’00 ’02 ’04 ’06 ’08 ’10 THE WASHINGTON POST
note. The effect of the end of the
Housing1-g PROOF2
Topic: Financial Stocks edge up, but Fed reportworries investors
Run Date: 09. 01. 10 Size: 11p x 3.2 inches Artist: Tobey
BY BERNARD CONDON AND STEPHEN BERNARD
new york — The stock market endeditsworstAugust since 2001 with meager gains Tuesday after minutes from the latest Federal Reserve meeting showed offi- cials’ increasing concern about the economy. Stock indexes gave up most of
their gains inmid-afternoonafter the release of minutes from the Fed’s Aug. 10 meeting. Fed offi- cials said during their discus- sions that they recognized that the economy might need further stimulus beyond the purchases of government debt the central bank announced that day. TheDowJones industrial aver-
age rose 4.99, or 0.05 percent, to close at 10,014.72, after a reading on consumer confidence for Au- gust came in stronger than ex- pected. Broader indexes were
mixed. The Standard & Poor’s 500-stock index edged up 0.41, or 0.04 percent, to 1049.33. The Nasdaq composite index fell 5.94, or 0.3 percent, to 2114.03. Stocks fell sharply formuch of
August after a series of reports suggested that the recovery has weakened.The S&P500, themea- sure used most by stock market professionals, finished themonth with a loss of 4.7 percent. It was the S&P 500’s worst
showing for August since 2001, when it lost 6.4 percent as the dot-com bubble collapsed. For the year to date, the S&P 500 is down 5.9 percent. The Dow lost 4.3 percent in August, while the Nasdaq lost 6.2 percent. Wary investors turned to gold
Tuesday, sending the price to its highest level in two months, de- spite slightly more optimistic economic news. Gold for Decem- ber delivery rose $11 to settle at $1,249 an ounce as it neared
6Monitor your investments
atwashingtonpost.com/markets
Daily Stock Market Performance Index
Dow Jones Industrial Average
11,300 10,600 9900 9200
Nasdaq Composite Index
2550 2350 2150 1950
S&P 500 Index 1230
1170 1110 1050 990
1049.33 0.0 –5.9 2114.03 –0.3 –6.8 10,014.72
Close %Chg 0.0
Daily
%Chg –4.0
YTD
its record-high settlement of $1,258.30 an ounce, which was set earlier this year. “Ultimately, the economy is
still in somewhat of a fragile area, and I think the market is very sensitive to news,” said Rich Il- czyszyn, senior market strategist at Lind-Waldock. “Right now, we’re seeing a trade into gold based on a little bit of fear.” Energy prices also felt the im-
pact of the economic uncertainty ahead of Labor Day weekend. Benchmark crude for October delivery lost $2.78 to settle at $71.92 on the New York Mercan- tile Exchange. Some investors worry that the
signals of weakness in the econo- my that have emerged in recent weeks could suggest a slowdown throughout the second half of the year and possibly even a dip back into recession. Traders who have hoped that the Fedwould bemore aggressive
to stimulate the economy aren’t so sure nowthat the central bank will act. DanCook, seniormarket analyst with the brokerage firm IG Markets, said the minutes gave a picture of a cautious and conservative Fed. “People are thinkingmaybewe
need more of a downturn before the Fed will jump in,” Cook said. Unlike traders, he said, “the Fed moves like a glacier.” Overseas, Japanese stocks
were hammered as the yen hov- ers near a 15-year high against the dollar. Many Japanese com- panies such as Sony, Panasonic and Toyota rely heavily on ex- ports, so a stronger yen cuts into their profits. Japan’sNikkei stock average tumbled to a 16-month low on Tuesday, falling 3.6 per- cent.
—Associated Press
Associated Press staff writer Sandy Shore contributed to this report.
