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Week Ahead: FOMC and Bernanke’s Second Press Conference

by on June 17, 2011

Everyone will be watching the Federal Reserve next week, trying to read the tea leaves to determine how Fed policy makers will respond to the recent spate of lousy economic news. The Federal Open Market Committee will meet on Tuesday and Wednesday, to be followed by the release of formal announcements of Fed positions and a press conference by Chairman Ben Bernanke . Bernanke’s press conference on Wednesday afternoon will be his second and part of the Fed ’s new policy of seeking to explain its decisions to an often nonplussed American public. Bernanke’s first press conference in April was well received. No one expects any significant changes in Fed monetary policy. Interest rates will almost certainly remain at a range of 0% to 0.25%, where they’ve been for two and a half years, and there will be no expansion of the quantitative easing program scheduled to end in June. But, as has been the case for months now, investors will be closely parsing Fed language for any indication that fiscal policy could be shifting down the road. Earlier this year the thought was that the Fed would be tightening fiscal policy as the economic recovery took hold. But that sentiment has changed in the past few weeks as one economic report after another has indicated that a real recovery may be some ways off. Housing data due next week is likely to receive most of the attention in an otherwise sparse week for economic reports. A report on May sales of existing homes is due Tuesday, and one for new single-family houses on Thursday. Home sales have been at a virtual standstill for months as potential buyers sit on the sidelines waiting for prices to fall even further. The FHFA House Price Index for April is due Wednesday. Late last month, a widely watched housing index showed home values have fallen in 20 large markets. That trend isn’t expected to end any time soon. The Richmond Fed’s Survey of Manufacturing for June is due Tuesday and follows two disappointing reports from the New York and Philadelphia regions. The New York and Philadelphia reports were especially troubling because manufacturing had been one of the lone bright spots on an otherwise bleak economic landscape. In fact, the lousy manufacturing numbers out of the Northeast paired with higher inflation numbers led some to raise the specter of stagflation, a dreaded economic condition in which prices go higher but economic growth is stagnant.   An advance report on durable goods orders for May is due Friday, as is the release of the third estimate of first-quarter GDP.

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Week Ahead: FOMC and Bernanke’s Second Press Conference

Health Care REIT Completes $2.4 Billion Purchase

by on April 12, 2011

Costar…

Health Care REIT closed on the previously announced acquisition of all of Genesis HealthCare’s real estate assets on April 1st. All 147 medical and assisted living facilities located in 11 Northeast and Mid-Atlantic states were purchased for a total consideration of $2.4 billion. A leading provider of short-term, post-acute, rehabilitation, assisted living, and long-term care services, privately owned Genesis Health Care entered into a sale/leaseback…

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Health Care REIT Completes $2.4 Billion Purchase

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Health Care REIT Completes $2.4 Billion Purchase

April 12, 2011

Health Care REIT closed on the previously announced acquisition of all of Genesis HealthCare’s real estate assets on April 1st. All 147 medical and assisted living facilities located in 11 Northeast and Mid-Atlantic states were purchased for a total consideration of $2.4 billion. A leading provider of short-term, post-acute, rehabilitation, assisted living, and long-term care services, privately owned Genesis Health Care entered into a sale/leaseback…

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More Americans Signed Contracts To Buy Homes In February

March 28, 2011

WASHINGTON — More Americans signed contracts to buy homes in February, but sales were uneven across the country and not enough to signal a rebound in the housing market. Sales agreements for homes rose 2.1 percent last month to a reading of 90.8, according to the National Association of Realtors’ pending home sales index released Monday. Sales rose in every region but the Northeast. Signings were 19.6 percent above June’s index reading, the low point since the housing bust. Still, the index is below 100, which is considered a healthy level. The last time it reached that point was in April, the final month people could qualify for a home-buying tax credit. Contract signings are usually a good indicator of where the housing market is heading. That’s because there’s usually a one- to two-month lag between a sales contract and a completed deal. But the Realtors group also noted “a measurable level of contract cancellations” that also occurred in February. Many buyers canceled after appraisals showed the properties were valued much lower than their initial bids. A sale is not final until a mortgage is closed. “Therefore, the latest pickup in pending home sales and mortgage applications might not necessarily end up in a measurable pickup in mortgage closings and translate into an increase in existing home sales,” said Yelena Shulyatyeva, an analyst at BNP Paribas. The pace of sales varied from region to region. Signings fell 10.9 percent in the Northeast. They rose 2.7 percent in the South, 4 percent in Midwest and 7 percent in the West. High unemployment, strict lending standards, and a record number of foreclosures are deterring would-be buyers, who fear home prices haven’t reached the bottom. Sales of previously owned homes fell last year to the lowest level in 13 years. Economists say it will be years before the housing market fully recovers. The rise in foreclosures has pushed the median price of previously occupied homes to its lowest point in nearly 9 years. New-home sales have fared even worse. Americans are on track to buy fewer new homes than in any year since the government began keeping data almost a half-century ago. Sales are now just half the pace of 1963 – even though there are 120 million more people in the United States now.

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Andrew Reinbach: Fracking Tide Turns — Frackers Get Mean

March 28, 2011

The PR tide seems to be turning against fracking, and predictably, the political rhetoric from the gas industry and its allies is turning nasty. In upstate New York, for instance, Richard Downey, director of a local landowner’s coalition that hopes to lease its land to drillers, recently published an opinion piece in the Oneonta Daily Star playing the class warfare card — claiming pro-drillers are good, truck-driving local folk, while the antis are Volvo-driving, brie-eating NIMBY elitists against anything ruining the view from their estate. Downey himself is a retired New York City teacher, and while his rhetoric seems less than measured, it’s typical of the posture displayed in letters to the editor columns across the state, many of which read like pieces in right-wing blogs — vitriolic, largely fact-free, and wrapped in the flag, A recent editorial in The New York Post , for instance, did everything but claim anti-frackers are led by former Weatherman Bill Ayers, calling anti-frackers “Hard-core lefties and environmental groups” that include the Working Familes Party and MoveOn.org. This characterization of the anti-frackers isn’t even true; in New York’s Marcellus Shale region, for instance, the anti-fracking forces include local families farming the same land since the Revolution. The same is becoming true in states as far apart as Pennsylvania, Arkansas, and Wyoming, where concerns about the effect of hydro-fracking upon ground water supplies are getting more pronounced everyday — together with lawsuits over the same. But the rhetoric is a good indication of how defensive the frackers have become, as a rising tide of media stories about the dangers of fracking to the environment appear alongside reports of serious environmental accidents, and local governments banning fracking within their precincts. Pittsburgh, for instance, passed an anti-fracking ordinance last November. Since then, local townships across upstate New York have done the same — recently joined by Ontario, Canada. And last May in Flower Mound, Texas, no-fracking candidates swept a recent municipal election. In fact, the tide of public opinion is visibly turning against hydro-fracking — and not just in the Marcellus Shale region that begins in northern Alabama and ends near Utica, New York. Generally speaking, early industry assertions that hydro-fracking is perfectly safe have collapsed under a flood of facts about the procedure, leaving deep suspicions about the industry’s intentions and reliability. Enter a Philadelphia PR firm, Gregory/FCA, which charted the turning tide in a recent article it published in its blog, displaying data that made it clear that public opinion is turning against fracking. “Since the beginning of 2010, the positive sentiment in traditional media for Marcellus Shale has fallen dramatically, from a high of +3.1 to a low of -0.3 in January 2011,” wrote Gregory Matusky, the company president, in the report. Matusky follows up that polling data — he says he analyzed millions of media reports to come up with the downward trend — with what amounts to a memo on how to counter media reports like the one from Moundsville, West Virginia that the municipal water supply temporarily ran dry because local gas drillers withdrew so much water from it. Matusky’s main heads: • Publish an ocean of information about the Marcellus Shale. Matusky, who says he has no energy company clients, claims that the Marcellus Shale gas play is generally a good thing, but that the anti-fracking forces “…aren’t under the same time constraint as gainfully employed Americans [and] have…idle time to plant falsehoods, raise suspicions, and demonize the oil and gas industry.” • Never respond to the supposed negatives. Constantly focus the conversations on how domestic reserves of clean energy of natural gas that will reduce our nation’s carbon footprint, says Matusky. • Make it about people. “The people of Marcellus Shale are fierce, noble individuals who have been ignored for generations. The industry needs to…make their stories of economic renewal a mainstay of the storytelling.” How? “The industry should underwrite a [reality] show,” he says. • Dominate the online discussion. “The industry needs to dominate online conversations as a way to positively impact consumers, regulators, influencers, and ironically, the traditional media….” • Connect the dots for the public [about the benefits of natural gas]. • Language is important. Find a better term than fracking, says Matusky; “The very term “fracking” has a negative connotation. Much of what Matusky recommends is already finding its way into the public realm — Downey’s op-ed piece being only one example. Missing from Matusky’s analysis? Whether allowing hydro-fracking in the Northeast is a good business deal. People fighting to keep gas drilling out of their backyards like to point out, for instance, that the West and Midwest are running out of fresh water, and will eventually lead people and industry back to where it is — the Northeast. These people then say that looked at this way, swapping the region’s plentiful supplies of clean water for the money gas drilling will bring is, to all intents, trading its birthright for a mess of pottage. Whether notching up the rhetoric will save the gas industry’s bacon is uncertain at best. Pennsylvania and West Virginia may have already made their deal with the industry, but New York hasn’t, and aside from signs that new regulations covering fracking may be delayed almost indefinitely, two recent bills were introduced in the state legislature that would keep the fracking wolf from the door for some time: Assembly Bill A06541 proposes a 5-year moratorium on hydro-fracking, and Senate Bill S4220 would ban it altogether. Also muddying the water for the energy industry: The Environmental Protection Agency, under fire for having exempted fracking from the Clean Water Act in 2004, is conducting a wide-ranging analysis of all the environmental impacts of hydro-fracking and isn’t expected to issue a report for several years. The newly installed Commissioner of New York’s Department of Environmental Conservation, Joseph Martens, has made conflicting statements that, when parsed, suggest little may be approved in New York until the EPA issues its own regulations. Delay, though, may not turn out to be the best outcome, since it gives the energy industry plenty of time to follow Matusky’s advice and slap some new reality show on the airwaves. Maybe it’ll be called Gas Driller Angels.

