The problems with sub-prime mortgages are hitting home with a record number of homeowners. The number of people who got foreclosure notices in the spring was at an all-time high. The Mortgage Bankers Association says the level of mortgage-holders starting the foreclosure process in the April-to-June quarter reached nearly two-thirds of one percent. That's the third consecutive quarter in which the figure has reached an all-time high. The delinquency rate was also up sharply during the spring, reaching 5.12 percent of all loans. That's up nearly three-quarters of a point from the same period a year ago. The rate tracks the number of people who are behind in their payments but haven't yet started the foreclosure process.
A new report indicates the nation's services sector continued to expand at a solid pace last month. The Institute for Supply Management says its index came in at 55.8, unchanged from the previous month. Any number above 50 indicates growth. The reading is stronger than expected. The services sector includes a variety of industries including restaurants, banking, construction and travel. A late back-to-school surge helped retail sales to get a boost last month. Major chains are reporting generally solid results. Winners include Wal-Mart, Target and Saks. Analysts remain concerned that the consumer will pull back in the months ahead from the troubled housing market and rising prices. Wal-Mart, the world's largest retailer, reports a 3.1 percent increase in sales at stores open at least a year. It says electronics, school supplies and children's apparel were among the top-selling categories. Luxury stores again did well as shoppers splurged on status handbags and other expensive items. They include Saks and Nordstrom.
The number of newly laid-off workers filing claims for unemployment benefits fell last week for the first time in seven weeks. The Labor Department says jobless claims dropped to 318,000, down 19,000 from the previous week. The improvement was double what had been expected, and pushed the total claims level to the lowest point in five weeks. A string of increases in jobless applications had raised concerns that the severe slump in housing was beginning to take its toll on the labor market. The government reports August jobless figures on Friday.
A measure of online job demand shows a modest rise in August. The Monster Employment Index rose three points, said to reflect a slight rebound in online job availability after the slower summer months. The index is based on millions of posted jobs from across more than 1,500 different Internet sites. The operator of the Monster Employment site says the August increase is smaller than seen in years past. An executive says the ''findings suggest that employers are recruiting more cautiously.''
Worker productivity is on the rise--at its fastest pace in two years. At the same time, wage pressures have eased sharply. Both are developments that should reduce concerns about inflation. The Labor Department says productivity jumped to an annual growth rate of 2.6 percent between April and June. That's even better than the 1.8 percent rise that was initially reported. Productivity is the amount of output per hour of work. As measured by unit labor costs, wage pressures slowed to an annual growth rate of 1.4 percent. Initially, they were estimated to be rising at a 2.1 percent rate. If rising wages aren't accompanied by increased productivity, they can trigger unwanted inflation.
Houston-based Synthesis Energy Systems is investigating the development of coal-based gasification facilities for chemical manufacturers whose plants have been shuttered because of the high cost of natural gas. SES and its partners will investigate the feasibility of developing substitute natural gas facilities, using coal gasification technology to convert coal into higher-value products such as methanol, ethanol, mixed alcohols and ammonia. The projects will be focused on CONSOL Energy's North Appalachian mine sites in Pennsylvania, West Virginia and Ohio.
Houston-based Encysive Pharmaceuticals has been unable to have a decision by the Food and Drug Administration overturned, according to the Houston Business Journal. An FDA decision last June requesting additional study of Thelin, designed to fight a fatal lung disease, delayed the drug reaching the market. The company's CEO and 70 employees were consequently fired. But now, an FDA reviewer is agreeing that additional study of Thelin is needed. The drug has been approved in Europe.
State Farm says damage from Hurricane Katrina's winds is covered under its policy. But the insurance company is urging a federal appeals court to uphold policy language that the company has used to deny hundreds of homeowners' claims after the storm. State Farm says its policies don't cover damage from rising water, and also says damage from a combination of wind and rising water is excluded from coverage. Last year a federal judge in Mississippi ruled that the "anti-concurrent cause'' policy language is ambiguous and therefore can't be enforced. State Farm appealed to a New Orleans circuit court, where a three-judge panel listened to arguments. The company told the judges the contested clause is similar to one written into nationwide policies, which was not found to ambiguous.
