Average U.S. Rate on 30-year Mortgage Edges up to 3.94%

The Gilmer Free Press

WASHINGTON, D.C. — Average long-term U.S. mortgage rates edged up this week after three straight weeks of declines. The key 30-year loan rate remained under 4 percent.

Mortgage giant Freddie Mac said Thursday the average rate on a 30-year fixed-rate mortgage rose to 3.94 percent from 3.91 percent a week earlier. The rate on 15-year fixed-rate mortgages increased to 3.17 percent from 3.13 percent.

A solid U.S. employment report for July out last Friday – with employers adding 215,000 jobs and the jobless rate steady at 5.3 percent – means there’s a strong chance that the anticipated interest rate increase by the Federal Reserve will occur next month. The Fed has kept its key short-term rate near zero since the financial crisis year 2008.

However, China’s sharp and sudden devaluation of its currency against the dollar this week could complicate the Fed’s decision on timing of a rate increase. The rising dollar has been hurting U.S. exporters by making their goods costlier abroad. By making Chinese goods comparatively cheaper in the United States, a weaker yuan would push already-low U.S. inflation even lower.

The Fed wants to be “reasonably confident” that inflation is returning to its 2 percent target before raising rates. Inflation has risen just 1.3 percent in the past 12 months.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was unchanged from last week at 0.6 point. The fee for a 15-year loan also held steady at 0.6 point.

The average rate on five-year adjustable-rate mortgages fell to 2.93 percent from 2.95 percent; the fee increased to 0.5 point from 0.4 point. The average rate on one-year ARMs jumped to 2.62 percent from 2.54 percent; the fee was unchanged at 0.3 point.

Wall Street Edges Up after Upbeat Data, Greek Bailout Agreement

The Gilmer Free Press

U.S. stocks ended a volatile week higher on Friday after upbeat U.S. economic data and as euro zone finance ministers agreed to launch a third bailout program for Greece.

All three major indexes also ended the week with slight gains, bouncing back from losses earlier in the week set off by worries over a slowdown in China and a yuan devaluation.

Gains in shares of retailers helped buoy the market. Nordstrom (JWN.N) and J.C. Penney (JCP.N) both rose after the department store chains posted better-than-expected quarterly results.

U.S. producer prices rose for a third straight month in July, suggesting the drag on inflation from weaker oil prices was easing, while industrial output advanced at its strongest pace in eight months.

Though the Chinese currency devaluation added some uncertainty to the outlook for a Federal Reserve interest rate hike, most traders and economists are still expecting a September increase.

That kept the market from breaking out of its trading range, said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

The Dow Jones industrial average .DJI rose 69.15 points, or 0.4 percent, to 17,477.4, while the S&P 500 .SPX gained 8.15 points, or 0.39 percent, to 2,091.54.

The Nasdaq Composite .IXIC, which swung 167 points from its low this week to its high, added 14.68 points, or 0.29 percent, to 5,048.24.

For the week, the Dow rose 0.6 percent, the S&P 500 added 0.7 percent and the Nasdaq gained 0.1 percent.

The day’s economic data followed strong employment and retail sales data for July on Thursday, which overall suggested the third quarter was off to a healthy start.

Nine of the 10 S&P 500 sectors ended higher.

Energy shares dipped in afternoon trade and the energy index .SPNY ended down 0.2 percent. Still, the energy index rose 3.2 percent for the week, its biggest gain since March.

J.C. Penney rose 5.6 percent at $8.52, Nordstrom jumped 4.3 percent to $78.13 and was among the biggest percentage gainers in the S&P 500, while the S&P retail index .SPXRT rose 0.4 percent.

Restaurant operator El Pollo Loco (LOCO.O) fell 20.7 percent to $14.56, below its IPO price, after weak quarterly results.

Sysco (SYY.N) rose 7.4 percent to $41.38 after Nelson Peltz reported a 7-percent stake in the food distributor and said he would seek representation on the company’s board.

NYSE advancers outnumbered decliners 2,072 to 962; on the Nasdaq, 1,697 issues rose and 1,096 fell. The S&P 500 posted 21 new 52-week highs and 11 new lows; the Nasdaq recorded 62 new highs and 101 new lows.

About 5.2 billion shares changed hands on U.S. exchanges, below the 7.1 billion daily average for the month to date.

Wall Street Ends Flat as Energy Shares Drop with Oil

The Gilmer Free Press

U.S. stocks finished flat on Thursday as a drop in energy shares offset a rebound in retail sales and stronger-than-expected Cisco results.

The S&P energy index .SPNY dropped 1.4 percent, leading the decline in the S&P 500, as U.S. crude oil prices slid to a 6-1/2-year low.

The S&P consumer discretionary index .SPLRCD rose 0.6 percent, the most among the major 10 S&P sectors, but it had been higher earlier.