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New Home Sales Plunge To Record Low In February

March 23, 2011

WASHINGTON — Sales of new homes plunged in February to the slowest pace on records dating back nearly half a century, a dismal sign for an already-weak housing market. New-home sales fell 16.9 percent last month to a seasonally adjusted annual rate of 250,000 homes, the Commerce Department said Wednesday. It’s the third straight monthly decline and far below the 700,000-a-year pace that economists view as healthy. New-home sales now account for just 5 percent of total home sales so far this year. They typically represent closer to 15 percent in healthier housing markets. There were just 186,000 new homes available for sale in February, the lowest inventory in more than four decades. The median price of a new home dropped nearly 14 percent to $202,100, the lowest since December 2003. The median is now 30 percent higher than the median price of resold homes – twice the typical markup. In response, homebuilders are cutting their selling prices and building more inexpensive homes, pushing down sales prices. They are struggling to compete with a wave of foreclosures, which has lowered the price of previously occupied homes. High unemployment, tight credit and uncertainty over prices have also kept many potential buyers from making purchases. “Falling housing prices of existing homes are robbing demand for new houses and until that changes, the housing market will be in trouble,” said Yelena Shulyatyeva, an analyst at BNP Paribas. Last year was the fifth straight year of declines for new-home sales after they reached record highs during the housing boom. Economists say it could take years before sales return to a healthy pace. Poor sales of new homes mean fewer jobs in the construction industry, which normally powers economic recoveries. Each new home creates an average of three jobs for a year and $90,000 in taxes, according to the National Association of Home Builders. Many builders are waiting for new-home sales to pick up and for the glut of foreclosures to be reduced. But with 3 million foreclosures forecast this year nationwide, a turnaround isn’t expected for at least three years. “We fully expect further price declines in order to help clear inventory from the market although this problem is more acute in the existing home market than the new home market,” said Dan Greenhaus, chief economic strategist for Miller Tabak + Co. Homebuilders have taken notice. Residential construction has all but halted. Builders broke ground last month on the fewest homes in nearly two years. And building permits, a gauge of future construction, sank to their lowest in more than 50 years. By contrast, sales of previously occupied homes have fallen by a more modest 3 percent in the past year. Prices have dropped more than 5 percent. In February, the median price for a resale was $156,100, according to the National Association of Realtors. New-home sales fell to record lows last month in almost every region of the country. Sales dropped 57.1 percent in the Northeast, 27.5 percent in the Midwest, 14.7 percent in the West and 6.3 percent in the South. Those are record lows in each region except the West, which recorded its lowest sales pace in October. Harsh winter weather that dumped record amounts of snowfall over much of the Northeast and Midwest, along with rare snowstorms in Texas, had an impact on February sales. Given the pace of new-home sales, it would take nearly 9 months to clear them off the market. Economists say a six-month supply of homes is healthy.

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Major Cap-And-Trade Program Boosted State Economies

March 1, 2011

If cap-and-trade is truly dead , the Regional Greenhouse Gas Initiative (RGGI) is desperately fighting to resuscitate it. RGGI was formed by ten states in the Northeast and Mid-Atlantic, focused on reducing CO2 emissions through cap-and-trade programs. RGGI reported this week that state programs have already seen many economic and environmental benefits. States are expected to sell emission allowances through auctions, and invest their proceeds in consumer benefits. Participating states are reportedly investing, on average, 80 percent of their CO2 allowance proceeds to consumer benefit and energy programs. The report’s findings are based on a two-year analysis of program investments, specifically focused on energy efficiency, renewable energy, bill payment assistance, and additional programs. Overall the report finds that state investments have created jobs, reduced energy costs, and generated high economic returns. The states have taken different approaches to achieve their communal goal of reducing CO2 emissions from the power sector 10 percent, by 2018. For example, in Connecticut, while most proceeds from CO2 allowances are going towards expanding programs focused on efficient and renewable energy, a small portion of their proceeds are aimed at additional climate programs. Nearly 70 percent of their investments are focused on energy efficiency, with 23 percent for renewable energy, and seven percent for other programs and administration. The Energy Conservation Management Board (ECMB) runs energy efficiency programs in Connecticut. The ECMB consists of 14 members who advise the state’s three electric distribution companies on programs that are both cost-effective and energy efficient. Programs are focused on public outreach, process improvement, and workforce development. Reports show that between 2008 and 2009, these CT programs produced $3 to $4 for every $1 invested. Nearly 2,700 jobs are directly attributed to energy efficiency, with an average employment income of $50,000 per year. ECMB’s energy efficient programs also reportedly benefit low-income consumers — through auditing, weatherization, and retrofitting programs, consumers saw an estimated $6 million dollars in annual energy savings. Regarding renewable energy programs in CT, the Connecticut Clean Energy Fund (CCEF) is focused on promoting clean energy sources. Last year, 14 schools and seven town buildings approved projects to install solar PV systems with CO2 allowance proceeds. RGGI estimates that these systems will produce nearly 1,500 megawatt-hours of electricity annually. Connecticut also has a Small Business Energy Advantage Program (SBEA) focused on enabling small business owners to reduce their energy budgets. 1,900 businesses received assessments and upgrades in 2010, which saved participants over $5.8 million annually. According to RGGI, the upgrades also prevented nearly 18,000 tons of CO2 emissions per year. The report offers the following story : Chick’s Drive-In, a landmark restaurant in West Haven, Connecticut, was just one of nearly 1,900 small businesses to benefit from SBEA in 2010. Through SBEA, the restaurant received financial incentives for the purchase and installation of more efficient lighting and refrigeration equipment. As a result, the owner Joseph “Chick” Celentano is now saving hundreds of dollars on his electricity bill each month. The eatery will save 468,000 kilowatt-hours of electricity–the equivalent of planting 56 acres of trees or saving more than 17,000 gallons of gas–over the lifetime of the new equipment. But not everyone paints as rosy a picture as RGGI. Reports found that states such as New York and New Jersey aimed to divert green energy funds toward saving their budgets. The Sierra Club’s Jeff Tittel remarks on the raid, “Unfortunately, once government discovers a new source of money, it’s like a potato chip: They keep going back for more.” Just yesterday, a Fox News headline gleefully gloated, “One Giant Leap Forward – New Hampshire Smacks Down Cap-And-Trade.” The op-ed highlighted New Hampshire’s House of Representatives newly passed vote to repeal RGGI, with House Speaker William O’Brian claiming, “The Regional Greenhouse Gas Initiative has always been a backdoor tax increase on the citizens of New Hampshire. RGGI is a perfect example of the cost of regulation to the public. Rarely has a program been as transparent in its attempts at income redistribution.” It seems that New Hampshire’s House of Representatives may reflect U.S. Republican House sentiments overall. While 10 states may be participating in cap-and-trade initiatives, recent election results make it highly unlikely that a federal cap-and-trade program will be implemented in the near future. Overall, while many consider the recent RGGI report a success story, skeptics remain dubious. Only time will tell if the programs can sustain themselves and inspire other states to follow suit.

