A12
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KLMNO WASHINGTON BUSINESS
Foreclosures surge 9 percent in July as banks clear backlog
By Alex Veiga
los angeles — The number of U.S. homes lost to foreclosure rose sharply in July, as lenders took back more properties from homeowners who had been in de- fault for months on end. Lenders repossessed 92,858
BRENDAN MCDERMID/REUTERS After a 265-point drop on Wednesday, the Dow Jones industrial average fell 58.88 points on Thursday. Stocks drop for third consecutive day
Corporate earnings, weak economic data disappoint investors
by Ariana Eunjung Cha and Sonja Ryst
U.S. stocks fell Thursday for the third straight day as weak eco- nomic data and disappointing corporate earnings reports con- tinued to feed investors’ fears that the global recovery has stalled. After falling nearly 110 points in early trading, the Dow Jones in- dustrial average recovered some- what to close at 10,319.95, down 58.88 points, or 0.6 percent. The broader Standard and Poor’s 500- stock index fell 5.86, or 0.5 per- cent, to 1083.61, and the technol- ogy-heavy Nasdaq composite in- dex slid 18.36, or 0.8 percent, to 2190.27. The declines followed a 265- point plunge in the Dow on Wednesday — triggered by a Fed- eral Reserve move to boost growth that some investors took to mean the central bank’s view of the recovery had dimmed. All three major U.S. stock market in- dicators are in the red for the year. The U.S. Labor Department
said Thursday that the number of people filing unemployment claims jumped unexpectedly to a level not seen since February. The foreclosure-listing firm Realty- Trac said the number of homes re- possessed in July surged 6 percent from a year ago. And Cisco Sys- tems, Sara Lee and Kohl’s all dis-
appointed investors with revenue estimates that fell short of ana- lysts’ forecasts. “There’s an increasing amount of palpable fear that there’s not going to be organic growth,” said Jim Grefenstette, senior portfolio manager at Federated Investors. “We think there’ll be more head- winds than tailwinds, and that’ll continue to drive growth down for the economy and for earn- ings.” Grefenstette said consumers
have been paying down their credit card debt and shunning larger mortgages. Without debt- related spending driving eco- nomic growth, he said, it’s harder to feel good about the outlook for corporate profits. “The great debate is how long the consumer will feel it neces- sary to restrain spending and what effect will that have on top- line [sales] growth,” said Dan Greenhaus, Miller Tabak’s chief economic strategist. “We don’t know.” Investors have been scrutiniz- ing macroeconomic data all week to try to figure out whether the re- covery is holding steady — or whether the economy is on the brink of another recession. The Labor Department said
Thursday that initial claims for jobless benefits — an indicator economists use to measure the pace of layoffs and businesses’ willingness to hire — rose to a sea- sonally adjusted 484,000. Ana- lysts had been expecting a small drop.
Bernie McGinn, founder and chief executive of McGinn Invest-
Monitor your investments at
washingtonpost.com/markets.
Daily Stock Market Performance Index
Dow Jones Industrial Average
11,500 10,700 9900 9100
Nasdaq Composite Index
2650 2400 2150 1900
S&P 500 Index 1220 1170 1120 1070 1020 970
1083.61 –0.5 –2.8 2190.27 –0.8 –3.5
ment Management in Alexandria, said that despite the negative cor- porate data over the past 24 hours, “in terms of the doomsday scenario, it’s difficult to fathom with the amount of cash these companies have.” McGinn said he doesn’t think
that unemployment will drop during the next few months but that at some point companies will have to start using their piles of cash to resume hiring. There was more bad news from the housing sector. RealtyTrac, an Irvine, Calif.-based company that tracks foreclosure data, said lend- ers repossessed 92,858 homes in July — the eighth straight month the pace has increased. The Obama administration has launched a number of programs to help struggling homeowners — including an additional $3 billion toward that goal Wednesday — but those efforts have so far brought permanent relief to a relatively small number of bor- rowers.
Overseas, further signs of eco- nomic malaise appeared on Thursday. In Greece, which is still grappling with the fallout of its debt crisis, the government said the economy shrank 1.5 percent in the second quarter of 2010 com- pared with the first quarter. In In- dia, industrial production fell to a 13-month low in June. “The market is again factoring in the possibility of a double-dip recession,” said Hank Smith, chief investment officer at Haverford Investments in Radnor, Pa.
chaa@washpost.com rysts@washost.com
properties last month, up 9 per- cent from June and an increase of 6 percent from July 2009, the foreclosure-listing firm Realty- Trac said Thursday. Banks have stepped up repos- sessions this year to clear out the backlog of bad loans. July marks the eighth consecutive month that the pace of homes lost to foreclosure has increased on an annual basis.