U.S. retail sales rose in July, while the trend of weekly jobless claims pointed to a tightening job market. The data supported the view the Federal Reserve could raise interest rates as early as next month, offsetting speculation in the previous two sessions that the Fed could wait until December to raise rates after China devalued its currency.

Jitters over China remained. Sources said this week that some powerful voices in the government were pushing for an even deeper yuan devaluation to help China’s struggling exporters.

Cisco (CSCO.O) jumped 2.9 percent to $28.70, giving the biggest boost to the Nasdaq and the S&P 500.

The Dow Jones industrial average .DJI rose 5.74 points, or 0.03 percent, to 17,408.25; the S&P 500 .SPX lost 2.66 points, or 0.13 percent, to 2,083.39; and the Nasdaq Composite .IXIC dropped 10.83 points, or 0.21 percent, to 5,033.56.

The S&P financial index .SPSY rose 0.3 percent, after falling in the previous two sessions.

In corporate news, retailers posted mixed quarterly results.

Kohl’s (KSS.N) fell 8.8 percent to $56.11 after its same-store sales missed expectations. After the bell, shares of Nordstrom’s (JWN.N) rose 5.7 percent following its results.

During the regular session, News Corp (NWSA.O) rose 7.6 percent to $15.19 after the Wall Street Journal owner’s profit topped estimates, helped by cost cuts at its news business, including Dow Jones.

Also, shares of Shake Shack Inc (SHAK.N) dropped 15.9 percent to $54.49 in its biggest one-day percentage decline since its debut, after the company said it had priced a 4 million-share offering at $60 per share, well below a $64.79 closing price on Wednesday.

Tesla (TSLA.O) rose 1.8 percent to $242.51 after unveiling plans to raise about $500 million through a share sale, with Chief Executive Officer Elon Musk buying shares worth up to $20 million. [ID:nL3N10O4CX]

Declining issues outnumbered advancing ones on the NYSE by 1,821 to 1,204, for a 1.51-to-1 ratio on the downside; on the Nasdaq, 1,575 issues fell and 1,237 advanced for a 1.27-to-1 ratio favoring decliners.

The benchmark S&P 500 index posted 25 new 52-week highs and nine new lows; the Nasdaq Composite recorded 51 new highs and 76 new lows.

About 6.2 billion shares changed hands on U.S. exchanges, compared with the 7.1 billion daily average for the month to date.

Wall Street Ends Near Flat after Late-Day Rally

The Gilmer Free Press

U.S. stocks rebounded in afternoon trading on Wednesday to end little changed as energy shares and Apple bounced back, offsetting continued concerns about a slowdown in China.

The S&P energy index .SPNY climbed 1.9 percent, the S&P 500’s biggest positive, as investors grabbed energy companies shares, encouraged by a bounce up in oil prices from six-year lows hit the previous session. Energy companies have reeled in recent weeks on concerns about China, a top consumer of energy and commodities.

Apple (AAPL.O), for which China is a key market, also reversed course after falling more than 3 percent earlier to its lowest since January. It ended up 1.5 percent at $115.24 and was the biggest positive factor for all three major indexes.

Stocks had tumbled early in the session after China’s currency hit a four-year low, its second session of decline.

The Dow moved nearly 300 points from its low of the day to its high before closing flat.

The S&P 500 briefly dipped into negative territory for the year during the session, and traded below its 200-day moving average, before bouncing back. The S&P 500 ended above that technical support level and up for the year so far.

Among sectors, financial shares declined the most, with the S&P financial index .SPSY down 0.8 percent. China’s currency move has created more uncertainty over how soon the Federal Reserve will raise interest rates, analysts said.

The Dow Jones industrial average .DJI fell 0.33 points to 17,402.51, the S&P 500 .SPX gained 1.98 points, or 0.1 percent, to 2,086.05 and the Nasdaq Composite .IXIC added 7.60 points, or 0.15 percent, to 5,044.39.

The CBOE Volatility index .VIX, a measure of the premium traders are willing to pay for protection against a drop in the S&P 500, also reversed course. It jumped as much as 18.7 percent to 16.28, its highest in a month, before ending down 0.7 percent.

Alibaba (BABA.N) was down 5.1 percent at $73.38 after hitting an all-time low of $71.03 after revenue growth slowed at China’s biggest e-commerce company. Yahoo (YHOO.O), which has a 15 percent stake in Alibaba, fell 4.3 percent to $34.49.

Macy’s (M.N) fell 5.1 percent to $64.11 after it also reported weak quarterly sales.

After the bell, shares of Cisco Systems (CSCO.O) rose 3.7 percent. Results of the network equipment maker beat estimates as demand recovered for its switching equipment and routers.

During the session, NYSE decliners outnumbered advancers by 1.02-to-1; on the Nasdaq, 1,564 issues fell and 1,229 advanced.

The S&P 500 posted 10 new 52-week highs and 19 lows; the Nasdaq recorded 30 new highs and 120 lows. About 8.2 billion shares changed hands on U.S. exchanges, above the 7.0 billion daily average so far this month.

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