U.S. mortgage applications fall as rates push higher: MBA

An empty post where a ''for sale'' sign used to hang is seen outside a home in Brentwood, New York February 10, 2012.

Credit: Reuters/Shannon Stapleton

NEW YORK | Wed Aug 21, 2013 7:04am EDT

NEW YORK (Reuters) - Applications for U.S. home loans fell for a second straight week and higher interest rates reduced refinancing activity, data from an industry group showed on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 4.6 percent in the week ended August 16.

The decline came as 30-year mortgage rates rose 12 basis points to 4.68 percent, matching the year's high first hit in July.

Interest rates spiked in late May after the Federal Reserve signaled it could begin scaling back its $85 billion in monthly bond purchases by the end of the year, with investors now betting it could happen as soon as September.

Prospects of the Fed tapering its stimulus has made financial markets jittery. This week, U.S. benchmark 10-year Treasury yields hit a two-year high of 2.9 percent, more than a percentage point above their level in May.

Demand to refinance existing loans has declined as rates have climbed. The refinance index shed 7.7 percent last week, its biggest weekly fall since late June, and is down 62.1 percent since peaking in the week ending May 3. The refinance share of total mortgage activity slipped to 62 percent from 63 percent the prior week.

Rates remain fairly low by historical standards, however, and the gauge of loan requests for home purchases, a leading indicator of home sales, rose 1.2 percent, after falling 5.4 percent the previous week.

The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.

(Reporting By Steven C. Johnson)

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U.S. mortgage applications fall as rates push higher: MBA

An empty post where a ''for sale'' sign used to hang is seen outside a home in Brentwood, New York February 10, 2012.

Credit: Reuters/Shannon Stapleton

NEW YORK | Wed Aug 21, 2013 7:04am EDT

NEW YORK (Reuters) - Applications for U.S. home loans fell for a second straight week and higher interest rates reduced refinancing activity, data from an industry group showed on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 4.6 percent in the week ended August 16.

The decline came as 30-year mortgage rates rose 12 basis points to 4.68 percent, matching the year's high first hit in July.

Interest rates spiked in late May after the Federal Reserve signaled it could begin scaling back its $85 billion in monthly bond purchases by the end of the year, with investors now betting it could happen as soon as September.

Prospects of the Fed tapering its stimulus has made financial markets jittery. This week, U.S. benchmark 10-year Treasury yields hit a two-year high of 2.9 percent, more than a percentage point above their level in May.

Demand to refinance existing loans has declined as rates have climbed. The refinance index shed 7.7 percent last week, its biggest weekly fall since late June, and is down 62.1 percent since peaking in the week ending May 3. The refinance share of total mortgage activity slipped to 62 percent from 63 percent the prior week.

Rates remain fairly low by historical standards, however, and the gauge of loan requests for home purchases, a leading indicator of home sales, rose 1.2 percent, after falling 5.4 percent the previous week.

The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.

(Reporting By Steven C. Johnson)

View the original article here

This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

U.S. mortgage applications fall as rates push higher: MBA

An empty post where a ''for sale'' sign used to hang is seen outside a home in Brentwood, New York February 10, 2012.

Credit: Reuters/Shannon Stapleton

NEW YORK | Wed Aug 21, 2013 7:04am EDT

NEW YORK (Reuters) - Applications for U.S. home loans fell for a second straight week and higher interest rates reduced refinancing activity, data from an industry group showed on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 4.6 percent in the week ended August 16.

The decline came as 30-year mortgage rates rose 12 basis points to 4.68 percent, matching the year's high first hit in July.

Interest rates spiked in late May after the Federal Reserve signaled it could begin scaling back its $85 billion in monthly bond purchases by the end of the year, with investors now betting it could happen as soon as September.

Prospects of the Fed tapering its stimulus has made financial markets jittery. This week, U.S. benchmark 10-year Treasury yields hit a two-year high of 2.9 percent, more than a percentage point above their level in May.

Demand to refinance existing loans has declined as rates have climbed. The refinance index shed 7.7 percent last week, its biggest weekly fall since late June, and is down 62.1 percent since peaking in the week ending May 3. The refinance share of total mortgage activity slipped to 62 percent from 63 percent the prior week.

Rates remain fairly low by historical standards, however, and the gauge of loan requests for home purchases, a leading indicator of home sales, rose 1.2 percent, after falling 5.4 percent the previous week.

The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.