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KBS REIT II Acquires $90M Industrial Portfolio

February 17, 2011

KBS Real Estate Investment Trust II (KBS REIT II) has acquired a four-building industrial portfolio of commercial properties located throughout Pittston, Hazleton, and Jessup, PA for $90 million, or about $55 per square foot. The portfolio consists of 1.6 million square feet of class A industrial space in the Northeast Pennsylvania industrial market located along the highly traveled Interstate 81 corridor. The four buildings are fully leased to…

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DATA SNAP: US Jan Housing Starts Jump 14.6%

February 16, 2011

========================================================== U.S. Housing Starts Jan Dec ! Consensus: ! Total Starts: +14.6% -5.1%r ! +0.2% ! Single-Family: -1.0% -8.4%r ! Actual: ! ! +14.6% ! ========================================================== By Alan Zibel and Andrew Ackerman WASHINGTON -( Dow Jones )- Home construction in the U.S. rose to the highest level since September last month, an indication of life in the battered sector. Construction of homes and apartments rose 14.6% from a month earlier to a seasonally adjusted annual rate of 596,000 from a downwardly revised 520,000 in December, the Commerce Department said Wednesday. New building permits, a gauge of future construction, fell 10.4% to an annual rate of 562,000. A month earlier, permits had posted a 15.3% monthly gain as builders sought approval before building codes changed in Pennsylvania, California and New York state. Economists surveyed by Dow Jones Newswires expected housing starts would rise 0.2% to an annual rate of 530,000 in January. Permits had been projected to plunge to a rate of 545,000. The month’s results were driven by a 77.7% gain in multifamily construction, a volatile part of the market. Single-family homes, which made up about 70% of all starts, fell by 1.0% from a month earlier. Compared with the same month a year earlier, overall new-home construction was down 2.6% Home construction remains low due to weak demand from buyers. While some people are buying houses, many of those are foreclosures and other previously owned homes rather than new ones. Even as the housing market struggles, the U.S. economy has been picking up. Gross domestic product increased by 3.2% in the October to December quarter of 2010, after rising 2.6% in the third quarter. As foreclosures continue to pour onto the market, meanwhile, the U.S. homeownership rate has been falling. In the fourth quarter of 2010, 66.5% of Americans owned homes, down from 67.2% a year earlier and the lowest rate since the end of 1998, according to the Census Bureau. New-home sales were down 7.6% in December from a year earlier, the latest government data showed. Aside from low demand, builders have also had problems getting financing to start projects. New-home construction last year peaked in April, but then fell sharply with the expiration of tax incentives for first-time purchases. Housing starts in December fell 5.1% from a month earlier, revised from an originally reported 4.3% monthly decrease. The Commerce Department data showed that regionally, housing starts in January increased 41.8% from a month earlier in the Northeast, 36.4% in the Midwest and 15.8% in the South. Construction fell 9.7% in the West. Actual housing starts, without seasonal adjustments, rose to 38,200 in January from a downwardly revised 33,700 in December. Lumber and commodities markets watch those numbers closely to gauge demand. The Commerce report can be found at http://www.census.gov/const/newresconst.pdf -By Alan Zibel, Dow Jones Newswires; 202 862 9263; alan.zibel@dowjones.com (MORE TO FOLLOW) Dow Jones Newswires Copyright

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Explosion Occurs at Northeast China Oil Refinery

January 19, 2011

Explosion Occurs at Northeast China Oil Refinery

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Retail Watch: Nor’easter Challenging SuperValu

January 19, 2011

Facing identical store sales of a negative 4.9% in its third quarter, grocery store owner operator SuperValu Inc. is planning to cut costs including layoffs and closures and/or the sale of some of its store brands in the Northeast U.S. As a group, SuperValu’s Northeast banners pulled down corporate-wide store sales by more than 150 basis points in the third quarter, Craig Herkert, the company’s president and CEO, reported in his company’s third…

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Retail Watch: Nor’easter Challenging SuperValu

January 19, 2011

Facing identical store sales of a negative 4.9% in its third quarter, grocery store owner operator SuperValu Inc. is planning to cut costs including layoffs and closures and/or the sale of some of its store brands in the Northeast U.S. As a group, SuperValu’s Northeast banners pulled down corporate-wide store sales by more than 150 basis points in the third quarter, Craig Herkert, the company’s president and CEO, reported in his company’s third…

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Storms Delay $1B In Retail Spending

December 29, 2010

ATLANTA — The blizzard that swept through the Northeast on Sunday and Monday delayed $1 billion in retail spending, according to research firm ShopperTrak, but won’t derail a holiday shopping season expected to be the best since 2007. The effect won’t be as bad as last year’s pre-Christmas snowstorm that similarly paralyzed parts of the East Coast. That cost retailers an estimated $2 billion, according to weather research firm Planalytics. About $10 billion in retail sales usually occurs Dec. 26-27, ShopperTrak says. Bad weather likely delayed about 10 percent of that. The storm’s effects weren’t enough to change ShopperTrak’s estimate for a 4 percent gain over last year in revenue for the Nov. 1-Dec. 31 holiday season. Retailers will still see much of the spending when shoppers return to stores as streets are cleared and transportation restored. This year’s storm cost retailers 11.2 percent of their foot traffic Sunday and 13.9 percent Monday, ShopperTrak estimates. The fact that the day after Christmas fell on a Sunday this year might have hurt sales a bit even where it didn’t snow, ShopperTrak founder Bill Martin said, because of local laws that limit or ban Sunday hours in some places. Dec. 26 will rank 10th-busiest day of the holiday shopping season, the firm estimates. Last year, it was second-busiest behind Black Friday. Black Friday was again the busiest shopping day this year, with $10.69 billion in sales. Coming in second was Dec. 23, as last-minute shoppers picked up $7.86 billion in gifts and other items and gave retailers a strong finish. Strong sales the week ending Dec. 31, which accounts for about 15 percent of total holiday spending, could make this year the best holiday season ever. Earlier this week, MasterCard Advisors SpendingPulse, another research firm, said consumer spending excluding autos rose 5.5 percent to $584.3 billion from Nov. 5 through Dec. 24, compared with the same period a year ago. SpendingPulse tracks all forms of spending, including cash. The total beat the 2007 record of $566.3 billion for the period, though adjusted for inflation, it is slightly below the record.

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ENSERVCO Appoints Northeast Regional Manager With 25-Year Background in Marcellus Shale Region

August 30, 2010

COLORADO SPRINGS, CO–(Marketwire – August 30, 2010) –  ENSERVCO Corporation ( OTCBB : ASPN ), a provider of well-site services to the domestic onshore oil and gas industry, today announced it has hired Peter Broge as Northeast Regional Manager. Broge’s background in the energy services industry includes 25 years of management and operational experience in the Appalachian Basin’s Marcellus Shale, where ENSERVCO is focused on expanding its customer base and service territory.

