BUSINESS BRIEFS
Mortgage rates reach lows last seen in January
Associated Press
WASHINGTON — Rates on 30-year mortgages plunged this week to the lowest level since January after the government launched a sweeping new effort to aid the U.S. housing market.
Mortgage finance giant Freddie Mac reported yesterday that average rates on 30-year fixed-rate mortgages dropped to 5.53 percent in the largest one-week drop in 27 years.
That was down from 5.97 percent last week, and the lowest since the week of Jan. 24, when it was at 5.48 percent.
Meanwhile, Federal Reserve Chairman Ben Bernanke said the government can take steps to improve the functioning of the mortgage market, which would allow more people to secure home loans and help stabilize the housing market. Currently, he said, "the mortgage market is dysfunctional."
SAFEWAY REACHES FOR MARKET SHARE
PORTLAND, Ore. — Safeway Inc. told investors yesterday that it will aggressively cut costs, lower prices and focus on improving its financial position in 2009.
"We are a very strong player in a very weak economy, and we think that creates a very strong opportunity to take (market share)," Steve Burd, the national grocery chain's chairman and chief executive officer, said during the company's annual investor meeting yesterday.
The Pleasanton, Calif.-based company, which has 19 stores in Hawai'i, said it expects to earn between $2.34 and $2.44 per share in 2009. Analysts polled by Thomson Reuters, on average, expect the company to earn $2.39.
Safeway said it expects its identical-store sales, excluding fuel, to grow between 2 percent and 3 percent.
JOBLESS CLAIMS HITS 26-YEAR HIGH
WASHINGTON — New claims for jobless benefits fell unexpectedly last week but the number of people continuing to receive government aid reached a 26-year high yesterday.
The Labor Department reported that initial claims for unemployment insurance dropped to a seasonally adjusted 509,000, from an upwardly revised figure of 530,000 for the previous week. That was significantly below analysts' estimates of 537,000, according to a survey by Thomson Reuters.
AT&T SLASHING 12,000 POSITIONS
NEW YORK — Pressured by the economic turmoil and the mounting loss of traditional phone customers, AT&T Inc. is cutting 12,000 jobs, about 4 percent of its workforce.
The Dallas-based telecommunications company, the nation's largest, said yesterday the job cuts will begin this month and run throughout 2009. The company also plans to lower its capital spending next year.
The 300,000-person company has announced layoffs several times over the past few years, including in April, when it said it would eliminate 4,600 jobs, but it has been hiring at the same time.
This is the first time since the company bought BellSouth Corp. in 2006 that it said overall staffing would decline.
DUPONT REDUCING JOBS, CONTRACTORS
DOVER, Del. — Chemical manufacturer DuPont said yesterday that it will cut 2,500 jobs and will not turn a profit in the fourth quarter as a severe slowdown in the automotive and construction markets eats away at chemical sales.
DuPont also said it will release 4,000 contractors by the end of this year, with additional contractor reductions expected in 2009.
OIL, GAS PRICES FALL AS DEMAND FALTERS
COLUMBUS, Ohio — Oil tumbled nearly 7 percent to settle below $44 a barrel yesterday and average gasoline prices slipped under $1.80 a gallon, both four-year lows.
The unprecedented decline in energy prices has provided some relief to consumers and businesses, it has occurred as the nation dips into recession.
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