Still, the number of homeown- ers who have fallen behind on their payments remains high, and these borrowers are being al- lowed to stay in their homes lon- ger. That’s partly because lenders are reluctant to add to the glut of foreclosed homes on the market. They also are swamped with an unprecedented number of de-
faulting properties and have been overwhelmed by the volume. The number of properties re- ceiving an initial default notice — the first step in the foreclosure process — rose 1 percent last month from June but was down 28 percent compared with July of last year, RealtyTrac said. Initial defaults have fallen on an annual basis for the past six months. The latest data reflect a fore- closure crisis that continues to drag on as many homeowners struggle to make their monthly payments amid high unemploy- ment, slow job growth and an un- even rebound in home prices. Among states, Nevada posted the highest foreclosure rate in July, with one out of 82 house- holds receiving a foreclosure no- tice. Rounding out the top 10 states with the highest foreclo- sure rates last month were Ari- zona, Florida, California, Idaho, Michigan, Utah, Illinois, Georgia and Maryland. Las Vegas continued to be the
city with the highest foreclosure rate in the U.S., with one out of 71 homes receiving a foreclosure no-
LOCAL DIGEST CONTRACTING
Schneider resigns as Lockheed director Defense contractor Lockheed
Martin said Thursday that direc- tor James Schneider was resign- ing immediately. Bethesda-based Lockheed said in a regulatory filing that Schnei- der, who settled a case with the Securities and Exchange Commis- sion last month relating to his time as the chief financial officer of computer maker Dell, was leav- ing “due to other professional commitments.” Schneider, Dell’s CFO from 2000 to 2006, was part of a settle- ment with Dell and its founder, Michael Dell, over SEC allegations that the company fraudulently pumped up its profits in order to meet Wall Street targets. A Lockheed spokesman said Schneider’s departure was volun- tary.
Schneider joined Lockheed’s board in 2005, serving on com- mittees that included audit and
THE MARKETS 10,319.95
Close %Chg –0.6
Daily
%Chg –1.0
YTD
Industry Group Internet & Catalog Retail Metals & Mining Biotechnology
S&P 500 Industry Group Snapshot Daily
Diversified Telecomm Wireless Telecomm Svcs Real Estate Mgmt & Dev Auto Components
Construction Materials Electrnc Eqp, Instr, Comp Communications Equipment
%Chg 1.27 1.15 1.02 0.93 0.85
–2.12 –2.30 –2.65 –2.82 –6.20
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 A S O N D J
Company 3M
Alcoa
AmExp AT&T BoA
Boeing
Caterpillar Chevron
Dow Jones 30 Industrials Daily
Close 84.01
10.73 42.15 26.66 13.06 64.70 67.50 77.07
Cisco Systems 21.36 Coca-Cola DuPont
Home Depot 27.61 HP
55.69 40.77
Exxon Mobil 60.23 GE
15.50 40.14
%Chg %Chg –0.1
–1.9 0.4
–1.0 –1.4 –1.8 –0.1
–0.3 –1.3 –0.4 –1.5
Other Measures Index
YTD 1.6
0.7 –33.4 4.0
–4.9 –13.3 19.5 18.4 0.1
–10.0 –10.8 –0.6 0.7
–2.3 21.1
–11.7 2.4
–4.6 –22.1 Close
DJ Total Stock Market Index 11,256.91 Russell 2000
616.98
Post-Bloomberg DC Area Index 187.20 CBOE Volatility (VIX)
25.73 F M A M J
Company IBM
Intel J&J
JPMorgCh Kraft Foods McDonald's Merck
Microsoft P&G Co Pfizer
Travelers Wal-Mart Walt Disney
Close 128.30
19.45 58.52 37.81 29.50 72.06 35.04 24.49 59.99 16.20 49.63
United Tech 70.58 Verizon
30.32 50.43 33.99
Daily
0.1 0.0 0.1
–0.3 0.7 0.4
–1.5 –0.5
–1.0 2.6
–1.2 –0.7
J
%Chg %Chg –1.2
YTD –2.0
–4.7 –9.1 –9.3 8.5
15.4 –4.1
–19.7 –1.1
1.3 –10.9 1.4
–0.5 1.7
–2.1 –5.7 5.4
Daily%Chg YTD%Chg –0.5 –0.5 0.0 1.3
–2.1 –1.3 –0.1 18.7
Australia (ASX 200) China (CSI 300) Hong Kong (Hang Seng) Japan (Nikkei)
4400.90 2816.39 21,105.71 9212.59
Cross Currency Rates EU €
US $
US $ per EU € per
Japan ¥ per Britain £ per Brazil R$ per
Canada $ per Mexico $ per
0.7798
85.9100 110.1800 0.6421 1.7696 1.0428
–1.2 –1.2 –0.9 –0.9
Japan ¥
1.2825 0.0116 0.0091
0.8235 0.0075 2.2694 0.0206 1.3374 0.0121
12.7376 16.3349 0.1480
Interest Rates Consumer Rates
Money market funds 6-Month CDs 1-Year CDs 5-Year CDs New car loan Home-equity loan
0.73 0.79 1.11
2.38 6.09 7.39
Britain £ 1.5575 0.5649
Brazil R$ Canada $ Mexico $ 0.9589 0.0785
1.2145 0.4406 0.7477 0.0612 133.8000 48.5365 82.3800 6.7450 0.3627
2.7568 1.6242 0.5892 19.8387 Close
65,966.17 11,523.60 32,041.13
254.93 3621.07 6135.17 5266.06
%Chg 0.3
–0.5 –0.1
0.1
–0.2 –0.3 0.4
YTD%Chg –25%
–8.0% 0 +8.0%
Commodities Futures
Copper Corn
Crude Oil Gold
Natural Gas
compensation. He is the chair- man of Texas-based Horizon Bank.