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Taptopia Rolls Out National Sales Plan to Capitalize on $80B Industry

July 29, 2010

Retains Vice President of Sales for the Northeast Region

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New Home Sales: June Was The Second-Weakest Month On Record

July 26, 2010

WASHINGTON — Sales of new homes jumped last month, but it was the second-weakest month on record. The lackluster economy has made potential buyers skittish about shopping for homes. New home sales rose nearly 24 percent in June from a month earlier to a seasonally adjusted annual sales pace of 330,000, the Commerce Department said Monday. May’s number was revised downward to a rate of 267,000, the slowest pace on records dating back to 1963. Sales for April and March were also revised downward. High unemployment, slow job growth, and tight credit have kept people from buying homes. The industry received a boost this spring when the government offered tax credits to homebuyers. But since they expired in April, the number of people looking to buy has dropped, even with the lowest mortgage rates in decades available. “There’s no question that this is a weak number, but it seems to be more stable,” said Stuart Hoffman, chief economist at PNC Financial Services Group. “The bottom line to all of this is that we need more jobs.” Sales are down 72 percent from their peak annual rate of 1.39 million in July 2005. More than 600,000 new homes were sold annually from 1983 through 2007. After the housing bubble popped, sales plunged to 375,000 last year. That was the weakest yearly total on records dating back to 1963. New home sales made up about 7 percent of the housing market last year. That’s down from about 15 percent before the bust. Weak sales mean fewer jobs in the construction industry, which normally power economic recoveries. Each new home built creates, on average, the equivalent of three jobs for a year and generates about $90,000 in taxes paid to local and federal authorities, according to the National Association of Home Builders. The impact is felt across multiple industries. Builders have sharply scaled back construction in the face of a severe housing market bust. The number of new homes up for sale in June fell 1.4 percent from a month earlier to 210,000, the lowest level in nearly 42 years. Due to the sluggish sales pace, it would take eight months to exhaust that supply. That’s above a healthy level of about six months. The median sales price in June was $213,400. That was down 0.6 percent from a year earlier and down 1.4 percent from May. New home sales rose by 46 percent in the Northeast, 33 percent in the South and 21 percent in the Midwest. The West posted a decline of nearly 7 percent. “One month doesn’t make a trend and the roadblocks to a healthy housing market are high, the most important one being the still-high jobless rate,” wrote BMO Capital Markets economist Jennifer Lee in a note to clients. “But with borrowing costs at record lows, prices also remaining low, those with jobs who can afford a home may be enticed.” (This version CORRECTS month in which new homes up for sale declined.)

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Video: Tom King Says He’s `Confident’ Grid Can Handle Heat Wave: Video

July 7, 2010

July 7 (Bloomberg) — Tom King, president of National Grid U.S., discusses the performance of the electricity transmission network and consumer demand during the Northeast heat wave. King talks on Bloomberg Television’s “InBusiness with Margaret Brennan.” (Source: Bloomberg)

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U.S. Economy: Home Sales, Durables Point to Strength

May 26, 2010

By Bob Willis and Courtney Schlisserman May 26 (Bloomberg) — Purchases of new homes jumped in April to a two-year high and orders for durable goods climbed the most in three months, signaling the U.S. economy strengthened before the crisis of confidence in the European Union. New-home sales increased 15 percent to an annual pace of 504,000 last month, the highest level since May 2008, while bookings for goods meant to last at least three years rose 2.9 percent, the Commerce Department said today in Washington. The reports indicated the world’s largest economy may withstand a slowdown in Europe. While corporate investment will help sustain the U.S. manufacturing resurgence, the housing market may require faster job growth after the expiration of the government’s homebuyer tax credit. “The recovery has made a successful transition into a self-sustaining economic expansion,” said Mark Zandi , chief economist at Moody’s Economy.com in West Chester, Pennsylvania. “The economy has enough momentum, strength to digest reasonably gracefully what is going on in Europe.” Stocks fell as reports China may consider reducing investment in European government bonds spurred concern the debt crisis will worsen. The Standard & Poor’s 500 Index dropped 0.6 percent to close at 1,067.95. The 10-year Treasury note declined, pushing the yield up to 3.18 percent at 4:20 p.m. in New York from 3.16 percent late yesterday. Purchases of new homes jumped as buyers rushed to qualify for the government tax incentive. To receive the credit of as much as $8,000, contracts had to be signed by the end of April, meaning demand will probably wane in coming months. Transactions must close by June 30. Mortgage Applications Another report today from the Mortgage Bankers Association showed sales slowing this month. The Washington-based group’s index of home-purchase applications fell for the third straight week, to the lowest level since 1997. Economists forecast new-home sales would rise to a 425,000 annual rate in April, according to the median of 75 projections in a Bloomberg News survey. Estimates ranged from 370,000 to 450,000. The March sales pace was revised up to 439,000 from a previously reported 411,000. The surge in purchases helped draw down inventory. The supply of homes at the current sales rate dropped to 5 months’ worth, the lowest level since December 2005, from 6.2 months in March. There were 211,000 new houses on the market at the end of April, the fewest since 1968. Median Price The median price of a new home decreased to $198,400, the lowest level since December 2003. The jump in sales was concentrated in houses costing less than $300,000, perhaps reflecting demand from first-time buyers. Home sales increased in three of four U.S. regions last month, led by a 32 percent jump in the Midwest. Purchases in the Northeast were little changed. The Commerce Department’s report on durable goods orders showed bookings excluding transportation equipment unexpectedly fell 1 percent last month, coming off a revised 4.8 percent March jump that was the biggest in almost five years. Economists forecast total goods orders would rise 1.3 percent after no change in March, according to the median of 77 projections in a Bloomberg survey. Estimates ranged from a drop of 1 percent to a gain of 6.4 percent. Commercial aircraft orders, which are volatile, climbed 228 percent after dropping 71 percent in March. Bookings for non- defense capital goods excluding aircraft, a proxy for future business investment, decreased 2.4 percent in April after jumping 6.5 percent the prior month. Over the past three months, these orders climbed at a 22 percent annual pace, up from 15 percent in March, signaling companies are planning to invest in their plants. Effect on Growth Shipments of those items, used in calculating gross domestic product, increased 0.2 percent after increasing 2.3 percent in March. General Electric Co. Chief Executive Officer Jeffrey Immelt said May 24 that Europe’s debt troubles can be fixed and they’re not enough to slow a global economic recovery. “In Europe, I think this is going to be solvable; it’s going to mean slow growth,” for the region, Immelt said after his commencement address at Boston College. “I don’t think it’s enough to slow the recovery, I really don’t.” He also said the U.S. economy is “very good and improving.” To contact the reporters on this story: Bob Willis in Washington at bwillis@bloomberg.net ; Courtney Schlisserman in Washington at cschlisserma@bloomberg.net

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Home Sales, Durable Orders Signal U.S. Economy May Withstand Europe Crisis

