Drop in home prices has some experts pessimistic
NEW YORK — Tax credits and historically low mortgage rates have failed to lift home prices so far this year. Prices fell 0.5 percent in March from February, according to the Standard & Poor's/Case-Shiller 20-city index released yesterday.
The co-creator of the Case-Shiller index, who predicted in 2005 that the housing bubble would burst, is raising concerns that the worst may be ahead. That fear is shared by other economists who point to weak job growth, tight credit and many more foreclosures ahead.
The month-to-month drop from February to March marked the sixth straight decline. Prices in 13 of the cities fell. Only six metro areas recorded price gains. One, Boston, came in flat.
CONSUMERS GAIN CONFIDENCE IN MAY
NEW YORK — Americans are feeling better about their job prospects, pushing consumer confidence higher in May. But signs that shoppers are slowing their spending as stocks fall could pose a roadblock on the path to recovery.
Already, reports show retailers' business weakening in May after a solid spring season. Confidence's slow climb back could take a hit if the European debt crisis continues to shrink Main Street America's retirement accounts.
The Conference Board, based in New York, said yesterday that its Consumer Confidence Index rose to 63.3, up from April's revised 57.7. Economists surveyed by Thomson Reuters had expected 59.
EU CHIEF URGES ECONOMIC REFORMS
BRUSSELS — Europe's economy will stagnate unless governments make major reforms to boost growth — just as they rein in spending to curb soaring debt levels, the European Union's economy chief warned yesterday.
Low growth prospects and rocketing debt in many of the EU's 27 nations have alarmed financial markets in recent months, causing stocks to slide and the euro to fall sharply in value to a four-year low against the U.S. dollar.
EU Economy Commissioner Olli Rehn called for government action to speed up economic output, saying his forecasts show that growth will not top 1.5 percent and the jobless rate will stay close to current highs without reforms over the next five years.
MIRAMAX SALE TO BURKLE MAY BE OFF
LOS ANGELES — A person familiar with the matter says The Walt Disney Company has called off talks to sell its Miramax movie division to billionaire Ron Burkle for $625 million.
The deal would have seen the label's founders, the Weinstein brothers, regain control of the Oscar-laden catalog.
A second person familiar with the talks says Disney has now turned to another pair of brothers, Alec and Tom Gores, for a deal.
Neither person was authorized to speak publicly and both spoke on condition of anonymity.
A Disney spokesman would not comment.
TECH POSSIBILITIES TOUTED IN NEW YORK
NEW YORK — New York City Mayor Michael Bloomberg has a message for computer geeks everywhere: Forget sunny Silicon Valley and launch your company here.
Bloomberg made his pitch yesterday at a gathering of technology entrepreneurs, announcing the creation of a city-sponsored $22 million venture fund that will invest in promising tech companies with headquarters in New York.
The city's Economic Development Corporation will invest $3 million in the fund while FirstMark Capital, a New York-based venture capital fund, will provide up to $19 million more.
MICROSOFT LOSES ENTERTAINMENT EXECS
REDMOND, Wash. — Microsoft Corp. said yesterday that two key executives from the group that makes the Xbox 360 game system, Windows mobile phones and Zune media players are leaving the company.
The shakeup comes at a critical time for Microsoft's Entertainment and Devices division.
The company's phone software and Zune both lag behind those of competitors, notably Apple Inc. Microsoft just overhauled its mobile phone system and started selling a new brand of phones, called Kin, for younger users. And the company is hoping to improve Xbox sales with an upcoming video game system that understands body movements, code-named "Project Natal."
3 FED BANKS SOUGHT HIGHER LOAN RATES
WASHINGTON — Three of the Federal Reserve's 12 regional banks made a push last month to bump up the interest rate banks pay the Fed for emergency loans, according to a document released yesterday.
The regional banks were in Kansas City, St. Louis and Dallas.
They wanted to boost the discount rate to 1 percent from 0.75 percent. The rate doesn't directly affect borrowing costs for Americans.