(Reporting By Steven C. Johnson)

View the original article here

This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

Amazon.com posts 2Q loss, higher revenue

SAN FRANCISCO (AP) — Amazon.com Inc. reported a surprise loss in the second quarter, as higher revenue was not enough to make up for rising operating expenses. The world's largest online retailer has been spending heavily on order fulfillment and digital content rights, which continue to weigh on profit margins.

Amazon has long focused on spending the money it makes to grow its business and expand into new areas from movie streaming to e-readers and even grocery delivery. Investors have largely forgiven thin profit margins and zeroed in on the company's solid revenue growth and long-term prospects.

But such patience won't last forever. Seattle-based Amazon's stock fell $5.40, or 1.8 percent, to $298 in extended trading after the results came out.

BGC Financial analyst Colin Gillis said that while investors have been "rewarding Amazon for its investment cycle," the clock is ticking and Wall Street is looking to start reaping the rewards.

Amazon, which also makes the Kindle tablets and e-reader devices, said Thursday that its loss was $7 million, or 2 cents per share, in the April-June quarter. That's down from earnings of $7 million, or 1 cent per share, a year ago.

Revenue rose 22 percent to $15.7 billion from $12.83 billion.

Analysts, on average, were expecting earnings of 5 cents per share on revenue of $15.73 billion, according to a poll by FactSet.

Operating expenses rose 23 percent to $15.63 billion from $12.73 billion a year ago.

For the current quarter, Amazon is forecasting revenue of $15.45 billion to $17.15 billion. Analysts were expecting $16.97 billion.

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Starbucks beats on higher sales, lifts forecast

NEW YORK (AP) — Starbucks says its profit climbed 25 percent in the latest quarter as its coffee costs eased and more caffeine-addicted customers flocked to its cafes around the world, with people in the U.S. spending a little more on items such as revamped sandwiches and new salads.

The results topped Wall Street expectations, and the company raised its full-year guidance. Starbucks' shares were up almost 7 percent in aftermarket trading.

The Seattle-based chain, which has more than 19,000 locations around the world, said global sales rose 8 percent at cafes open at least 13 months, with all regions registering growth. In its flagship U.S. market, the figure rose 9 percent.

The performance is in contrast to McDonald's Corp., which reported an underwhelming 1 percent increase in U.S. locations open at least a year earlier this week. The fast-food chain had partly blamed economic conditions, saying people have been reluctant to eat out.

Troy Alstead, chief financial officer for the chain, said the results demonstrate people's loyalty to the Starbucks brand, despite factors such as bad weather or a weak economy cited by other companies for underwhelming results in the quarter.

"We have some resilience, some insulation," Alstead said.

"Starbucks today exists within a universe of one," CEO Howard Schultz emphasized n a call with analysts.

Starbucks has been making a number of changes to drive up sales. In April, it rolled out revamped sandwiches in new packaging that come with slightly higher prices; the new egg salad sandwich, for example, costs $5.25, up from $5.15 previously.

New salads and grain bowls were also introduced at about $7 per box.

Moving forward, the company has been testing new baked goods — acknowledging that its baked goods don't have a great reputation. It also announced that it's teaming up with Danone to offer new, branded Greek yogurt parfaits that are set to start replacing its current offerings in cafes by next year.

It's also pushing aggressively to enroll people in its loyalty program, offering incentives such as a $5 load on cards for people who sign up. The benefits are twofold; Alstead said people tend to visit more often and spend more once they enroll.

In the meantime, Starbucks is also benefiting greatly from lower coffee costs, which are expected to continue for at least another year and half. Despite its lower costs, the company last month instituted price hikes in the U.S., a move which should help widen its operating margins even further.

Starbucks said sales rose 9 percent in China and the greater Asia region for the quarter. It also managed to increase sales by 2 percent at established cafes in Europe, where the company has been struggling. The company has been closing underperforming stores and licensing out operations in other regions.

Looking ahead, it cautioned that sales at established locations would ease back into the 5 percent to 7 percent range it saw in the first half of the year.

Starbucks Corp. earned $417.8 million, or 55 cents per share, for the period ended June 30. That's up from $333.1 million, or 43 cents per share, a year ago.

Analysts on average expected 53 cents per share.

Revenue rose to $3.74 billion, more than the $3.72 billion analysts had forecast.

It now expects earnings per share in the range of $2.22 to $2.23, up from $2.12 to $2.18.

Its shares rose to $72.30, after closing up 2 percent at $68.17. Its stock is up 34 percent over the past year.

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Follow Candice Choi at www.twitter.com/candicechoi

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