May 26, 2010

By Bob Willis and Courtney Schlisserman May 26 (Bloomberg) — Purchases of new homes jumped in April to a two-year high and orders for durable goods climbed the most in three months, signaling the U.S. economy strengthened before the European debt crisis gathered force. New-home sales increased 15 percent to an annual pace of 504,000 last month, the highest level since May 2008, while bookings for goods meant to last at least three years rose 2.9 percent, the Commerce Department said today in Washington. Stocks extended gains and Treasuries fell as the reports indicated the world’s largest economy may withstand a slowdown in Europe. While corporate investment will help sustain the U.S. manufacturing resurgence, the housing market may require faster job growth after the expiration of the government’s homebuyer tax credit. “The recovery has made a successful transition into a self-sustaining economic expansion,” said Mark Zandi , chief economist at Moody’s Economy.com in West Chester, Pennsylvania. “The economy has enough momentum, strength to digest reasonably gracefully what is going on in Europe.” The Standard & Poor’s 500 Index increased 0.7 percent to 1,081.87 at 11:40 a.m. in New York. The 10-year Treasury note declined, pushing the yield up to 3.22 percent from 3.16 percent late yesterday. Purchases of new homes jumped as buyers rushed to qualify for the government tax incentive. To receive the credit of as much as $8,000, contracts had to be signed by the end of April, meaning demand will probably wane in coming months. Transactions must close by June 30. Mortgage Applications Another report today from the Mortgage Bankers Association showed sales slowing this month. The Washington-based group’s index of home-purchase applications fell for the third straight week, to the lowest level since 1997. Economists forecast new-home sales would rise to a 425,000 annual rate in April, according to the median of 75 projections in a Bloomberg News survey. Estimates ranged from 370,000 to 450,000. The March sales pace was revised up to 439,000 from a previously reported 411,000. The surge in purchases helped draw down inventory. The supply of homes at the current sales rate dropped to 5 months’ worth, the lowest level since December 2005, from 6.2 months in March. There were 211,000 new houses on the market at the end of April, the fewest since 1968. Median Price The median price of a new home decreased to $198,400, the lowest level since December 2003. The jump in sales was concentrated in houses costing less than $300,000, perhaps reflecting demand from first-time buyers. Home sales increased in three of four U.S. regions last month, led by a 32 percent jump in the Midwest. Purchases in the Northeast were little changed. The Commerce Department’s report on durable goods orders showed bookings excluding transportation equipment unexpectedly fell 1 percent last month, coming off a revised 4.8 percent March jump that was the biggest in almost five years. Economists forecast total goods orders would rise 1.3 percent after no change in March, according to the median of 77 projections in a Bloomberg survey. Estimates ranged from a drop of 1 percent to a gain of 6.4 percent. Commercial aircraft orders, which are volatile, climbed 228 percent after dropping 71 percent in March. Bookings for non- defense capital goods excluding aircraft, a proxy for future business investment, decreased 2.4 percent in April after jumping 6.5 percent the prior month. Over the past three months, these orders climbed at a 22 percent annual pace, up from 15 percent in March, signaling companies are planning to invest in their plants. Effect on Growth Shipments of those items, used in calculating gross domestic product, increased 0.2 percent after increasing 2.3 percent in March. General Electric Co. Chief Executive Officer Jeffrey Immelt said May 24 that Europe’s debt troubles can be fixed and they’re not enough to slow a global economic recovery. “In Europe, I think this is going to be solvable; it’s going to mean slow growth,” for the region, Immelt said after his commencement address at Boston College. “I don’t think it’s enough to slow the recovery, I really don’t.” He also said the U.S. economy is “very good and improving.” To contact the reporters on this story: Bob Willis in Washington at bwillis@bloomberg.net ; Courtney Schlisserman in Washington at cschlisserma@bloomberg.net

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Great American Group(R)* Hires Paul Brown as a Vice President of Wholesale & Industrial Services

April 14, 2010

WOODLAND HILLS, CA–(Marketwire – April 14, 2010) –  Great American Group, Inc. ( OTCBB : GAMR ), a leading provider of asset disposition, valuation and appraisal services, today announced the appointment of Paul Brown as Vice President managing the Northeast for its Wholesale & Industrial Division.

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Campbell’s Soup Loses Out to Nestle’s Pizza, Kraft’s Macaroni and Cheese

April 5, 2010

By Matthew Boyle April 5 (Bloomberg) — Frozen pizza, microwave dinners and macaroni and cheese are eating into Campbell Soup Co. ’s U.S. sales. Discounting by Campbell, the biggest U.S. soup maker, failed to lift sales in the past month, said Alexia Howard , an analyst at Sanford C. Bernstein & Co. in New York. Campbell lost market share in the four weeks ended March 20 as its soup sales dropped 4.2 percent, according to data that market researcher Nielsen Co. released to clients last week. “The historical trend of canned soup doing well in difficult times did not play out in this recession,” Howard said in a telephone interview. “It’s a little bit unfathomable. Price-based competition from other ‘simple meals’ categories may have had an impact.” More consumers are buying competing products from Nestle SA , ConAgra Foods Inc. and Kraft Foods Inc. as sales in the $5 billion U.S. soup industry fall, according to data from the companies and research firms. The most recent decline exacerbates market-share losses over more than two decades. The share of at-home lunch meals with soup fell to 12 percent from 14.4 percent from 1985 to 2009, and dinners with soup shrank to 5.6 percent from 6.5 percent, according to market researcher NPD Group. In the same period, the percentage of meals with pizza, macaroni and cheese or a frozen entrée rose, NPD said. “Soup seems to be losing share as a category to any number of meal alternatives including frozen meals, mac and cheese, even something as simple as a sandwich that the consumer makes at home,” Cynthia Axelrod , an analyst at Glenmede Trust Co. in Philadelphia. Glenmede Trust manages $18 billion and owned 122,361 Campbell shares as of Dec. 31, according to data compiled by Bloomberg. ‘Hiccup’ Drop Campbell Chief Executive Officer Doug Conant , 58, called last quarter’s 18 percent drop in ready-to-serve soup sales a “hiccup,” blaming a lack of promotion at retailers and Campbell’s failure to fully take into account the competition from other simple meals. Conant said on a Feb. 22 conference call that soup sales would rebound this quarter, helped by marketing plans. Those actions have led to a “strongly improved trend” in the ready-to-serve business, Anthony Sanzio , a Campbell spokesman, said last week. Soup sales by volume increased in the four weeks ended March 20, he said. “We remain optimistic about our entire soup business,” Sanzio said. Soup Discounts Last month, food retailers including Albertsons, a unit of Supervalu Inc. , offered two cans of Campbell’s Chunky soup for $3, which is 50 cents more than a typical price for one can. Price Chopper Supermarkets, a chain of stores in the Northeast, was selling Chunky cans for $1, according to its Web site. Those discounts may offset the benefits Campbell gains from productivity improvements and lower ingredient costs, according to Eric Serotta , an analyst at Consumer Edge Research in Stamford, Connecticut. “Clearly, that’s going to have an impact on their margins,” he said. He recommends selling the shares. Campbell’s gross margin, the fraction of sales left after subtracting the cost of goods sold, widened to 40.5 percent in the second quarter ended Jan. 31 from 39.4 percent a year earlier. On Feb. 22, Campbell reiterated that full-year earnings would rise as much as 11 percent from $2.21 a share. Share Prices Campbell, based in Camden, New Jersey, gained 4 cents to $35.60 at 10:56 a.m. in New York Stock Exchange composite trading . Omaha, Nebraska-based ConAgra declined 1 cent to $25.22, and Kraft Foods, based in Northfield, Illinois, fell 4 cents to $30.30. Nestle, based in Vevey, Switzerland, dropped 20 centimes to 53.80 Swiss francs in Zurich trading on April 1, the last day the shares traded. Soup represents about 80 percent of Campbell’s $3.8 billion U.S. soup, sauces, and beverages unit, according to Andrew Lazar , an analyst at Barclays Capital. That division, which makes Chunky and Select Harvest ready-to-serve soups and condensed soups such as tomato and cream of mushroom, accounts for half of total sales. Eating into Campbell’s sales are frozen-pizza brands such as DiGiorno, according to Bernstein’s Howard . She rates the shares “outperform,” based on productivity improvements and lower ingredient costs that have widened gross margin. DiGiorno Pizza DiGiorno frozen pizza, which Kraft sold to Nestle this year, posted a 25 percent gain in sales in the 52 weeks ending Feb. 21, according to market researcher SymphonyIRI of Chicago. Kraft’s Macaroni and Cheese dry mixes rose 8.5 percent, according to SymphonyIRI. The data excludes Wal-Mart Stores Inc. sales. Sales of Marie Callender’s frozen meals, made by ConAgra, advanced 12 percent during that period, Teresa Paulsen , a company spokeswoman, said in an e-mail. Consumers don’t consider soup a replacement for the restaurant meals they are forgoing to save money, according to consumer-trend analyst Candace Corlett , president of consulting firm WSL Strategic Retail in New York, which surveys Americans on their shopping patterns and habits. When they go out, they eat dishes such as pasta, hamburgers, and french fries, she said in a telephone interview. “When soup sales slip in this kind of a winter, it isn’t a hiccup, it’s more like a seizure,” said Ryan Mathews, a consumer-trend analyst at Black Monk Consulting in Eastpointe, Michigan. To contact the reporter on this story: Matthew Boyle at Mboyle20@bloomberg.net .

