Signed home-sale contracts fell 1.3 percent in July
WASHINGTON (AP) -- The number of people who signed contracts to buy homes fell in July, further evidence that the depressed housing market remains a drag on the economy.
The National Association of Realtors said Monday that its index of sales agreements fell 1.3 percent in July to a reading of 89.7.
A reading of 100 is considered healthy by economists. The last time the index reached that level was in April 2010, the final month that buyers could qualify for a federal tax credit.
Contract signings are usually a reliable indicator of where the housing market is headed. There's typically a one- to two-month lag between a sales contract and a completed deal.
But the Realtors group says a growing number of buyers have canceled contracts after appraisals showed the homes were worth less than they bid. A sale isn't final until a mortgage is closed.
BofA cuts China bank stake
NEW YORK (AP) -- Bank of America Corp. is selling half of its stake in China Construction Bank Corp. to raise cash and shore up its capital base.
The nation's largest bank by assets said Monday that it will sell 13.1 billion shares in the Chinese bank for $8.3 billion to a group of investors it declined to name. The sale, which had been expected, will generate a gain of $3.3 billion for Bank of America.
The news came four days after the Charlotte, N.C., bank got a $5 billion investment from Warren Buffett's Berkshire Hathaway Inc., which provided a big boost to Bank of America's battered stock. The billionaire investor made investments in other major companies such as Goldman Sachs Group Inc., helping restore confidence in them when they were out of favor.
Bank of America rose 63 cents, or 8.1 percent, to $8.39 Monday. The stock closed at $6.30 last Tuesday, two days before Berkshire announced its investment.
Short-term T-bill rates static
WASHINGTON (AP) -- Interest rates on short-term Treasury bills were unchanged in Monday's auction, with rates on six-month bills remaining at a record low.
The Treasury Department auctioned $29 billion in three-month bills at a discount rate of 0.015 percent, the same as last week. Another $27 billion in six-month bills was auctioned at a discount rate of 0.045 percent, also unchanged from last week.
The 0.015 percent for three-month bills was the lowest since these bills averaged 0.005 percent Dec. 8, 2008, during the financial crisis.
The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,999.62, while a six-month bill sold for $9,997.73. That would equal an annualized rate of 0.015 percent for the three-month bills and 0.046 percent for the six-month bills.
Irene highlights policy gaps
Hurricane Irene is providing a painful reminder that the vast majority of homeowners insurance policies do not cover damage from flooding.
That's a difficult reality for those who spent Monday cleaning up flooded basements, cursing failed sump pumps or fixing water damage.
Whether water damage is covered depends on how it came about. Standard homeowners policies cover structural and water damage when wind or a falling tree knocks a hole in a roof, or breaks a window, allowing rain to fall inside. But there's generally no coverage for the home itself, or for personal belongings, when damage results from rising water. That includes water that seeps up from saturated ground through a basement floor and homes near beaches flooded by storm surges.
Lapp Insulators Group sold
A German equity firm and company management have acquired Lapp Insulators Group, a maker of electric insulators with a plant in Le Roy.
Quadriga Capital and Lapp management have agreed to acquire the company from another investment firm, Andlinger & Co. Lapp has about 125 employees in Le Roy and 1,100 at plants in Germany, the United States, Poland, Romania and China.
The company, which makes high voltage electric insulators for the energy industry, has annual sales that top $185 million.