Sales of previously-owned homes fell 0.2 percent in July. It is the fifth straight monthly decline, putting the sales pace at its lowest level in nearly five years. In addition, the National Association of Realtors says home prices fell for a record 12th consecutive month. The median price of a home sold last month slid to $230,200, down 0.6 percent from a year ago. Sales fell 2.2 percent in the midwest and were unchanged in the south. Sales rose by 1.8 percent in the west and one percent in the northeast.
Meanwhile, American Home Mortgage Investment has agreed to hand over servicing rights to $519 million worth of mortgages to Morgan Stanley, the lender that owns them. A last-minute settlement reached Friday headed off a showdown between American Home, which filed for Chapter 11 protection August 6th, and Morgan Stanley, one of its former Wall Street backers. The deal calls for American Home to relinquish its claim to the Morgan Stanley loan files, which will be handed over to Saxon Mortgage Services, a loan servicer acquired by Morgan Stanley in December 2006. In arguing for rights to its loans, Morgan Stanley said it was worried that American Home's insolvency meant its mortgages weren't being taken care of.
Gasoline prices are continuing their downward slide. The Lundberg Survey shows a drop of about 2.9 cents per gallon over the last two weeks. The average price of self-serve regular nationwide was about $2.75 a gallon as of Friday. Mid-grade was $2.88, while premium was $2.99. The lowest average price was in Phoenix, where a gallon of regular cost $2.51. Honolulu had the highest at $3.12.
Officials at the Dubai port, the world's largest manmade port, say a fire that broke out today will not affect shipping operations, including oil. The blaze in Dubai started in a warehouse that holds industrial chemicals. Nobody was hurt but the fire sent thick black smoke billowing into the air and took firefighters more than three hours to bring under control. The cause is under investigation. Dubai is one of the United Arab Emirates, which are among the world's chief oil exporters. The Dubai facility also contains the Emirates's second largest refinery and has become the gulf region's largest commercial and industrial hub.
There's a new promise from China and Southeast Asian countries to strengthen product standards and safety. The announcement from economic ministers meeting in the Philippines over the weekend follows the recalls of several tainted Chinese products from international markets. But at the same time, China's commerce minister is defending the quality of Chinese goods. He says 99 percent of China's exports to the U.S. and Japan pass quality controls, and meet global quality standards. The joint statement issued by the ten economic ministers said all parties should actively cooperate in improving risk control and ensuring quality.
Ground has been broken for expansion at the Children's Museum. A $35 million building addition is expected to be completed in the spring of 2009 that will double the museum's space. New exhibits are planned focusing on building knowledge of mathematics, science, civic engagement, financial theory, diverse cultures and arts, personal fitness, materials science, invention and engineering and early childhood development. The museum is staying open during the entire duration of the expansion construction.
Investors will see something of a pick-up in economic releases in the week ahead, highlighted by a report on consumer confidence. On Tuesday, the Conference Board releases its Index of Consumer Confidence, seen sliding. Reports are also due this week on the Gross Domestic Product, personal income and spending as well as factory orders.