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Massachusetts, Rhode Island Declare Rain Emergencies

March 30, 2010

By Aaron Clark March 30 (Bloomberg) — Massachusetts and Rhode Island declared emergencies and Boston recorded unprecedented rainfall as storms pounded the U.S. Northeast for a second day today. Massachusetts Governor Deval Patrick mobilized about 1,000 National Guard troops because of the threat of “beach erosion, major flooding and widespread road closures,” according to a statement on his Web site yesterday. “In some cases there has been two months of rain in the matter of a few days,” Tom Kines , a senior meteorologist for AccuWeather Inc., said in a telephone interview. “When you get that much rain over a few-day period, that spells trouble.” Boston’s Charles River is set to break the record crest of 9.24 feet reached in August 1955 after two hurricanes dumped more than 26 inches of rain on the region in less than two weeks, according to the National Weather Service. In Rhode Island, where officials warned of “historic flooding,” Governor Donald Carcieri urged residents to leave work early and head home, said a spokeswoman, Amy Kempe. As much as 8 inches of rain is expected in parts of Rhode Island before the three-day storm ends tomorrow, with the Pawtuxet and Blackstone basins hardest-hit, said the state’s Emergency Management Agency. Boston’s Logan Airport set a single-day record for rain after 1.96 inches fell yesterday, breaking the high of 1.85 inches set in 1984. Storm Upon Storm Flooding in the Northeast from two storms earlier this month caused more than $10 million in damage, drove residents from their homes as power failed and sewer systems backed up, and washed out a section of the Massachusetts Bay Transit Authority’s Green Line light rail service. An AccuWeather meteorologist, Jesse Ferrell, posted a radar loop showing, by his count, 22 storms hitting the Northeast since the official start of the winter season Dec. 1, with almost double the average amount of moisture. “The rain is still coming down very heavily and it has caused major street flooding, major street closures, throughout” Rhode Island, said Kempe. “The governor is recommending that individuals consider leaving work early to head home.” Mandatory evacuations are under way in the state, although Kempe said she did not know how many. State officials are monitoring Interstate 95, which runs from Maine to Florida, and will close it if necessary, she said. Rivers Rise The Pawtuxet River in Cranston, Rhode Island, set a flooding record of 15.07 feet at 9:45 a.m. and is expected to reach 17.5 feet by tomorrow, according to the weather service. The weather service projects the Charles River at Dover, Massachusetts, will reach 9.9 feet on April 1. The 1955 storms and flooding killed at least 180 people and caused more than $650 million in damage, including the complete or partial failures of more than 200 dams in southern New England, according to the National Weather Service. Both Boston and Providence, Rhode Island, have set records this month for the wettest March in history, AccuWeather said. An additional 1.06 inches had fallen at Logan Airport as of 10 a.m. today, according to the National Weather Service . March 2010 is already the fourth wettest-month in Boston history and may become the second-wettest. New York City had received a monthly total of 10.16 inches by early today, heading toward the March record of 10.54 inches set in 1983. About 150 people have evacuated their homes in the Fall River area in southeast Massachusetts because of flooding, said Peter Judge , a spokesman for the state’s Emergency Management Agency . Record flooding is forecast on the Sudbury and Assabet rivers, he said. “Every river in central and eastern Massachusetts is expected to be at well-above flood stage before this storm is over,” Judge said. To contact the reporter on this story: Aaron Clark in New York at aclark27@bloomberg.net

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Massachusetts, Rhode Island Declare Emergencies as Rain Pounds Northeast

March 30, 2010

By Aaron Clark March 30 (Bloomberg) — Massachusetts and Rhode Island declared emergencies and Boston recorded unprecedented rainfall as storms pounded the U.S. Northeast for a second day today. Massachusetts Governor Deval Patrick mobilized about 1,000 National Guard troops because of the threat of “beach erosion, major flooding and widespread road closures,” according to a statement on his Web site yesterday. “In some cases there has been two months of rain in the matter of a few days,” Tom Kines , a senior meteorologist for AccuWeather Inc., said in a telephone interview. “When you get that much rain over a few-day period, that spells trouble.” Boston’s Charles River is set to break the record crest of 9.24 feet reached in August 1955 after two hurricanes dumped more than 26 inches of rain on the region in less than two weeks, according to the National Weather Service. In Rhode Island, where officials warned of “historic flooding,” Governor Donald Carcieri urged residents to leave work early and head home, said a spokeswoman, Amy Kempe. As much as 8 inches of rain is expected in parts of Rhode Island before the three-day storm ends tomorrow, with the Pawtuxet and Blackstone basins hardest-hit, said the state’s Emergency Management Agency. Boston’s Logan Airport set a single-day record for rain after 1.96 inches fell yesterday, breaking the high of 1.85 inches set in 1984. Storm Upon Storm Flooding in the Northeast from two storms earlier this month caused more than $10 million in damage, drove residents from their homes as power failed and sewer systems backed up, and washed out a section of the Massachusetts Bay Transit Authority’s Green Line light rail service. An AccuWeather meteorologist, Jesse Ferrell, posted a radar loop showing, by his count, 22 storms hitting the Northeast since the official start of the winter season Dec. 1, with almost double the average amount of moisture. “The rain is still coming down very heavily and it has caused major street flooding, major street closures, throughout” Rhode Island, said Kempe. “The governor is recommending that individuals consider leaving work early to head home.” Mandatory evacuations are under way in the state, although Kempe said she did not know how many. State officials are monitoring Interstate 95, which runs from Maine to Florida, and will close it if necessary, she said. Rivers Rise The Pawtuxet River in Cranston, Rhode Island, set a flooding record of 15.07 feet at 9:45 a.m. and is expected to reach 17.5 feet by tomorrow, according to the weather service. The weather service projects the Charles River at Dover, Massachusetts, will reach 9.9 feet on April 1. The 1955 storms and flooding killed at least 180 people and caused more than $650 million in damage, including the complete or partial failures of more than 200 dams in southern New England, according to the National Weather Service. Both Boston and Providence, Rhode Island, have set records this month for the wettest March in history, AccuWeather said. An additional 1.06 inches had fallen at Logan Airport as of 10 a.m. today, according to the National Weather Service . March 2010 is already the fourth wettest-month in Boston history and may become the second-wettest. New York City had received a monthly total of 10.16 inches by early today, heading toward the March record of 10.54 inches set in 1983. About 150 people have evacuated their homes in the Fall River area in southeast Massachusetts because of flooding, said Peter Judge , a spokesman for the state’s Emergency Management Agency . Record flooding is forecast on the Sudbury and Assabet rivers, he said. “Every river in central and eastern Massachusetts is expected to be at well-above flood stage before this storm is over,” Judge said. To contact the reporter on this story: Aaron Clark in New York at aclark27@bloomberg.net

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Massachusetts Declares Emergency as Rain Pounds Northeast for Second Day

March 30, 2010

By Aaron Clark March 30 (Bloomberg) — Massachusetts declared a state of emergency and Rhode Island warned of “historic flooding” as rainfall pounded the U.S. Northeast again today. Massachusetts Governor Deval Patrick planned to mobilize as many as 1,000 National Guard troops as rainfall was forecast to cause “beach erosion, major flooding, and widespread road closures,” according to a statement yesterday. As much as 8 inches of rain is expected in parts of Rhode Island before the three-day storm ends tomorrow, with the Pawtuxet and Blackstone basins hardest-hit, according to a statement from the state’s Emergency Management Agency. “When you get that much rain over a few-day period, that spells trouble,” Tom Kines , a senior meteorologist for AccuWeather Inc., said in a telephone interview. “In some cases there has been two months of rain in the matter of a few days.” Flooding in the Northeast from two storms earlier this month caused more than $10 million in damage, drove residents from their homes as power failed and sewer systems backed up, and washed out a section of the Massachusetts Bay Transit Authority’s Green Line light rail service. “Significant river and small stream flooding is likely. Urban and basement flooding are also significant threats,” according to a National Weather Service bulletin . “Residents should take action to protect property.” The Pawtuxet River in Cranston, Rhode Island, which set a flooding record of 14.98 feet March 15, is expected to reach a new record of 17.5 feet by tomorrow, according to the weather service. The river was at 14.79 feet at 8:45 a.m. Both Boston and Providence, Rhode Island, have set records this month for the wettest March in history, AccuWeather said. New York City had received a monthly total of 9.25 inches as of 9 a.m., heading toward the March record of 10.54 set in 1983. An AccuWeather meteorologist, Jesse Ferrell, posted a radar loop showing, by his count, 22 storms hitting the Northeast since the official start of the winter season Dec. 1, with almost double the average amount of moisture. To contact the reporter on this story: Aaron Clark in New York at aclark27@bloomberg.net