THEMARKETS
Industry Group Real Estate Mgmt & Dev Wireless Telecomm Svcs Paper & Forest Products Metals & Mining
S&P 500 Industry Group Snapshot Daily
Divers Financial Svcs Health Care Eqp & Suppl Semiconductors & Semi Eqp Electrnc Eqp, Instr, Comp Construction Materials Diversified Consumer Svcs
%Chg 3.08 2.17 1.76 1.75 1.16
–1.26 –1.54 –1.65 –1.84 –2.60
International Stock Markets Daily
Americas
Brazil (Bovespa) Canada (S&P/TSX Comp.) Mexico (Bolsa) Europe
Eurozone (DJ Stoxx 600) France (CAC 40) Germany (DAX) U.K. (FTSE 100)
Asia Pacific S O N D J
Company 3M
Alcoa
AmExp AT&T BoA
Boeing
Caterpillar Chevron
Exxon Mobil GE
Home Depot HP
Dow Jones 30 Industrials Daily
Close 78.55
10.22 39.87 27.03 12.46 61.13 65.16 74.08
Cisco Systems 19.99 Coca-Cola DuPont
55.88 40.77 59.11 14.48 27.82 38.45
%Chg %Chg –1.4
–0.3 –0.1 1.5 1.1
–1.6 1.1
0.4
–1.6 0.6 1.1
0.2
–0.3 –0.6 –0.3
Other Measures Index
Post-Bloomberg DC Area Index CBOE Volatility (VIX)
YTD –5.0
–36.6 –1.6 –3.6
–17.3 12.9 14.3 –3.8
–16.5 –2.0 21.1
–13.3 –4.3 –3.8
–25.4 Close
DJ Total Stock Market Index 10,929.49 Russell 2000
602.06 181.30 26.05
F M A M J J A
Company IBM
Intel J&J
JPMorgCh Kraft Foods McDonald's Merck
Microsoft P&G Co Pfizer
Travelers
United Tech Verizon
Wal-Mart Walt Disney
Close 123.13
17.67 57.02 36.36 29.91 73.06 35.16 23.47 59.67 15.91 48.99 65.21 29.53 50.14 32.54
Daily%Chg 0.0 0.1
–0.2 –4.3
%Chg %Chg –0.2
Daily
–1.6 –0.5 1.4 0.7 0.4 1.2
–0.7 0.5 0.3 0.1
–0.3 0.3
–0.8 0.6
YTD –5.9
–13.4 –11.5 –12.7 10.0 17.0 –3.8
–23.0 –1.6
–12.5 –1.7 –6.1 –4.6 –6.2 0.9
YTD%Chg –4.9 –3.7 –3.2 20.2
Australia (ASX 200) China (CSI 300) Hong Kong (Hang Seng) Japan (Nikkei)
4404.20 2903.19
20,536.49 8824.06
Cross Currency Rates EU €
US $ per EU € per
Japan ¥ per Britain £ per Brazil R$ per
Canada $ per Mexico $ per
0.7887
84.0400 106.5500 0.6516 1.7549 1.0656
0.8262 2.2253 1.3512
13.1977
Interest Rates Consumer Rates
Money market funds 6-Month CDs 1-Year CDs 5-Year CDs New car loan Home-equity loan
0.73 0.77 1.09 2.35 6.07 7.28
16.7340 –1.1
–0.4 –1.0 –3.6
US$Brazil R$ Canada$Mexico $ 1.2679
Japan ¥ 0.0119 0.0094
0.0078 0.0209 0.0127 0.1570
Britain £ 1.5348 1.2104
128.9800
2.6939 1.6356
20.2553
0.5699 0.4494 47.8971 0.3712
0.6073 7.5210
0.9384 0.7401
78.8700 0.6114 1.6475
12.3850
0.0758 0.0598 6.3680 0.0494 0.1330 0.0807
Close
65,145.45 11,913.86 31,679.85
251.31
%Chg 1.4 0.2 0.9
0.1
3490.790.1 5925.220.2 5225.220.5
YTD%Chg –20%
–4.0% 0 +4.0%
Commodities Futures
Copper Corn
Crude Oil Gold
Natural Gas
$3.3610 $4.2450 $71.92
$1249.00 $3.82
Close %Chg –1.5 –0.2 –3.7 +0.9 +0.1
Daily
Orange Juice Silver
Soybeans Sugar Wheat
0% +20%
Exchange-Traded (Ticker) %Chg Coffee (COFF.L) Copper (COPA.L) Corn (CORN.L) Cotton (COTN.L) Crude Oil (CRUD.L) Gasoline (UGAS.L) Gold (BULL.L)
1.6
Natural Gas (NGAS.L) Silver (SLVR.L)
Gainers Saks Inc
–0.2 0.3 0.2 0.0 0.6 0.5 1.4 0.0
Gainers and Losers from the S&P 1500 Index Daily
Close %Chg $7.90
Radiant Systems Tollgrade Comm Skywest
Cedar Shopping Cntr PharMerica Corp DG FastChannel Inc Monro Muffler MarineMax Dean Foods Cambrex
Nash Finch
WilmingtonTrustCorp Sprint Nextel Scholastic
UnitedCommunityBank Exponent Inc
Stamps.com
First Fin Bancorp Cliffs Natural Res
0.30% 0.25% 3.25%
Bank Prime Federal Funds LIBOR 3-Month
30-Year fixed mortgage 15-Year fixed mortgage 1-Year ARM
3.64% 3.85% 4.35%
10-year note Yield:
5-year note Yield:
2.47 1.33
4:30 p.m. New York time.