Houston-based Moody National has acquired a portfolio of 19 Marriott-branded hotels for $440 million-Moody's largest transaction to date. Moody National will spend another $20 million on improvements at the hotels. The acquisition includes the Spring Hill Suites on Old Spanish Trail.
Houston-based Ashmore Energy International is selling its majority share in liquified petroleum gas distributor Vengas to Petroleos de Venezuela, according to the Houston Business Journal. Vengas operates 25 filling plants, 38 branches, 683 transportation vehicles and more than four million cylinders.
U.S. gasoline supplies fell last week for a fifth straight week. The decline reported by the Energy Department comes despite surging production and imports. Stockpiles of the motor fuel fell by 1.5 million barrels, now nearly nine percent below year-ago levels. Refineries boosted production, running at more than 92 percent of their capacity. The report says crude oil inventories fell by 3.9 million barrels. Distillates, which include diesel and heating oil, rose by 2.3 million barrels.
The European Central Bank has held its benchmark interest rate steady at four percent. That is seen as an acknowledgment of the volatility that has troubled financial markets since early last month. The head of the ECB says the bank will ''monitor'' very closely economic conditions. The ECB sets monetary policy for a bloc of 317 million people that accounts for some 15 percent of the world's Gross Domestic Product. Earlier today, the Bank of England also left its benchmark rate unchanged at 5.75 percent.
Billionaire oil tycoon T. Boone Pickens is seeking to form fresh water supply districts in two Texas counties to ship water from the panhandle to thirsty cities elsewhere. Fresh water supply districts have been established in Texas since 1919, when the legislature authorized them under the Conservation Amendment of 1917 for the exclusive purpose of providing and distributing water for domestic and commercial use. The districts are organized on much the same basis as the water improvement districts and have no limitation on bonds or taxation. Through petitions, local commissioners' courts or individuals can request hearings and elections for new districts. A board of five elected supervisors directs the affairs of each district. As of September 1st, the only qualifications for a supervisor are that he or she be a Texas resident, own property within the district and be at least 18. Previously, a supervisor had to be a registered voter living in the district. The board fixes rates paid by water users, decides the terms on which water can be furnished, and makes rules regarding water use and distribution. The revenue earned is used for operation and maintenance expenses or to help pay debts or interest on bonds. The board also has the power to acquire rights-of-way for the construction of pipelines, levees, sewer systems, bridges, and other structures through private and public land, and it awards contracts to the lowest and best bidders for such construction.
Hewlett-Packard has unveiled two new cell phones, pushing deeper into the lucrative mobile phone market and broadening the array of equipment it can sell to large companies. The phones were launched during a celebrity-studded gala in New York on Wednesday. It was highlighted by one of the Palo Alto company's most ambitious product rollouts, for the iPaq brand of handheld devices. Besides introducing several new HP laptop and desktop computers and a high-performance gaming PC, the launch included more than 55 products, including services, the two new phones and new personal digital assistants, or handheld computers. The two phones signal a new direction for HP as it builds off its strength in the PDA market and its ubiquity in corporate it server rooms and employee offices and tries also to become a full-fledged smart phone maker.
American Airlines has inaugurated daily nonstop flights between Minneapolis-St. Paul and New York's LaGuardia International Airport. The service adds new competition at the headquarters hub of Northwest Airlines. Senior Vice President of Global Sales David Cush says American is targeting New York-based corporate travelers. The Fort Worth-based carrier is offering three daily nonstops on weekdays with MD-80s that seat 120 in coach and 16 in first class. It will operate one flight on Saturdays and two on Sundays. Eagan-based Northwest remains the dominant Twin Cities-to-New York carrier, and American's new service isn't expected to set off an immediate fare war.
Continental Airlines is now the official airline of the New York Giants. The Houston-based carrier has signed a multi-year marketing agreement with the team. Continental is also the official airline for the Houston Texans and the Cleveland Browns. Continental has a hub at Newark Liberty International Airport.