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Durable Orders Climb, Home Sales Fall as Manufacturing Leads U.S. Recovery

March 24, 2010

By Shobhana Chandra and Bob Willis March 24 (Bloomberg) — Orders for durable goods rose in February for a third month and new-home sales fell to the lowest on record, indicating manufacturing will stay at the forefront of the economic recovery. The 0.5 percent increase in bookings for long-lasting goods followed a 3.9 percent surge the prior month, the Commerce Department said today in Washington. Excluding transportation equipment, orders advanced more than anticipated. Sales of new homes fell 2.2 percent to an annual pace of 308,000 in February, the Commerce Department reported. Companies from Boeing Co. to Owens-Illinois Inc. are benefiting from business spending on new equipment, inventory restocking and a revival of global demand . Job creation is needed for a broadening of the expansion that would include sustained gains in consumer spending and a mending of the real- estate market. “Manufacturing is in the lead in pulling the economy along,” said Stuart Hoffman , chief economist at PNC Financial Services Group Inc. in Pittsburgh. “If we get some job gains, which we think we will soon, there will be a pickup in home sales. We can’t bake a sustainable recovery until we get job growth.” Stocks declined on concern government deficits will hamper a global recovery after Fitch Ratings cut Portugal’s credit rating. The Standard & Poor’s 500 Index fell 0.4 percent to 1,169 at 11:55 a.m. in New York. The 10-year Treasury note dropped, pushing up the yield to 3.77 percent from 3.69 percent late yesterday. Blizzards, Foreclosures Blizzards, unemployment and foreclosures combined to produce the fewest sales of houses last month since record- keeping began in 1963. Treasury Secretary Timothy F. Geithner yesterday said it would take a “long time” to repair the housing market. Sales were projected to climb to a 315,000 annual rate in February, according to the median estimate in a Bloomberg News survey. Demand dropped in the Northeast, Midwest and South regions, likely due in part to winter storms. The supply of homes at the current sales rate increased to 9.2 months’ worth , the highest since May, from 8.9 months. The median price of a new home in the U.S. increased 5.2 percent to $220,500 in February from a year earlier. The advance was the largest since September 2007. Housing, the industry that triggered the worst recession in seven decades as the subprime mortgage market collapsed, showed signs of recovering in 2009 as an $8,000 first-time buyer tax credit boosted sales ahead of its originally scheduled expiration in November. Economy’s Bright Spot While housing has faltered in the last three months, manufacturing remains a bright spot for the recovery, and factories added workers to payrolls in January and February. Orders for durable goods excluding transportation equipment increased 0.9 percent after a 0.6 percent decline in January. Economists anticipated a 0.6 percent rise, according to the median of 45 economists in a Bloomberg survey. Overall bookings were forecast to rise 0.6 percent. Last month’s gain was paced by a surge in aircraft orders and increasing demand for machinery and metals. Boeing, the world’s second-biggest commercial-plane maker, said it received 47 orders in February, up from 10 a month earlier. Chicago-based Boeing last week said it will boost production in coming years to meet stronger demand as airlines rebound from the recession-induced travel slump. Business Equipment Bookings for non-defense capital goods excluding aircraft, a proxy for future business investment, increased 1.1 percent after dropping 3.9 percent the prior month. Shipments of those items, used in calculating gross domestic product, climbed 0.8 percent after a 1.9 percent decrease. Factories boosted durable-goods inventories by 0.3 percent, the biggest gain since December 2008. In a sign demand is starting to outstrip available resources, unfilled orders advanced 0.4 percent, the most since July 2008. Growing sales in the U.S. and abroad, and the need to replenish inventories are also helping companies such as Owens- Illinois, the largest U.S. maker of glass containers for food and beverages. “We are starting to see the beginnings of a recovery, which we anticipate will extend through 2010 and 2011,” Chief Executive Officer Al Stroucken said in a presentation to investors on March 18. Stroucken said he expects “volumes to recover due to destocking having run its course.” To contact the report on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net ; Bob Willis in Washington at bwillis@bloomberg.net

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Durable Orders Climb, Home Sales Fall as Manufacturing Leads U.S. Recovery

March 24, 2010

By Shobhana Chandra and Bob Willis March 24 (Bloomberg) — Orders for durable goods rose in February for a third month and new-home sales fell to the lowest on record, indicating manufacturing will stay at the forefront of the economic recovery. The 0.5 percent increase in bookings for long-lasting goods followed a 3.9 percent surge the prior month, the Commerce Department said today in Washington. Excluding transportation equipment, orders advanced more than anticipated. Sales of new homes fell 2.2 percent to an annual pace of 308,000 in February, the Commerce Department reported. Companies from Boeing Co. to Owens-Illinois Inc. are benefiting from business spending on new equipment, inventory restocking and a revival of global demand . Job creation is needed for a broadening of the expansion that would include sustained gains in consumer spending and a mending of the real- estate market. “Manufacturing is in the lead in pulling the economy along,” said Stuart Hoffman , chief economist at PNC Financial Services Group Inc. in Pittsburgh. “If we get some job gains, which we think we will soon, there will be a pickup in home sales. We can’t bake a sustainable recovery until we get job growth.” Stocks declined on concern government deficits will hamper a global recovery after Fitch Ratings cut Portugal’s credit rating. The Standard & Poor’s 500 Index fell 0.4 percent to 1,169 at 11:55 a.m. in New York. The 10-year Treasury note dropped, pushing up the yield to 3.77 percent from 3.69 percent late yesterday. Blizzards, Foreclosures Blizzards, unemployment and foreclosures combined to produce the fewest sales of houses last month since record- keeping began in 1963. Treasury Secretary Timothy F. Geithner yesterday said it would take a “long time” to repair the housing market. Sales were projected to climb to a 315,000 annual rate in February, according to the median estimate in a Bloomberg News survey. Demand dropped in the Northeast, Midwest and South regions, likely due in part to winter storms. The supply of homes at the current sales rate increased to 9.2 months’ worth , the highest since May, from 8.9 months. The median price of a new home in the U.S. increased 5.2 percent to $220,500 in February from a year earlier. The advance was the largest since September 2007. Housing, the industry that triggered the worst recession in seven decades as the subprime mortgage market collapsed, showed signs of recovering in 2009 as an $8,000 first-time buyer tax credit boosted sales ahead of its originally scheduled expiration in November. Economy’s Bright Spot While housing has faltered in the last three months, manufacturing remains a bright spot for the recovery, and factories added workers to payrolls in January and February. Orders for durable goods excluding transportation equipment increased 0.9 percent after a 0.6 percent decline in January. Economists anticipated a 0.6 percent rise, according to the median of 45 economists in a Bloomberg survey. Overall bookings were forecast to rise 0.6 percent. Last month’s gain was paced by a surge in aircraft orders and increasing demand for machinery and metals. Boeing, the world’s second-biggest commercial-plane maker, said it received 47 orders in February, up from 10 a month earlier. Chicago-based Boeing last week said it will boost production in coming years to meet stronger demand as airlines rebound from the recession-induced travel slump. Business Equipment Bookings for non-defense capital goods excluding aircraft, a proxy for future business investment, increased 1.1 percent after dropping 3.9 percent the prior month. Shipments of those items, used in calculating gross domestic product, climbed 0.8 percent after a 1.9 percent decrease. Factories boosted durable-goods inventories by 0.3 percent, the biggest gain since December 2008. In a sign demand is starting to outstrip available resources, unfilled orders advanced 0.4 percent, the most since July 2008. Growing sales in the U.S. and abroad, and the need to replenish inventories are also helping companies such as Owens- Illinois, the largest U.S. maker of glass containers for food and beverages. “We are starting to see the beginnings of a recovery, which we anticipate will extend through 2010 and 2011,” Chief Executive Officer Al Stroucken said in a presentation to investors on March 18. Stroucken said he expects “volumes to recover due to destocking having run its course.” To contact the report on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net ; Bob Willis in Washington at bwillis@bloomberg.net