$17.91 $7.24
$12.74 $5.52 $7.76
$15.79 $41.88 $6.56 $10.22 $4.17
$39.27 $8.80 $4.06 $23.43 $2.47
$30.84 $11.44 $15.92 $61.19
19.7 6.7 5.5 5.3 4.7 4.7 4.5 4.4 4.3 4.3 4.3 4.2 4.1 4.1 4.0 3.8 3.8 3.7 3.7 3.7
Losers
Hutchinson Tech Strayer Education Corinthian Colleges Broadcom
United Online Monsanto Co Parexel Intl
RudolphTechnologies Capella Education Griffon
Telephone&DataSys GreatAtla&PacTea LaBranche & Co
Close %Chg $2.87
Daily
$144.64 $4.88 $29.96 $4.93
$52.65 $19.84 $7.91
$62.58 $10.69 $28.89 $3.04 $3.89
AmerMedicalSystems $18.23 TrueReligionApparel Hanmi Financial Helix Energy Sol Arris Group
Collective Brands QuanexBuildingProd
2-year note Yield:
6-month bill Yield:
0.47 0.18
Note:Bank prime is from 10 major banks. Federal Funds rate is the market rate,which can vary from the federal target rate.LIBOR is the London Interbank OfferedRate. Consumer rates are from Bankrate. All figures as of
$17.54 $1.21 $9.10 $8.18 $12.93 $15.80
Treasury Performance Over Past Three Months
–17.1 –9.0 –7.6 –6.4 –6.3 –5.8 –5.5 –5.4 –5.4 –5.1 –5.1 –5.0 –4.9 –4.8 –4.8 –4.7 –4.7 –4.6 –4.5 –4.4
Value of $1000 invested for the past: Daily
$700
government incentive became apparent with reports on July home sales released last week. TheNational Association of Real- tors said that sales of previously owned homes plunged in July to the lowest level in 15 years, while the Commerce Department said that sales of new homes fell to their lowest level since the gov- ernment started tracking the numbers nearly 40 years ago. The grim picture of the hous-
fessor emeritus at Wellesley Col- lege and founding partner of Fiserv Case Shiller Weiss, said during a conference call with analysts Tuesday that despite the recent increase in prices, housing in the longer term has gotten significantly cheaper. Nationwide, according to the
data released Tuesday, prices are 28 percent off their peak in July 2006, but they are up 6 percent from the low in April 2009. “It’s down from the peak an
average of something on the or- der of 30 percent. If you take a 30-year, fixed-interest rate in the low 4s, you take a monthly pay- ment down by roughly half,” Case said. “It’s the best affordable hous-
ing program we’ve ever had in this country,” Case said.
chaa@washpost.com
DIGEST KEVIN CLARK/THE WASHINGTON POST
Contracts on 27 of Sunrise Senior Living’s housing communities will be terminated in a $50 million deal withHCP.
LEGAL
Sunrise reworks contractswithHCP HCPonTuesdaysaidit reached
a$50milliondeal toterminatethe contracts on 27 of its senior hous- ing communities managed by Sunrise SeniorLiving ofMcLean. HCP, which invests in health-
related real estate, said it will en- ter into new arrangements for the 27 communities that will reflect improved operatingmargins. The changes will take place through the endof the year. The company previously shift-
ed 30 communities to new opera- tors from Sunrise, including four that it acquired in June. Sunrise still has contracts at 48 HCP- ownedcommunities. HCP will pay Sunrise $50 mil-
lion as part of the deal,whichwill endlitigationbetweenthe compa- nies. In addition, Sunrise has agreed to limit certain fees and charges associated with its re- maining contracts. In its quarterly report filed
Aug. 3,HCP detailed a 2009 com- plaint against Sunrise based on management of 64 facilities, charging that it failed tomaintain licensesneededfor operation,dis- regardedfacilitybudgets,mishan- dled finances, obstructed efforts toauditoperationsandothermat- ters. Sunrise filed counterclaims saying HCP and its subsidiaries breachedcontractualduties. A second matter regarding
properties that had been removed from that case was filed in July 2009, according to Sunrise’s quar- terlyreport.Sunrisewonaninitial ruling in April but HCP appealed andSunrisehadcross-appealed. In aftermarket trading, Senior Living shares added 34 cents, or
15.4 percent, to $2.55 as of 7 p.m. The stock fell 4 cents in regular trading, closing at $2.21. HCP shares rose to $35.32 after hours, after closing down 13 cents at $35.22.
—AssociatedPress MEDIA
WashingtonTimes may be sold for $1 The company that owns the
Washington Times said the news- paper could be sold for $1 to a UnificationChurch-affiliatedbuy- er, according to a memo released to themediaTuesday. The newspaper has struggled
financially, cutting roughly 40percent of its staff this year and eliminating its sports section. Editorial adviserMichaelMar-
shall’smemo said the preliminary agreement would transfer the pa- per froma company controlled by PrestonMoon, son ofUnification Church leader and newspaper founderRev. SunMyungMoon, to a firmheaded byDoug Joo, anally of the elderMoon. Joo had been the publication’s
chairman, but was ousted in No- vember 2009 along with other se- nior officials. Joo did not immedi- ately return a voice-mailmessage left athishomeTuesday. NewsWorld Communications,
the company controlled by Pres- tonMoon, is also asking Joo’sDel- aware-based News World Media Development to assume the pa- per’s financial and legal obliga- tions to its employees and credi- tors in the tentative deal, accord- ing to the memo. The proposed deal is subject to a 30-day due diligenceperiod.
—AssociatedPress
On Mondays, TheWashington Post offers Capital Business, a weekly publication covering the region’s business community. A one-year subscription costs $49 and is available only to Post subscribers.
Visitwashingtonpost.com/capitalbusiness for more details. Data and graphics by
$1.3760 $19.40
$10.0800 $0.1975 $6.5250
day $1000
Close %Chg 0.0
Daily
+1.9 –1.0 –0.3 –2.8
month $1300
WEDNESDAY, SEPTEMBER 1, 2010
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