—Associated Press
Northrop gets defense deal
Northrop Grumman said it has
been awarded a Defense Depart- ment contract potentially worth more than $400 million. The McLean-based company said the contract calls for soft- ware and system support services to help an analytic modernization effort involving the A-Mod Mis- sion Service Bus Framework. The award covers a base year, with an option for four additional years. Northrop Grumman shares fell
ENERGY
AES acquires Premier Power AES, the Arlington energy com-
pany, said Thursday it has ac- quired Premier Power for $160 million in cash. Premier’s assets include a
1,246-megawatt natural gas plant in Northern Ireland. Most of the power plant’s output is contracted to Northern Ireland Electricity, a utility.
AES shares dropped 2 cents
Thursday, closing at $10.59. —Associated Press
On Mondays, The Washington 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.
Visit
washingtonpost.com/capitalbusiness for more details. Data and graphics by
26 cents, to $56.67, in Thursday afternoon trading. —Associated Press
tice in July — more than five times the national average. Lenders are offering a variety of programs to modify their loans, but their success rates vary. The Obama administration has rolled out numerous attempts to tackle the foreclosure crisis but has made only a small dent in the problem. More than 40 percent of participants, or about 530,000 homeowners, have fallen out of the administration’s main effort to assist those facing foreclosure. That program, known as Mak-
ing Home Affordable, has provid- ed permanent help to about 390,000 homeowners, or 30 per- cent of the 1.3 million who have enrolled since March 2009. Real- tyTrac estimates more than 1 mil- lion American households are likely to lose their homes to fore- closure this year. In all, 325,229 properties re- ceived a foreclosure-related warning in July, up 4 percent from June, but down 10 percent from the same month last year. That translates to one in 397 U.S. homes.
— Associated Press
FRIDAY, AUGUST 13, 2010
$3.2825 $4.0625 $75.74
$1214.80 $4.30
Close %Chg +0.9 +2.7 –2.9 +1.4 –0.7
Daily
Orange Juice Silver
Soybeans Sugar Wheat
Value of $1000 invested for the past: Daily
0% +25%
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)
3.1 1.3 3.1 2.4
Natural Gas (NGAS.L) Silver (SLVR.L)
Gainers Arqule
–1.3 –1.5 1.4 1.5 1.1
Gainers and Losers from the S&P 1500 Index Daily
Close %Chg $4.38 9.5
Integral Systems Res-Care Inc Perry Ellis Intl ValueClick
Cross Country Hlth Geo Group
Brinker Intl
Mannatech Inc General Comm Exponent Inc
Men'sWearhouse Office Depot
0.6157 0.0504 1.6972 0.1389 0.0819
7.1980 12.2142
Intrepid Potash Inc Viropharma Motorola
Tower Group Inc CONMED
0.38% 0.25% 3.25%
Bank Prime Federal Funds LIBOR 3-Month
30-Year fixed mortgage 15-Year fixed mortgage 1-Year ARM
3.65% 3.95% 4.51%
10-year note Yield:
5-year note Yield:
2.74 1.48
4:30 p.m. New York time.
$7.16 7.7 $10.73 7.6 $21.32 6.0 $10.49 5.7 $8.15 5.7 $22.70 5.3
Advance Auto Parts $54.62 5.2 Netflix
$133.05 5.2 $15.65 5.1 $2.48 5.1 $8.44 4.6 $32.00 4.5 $19.50 4.5 $4.22 4.5 $24.07 4.4 $13.24 4.3 $8.02 4.2 $23.34 4.2 $19.63 4.1
Losers
Cisco Systems NetApp
Take-TwoInteractive Juniper Networks Corinthian Colleges Polycom Altera
Plexus Corp JDS Uniphase
Pinnacle Financial Jabil Circuit
comScore Inc KB Home
Hutchinson Tech Xilinx
Supertex EMC Corp Dynegy
Live Nation Ent Newport
2-year note Yield:
6-month bill Yield:
0.54 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 Offered Rate. Consumer rates are from Bankrate. All figures as of
Close %Chg $21.36 –10.0
Daily
$37.58 –8.7 $8.51 –7.4 $25.78 –6.8 $7.02 –6.5 $26.69 –6.1 $25.24 –6.1 $26.36 –5.8 $10.46 –5.7 $9.15 –5.5 $11.71 –5.4 $18.01 –5.1 $10.41 –5.1 $3.19 –5.1 $25.50 –5.0 $23.14 –5.0 $18.69 –4.9 $2.78 –4.8 $8.59 –4.8 $10.93 –4.7
Treasury Performance Over Past Three Months $800
$1.3850 $18.07
$10.5700 $0.1897 $7.1300
day $1000
Close %Chg +0.3 +0.9 +1.2 +3.9 +2.6
Daily
month $1200
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