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Stiglitz Says Fed `Misjudged,’ Stimulus Withdrawal Risks Hurting Housing

March 16, 2010

By Toru Fujioka March 17 (Bloomberg) — The Federal Reserve’s decision to let its mortgage-debt purchase programs end this month risks driving up home-loan rates and worsening the housing crisis, Nobel laureate Joseph Stiglitz said. “The withdrawal of the support risks increasing the interest rate, increasing the number of foreclosures and exacerbating the strain, the stress, that American families are already facing,” Stiglitz said in an interview in Tokyo. He said officials “misjudged things,” and predicted foreclosures and bank failures this year will exceed the 2009 and 2008 totals. Stiglitz said the main dangers for the global economy are that central banks will “exit too rapidly” from measures adopted during the crisis, propelled in part by an “irrational” fear among some investors that inflation will soar. The liquidity created by central banks battling the recession isn’t likely to fuel consumer prices because of subdued consumer demand, he said. The warning by the former chairman of the White House Council of Economic Advisers is a contrast with the steps being taken by the Fed and its counterparts to rein in monetary stimulus to prevent a buildup of new imbalances that could destabilize the economy. In Asia, central banks are moving toward raising interest rates to prevent asset-price bubbles. While Asia’s economies are growing faster than those in other regions, Asia cannot make up for the shortfall in U.S. demand, Stiglitz said. It’s unlikely the global economy will return to “robust” growth anytime soon, he said. Growth Outlook While “double-dip” recessions tend to be rare, there is a “significant” risk of a slowdown in global growth, he said. The U.S. economy is likely to see growth “weakening” toward the end of the year, said Stiglitz, 67, who is also former chief economist of the World Bank. “The deeper risks I see for the global economy are continuing weakness in the American economy,” said Stiglitz, who shared the Nobel Memorial Prize for Economics in 2001 with George Akerlof and Andrew Michael Spence for their “analyses of markets with asymmetric information,” according to the Nobel Foundation. Fed Chairman Ben S. Bernanke and his colleagues yesterday confirmed that their program to buy $1.43 trillion of mortgage- related debt will be completed by the end of March. The Fed’s Open Market Committee also kept its benchmark rate target unchanged at a range of zero to 0.25 percent and said it will remain “exceptionally low” for an “extended period.” Fighting Foreclosures “We have done nothing” to fight foreclosures, Stiglitz said today. He also said that the commercial mortgage market may deteriorate this year. A record number of Americans were in danger of losing their homes in the fourth quarter, even as new delinquencies declined, the Mortgage Bankers Association said last month. Loans in foreclosure rose to 4.58 percent of all mortgages, while those more than 90 days overdue — the point at which lenders usually begin the process of seizing a property — climbed to 5.09 percent, the Washington-based trade group said Feb. 19. Yesterday, Fed officials added language to their statement saying “ housing starts have been flat at a depressed level.” A Commerce Department report showed housing starts fell 5.9 percent in February, in part because of winter storms in the Northeast and South. To contact the reporter on this story: Toru Fujioka in Tokyo at tfujioka1@bloomberg.net

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Housing Starts in U.S. Fall as Fewer Permits Signal Rebound to Take Longer

March 16, 2010

By Shobhana Chandra March 16 (Bloomberg) — Housing starts fell in February as record snowfall in parts of the U.S. hampered construction, while fewer building permits signaled the recovery in real estate will take longer to unfold. Builders broke ground on 575,000 homes at an annual rate, down 5.9 percent from 611,000 in January, Commerce Department figures showed today in Washington. February starts reflected declines in the Northeast and South, which experienced winter storms. Prices of goods imported into the U.S. fell more than anticipated in February, another report showed. Homebuilders may be cautious about taking on new projects as mounting foreclosures add to inventory and the Federal Reserve prepares to end mortgage-backed security purchases. A lack of job growth that could invigorate housing and few signs of inflation will give Fed policy makers meeting today room to keep interest rates near zero. “Some of the numbers reflect the severe snowstorms, but apart from the weather, there’s no evidence of a pickup in activity,” Michael Feroli , an economist at JPMorgan Chase & Co. in New York, said about the real estate market. “If we see the job market pick up, it’ll eventually feed through to housing.” Stocks climbed after Standard & Poor’s affirmed Greece’s credit rating. The S&P 500 gained 0.5 percent to 1,156.62 at 11:43 a.m. in New York. Some economists said the housing market will be able to weather the removal of the stimulus programs once the economy begins to create jobs and banks ease up on credit. Homes have also become more affordable . Homebuilders’ Shares Homebuilders’ shares reflect the optimism. The S&P Supercomposite Homebuilding Index , which includes Pulte Homes Inc. and Lennar Corp., has increased about 15 percent so far this year. The Labor Department reported that its import price index fell 0.3 percent, the first decline in seven months, pointing to few signs of inflation from abroad. Economists forecast a 0.2 percent drop, according to the median estimate in a Bloomberg survey. Fed policy makers will leave the benchmark lending rate unchanged at zero to 0.25 percent, where it’s been since December 2008, according to all 90 economists in a Bloomberg survey. They’re also likely to stick to their timetable of completing their plan to purchase $1.25 trillion in mortgage- backed securities at the end of this month that helped reduce borrowing costs. The Fed’s purchases were part of a U.S. government effort aimed at reviving the housing market. Tax Credit President Barack Obama in November extended a tax credit of as much as $8,000 for first-time homebuyers, and expanded it to some current owners. The extension covers closings through June as long as contracts are signed by the end of April. Obama administration officials said companies won’t hire enough workers this year to lower joblessness much below the 9.7 percent rate reached in February. The percent of Americans who can’t find work is likely to “remain elevated for an extended period,” Treasury Secretary Timothy F. Geithner , White House budget director Peter Orszag and Christina Romer , chairman of the Council of Economic Advisers, said in a joint statement. Housing starts were projected to fall to 570,000 after a previously reported 591,000 in January, according to the median forecast of 71 economists surveyed by Bloomberg. Estimates ranged from 510,000 to 610,000. Permits Drop Building permits , a sign of future construction, decreased 1.6 percent to a 612,000 annual rate after a 4.7 percent drop in January. Permits were forecast to decrease to a 601,000 annual pace, according to the survey median. Construction of single-family houses dropped 0.6 percent to a 499,000 rate in February. Work on multifamily homes , such as townhouses and apartment buildings, slumped 30 percent to the lowest level in four months. The decrease in starts was led by a 16 percent decline in the South and a 9.6 percent drop in the Northeast. Starts rose 11 percent in the Midwest and 7.9 percent in the West. Executives at Hovnanian Enterprises Inc. , New Jersey’s largest homebuilder, are among those watching if demand will hold up after government incentives fades. The Red Bank, New Jersey-based company this month reported its first quarterly profit since 2006. “With the tax credit for first time and repeat buyers expiring at the end of the second quarter, we too are interested to see if the positive momentum that we established can be sustained,” Chief Executive Officer Ara Hovnanian said on a conference call with investors on March 3. “We’re keeping a close eye on this as we head into the summer months.” To contact the reporter on this story: Shobhana Chandra in Washington schandra1@bloomberg.net

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Housing Starts in U.S. Declined by 5.9% Amid February Snow; Permits Eased

March 16, 2010

By Shobhana Chandra March 16 (Bloomberg) — Housing starts in the U.S. fell in February as record snowfall in parts of the country hampered construction, while fewer building permits signaled demand is stagnating. Builders broke ground on 575,000 homes at an annual rate last month, down 5.9 percent from January’s revised 611,000 pace that was higher than initially estimated, Commerce Department figures showed today in Washington. February starts reflected declines in the Northeast and South and compared with a median estimate of 570,000 in a Bloomberg News survey of economists. Mounting foreclosures are making it harder to clear inventories, keeping pressure on prices and discouraging new construction. The economy has yet to create the sustained job growth that could invigorate housing demand and is one reason Federal Reserve policy makers will probably keep interest rates near zero after their meeting today. The report “definitely reflects the severe weather effect,” said Ellen Zentner , senior U.S. macroeconomist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “Housing has now got enough support that it has stabilized. With or without support, the housing recovery will be slow going.” Starts on dwellings were projected to fall after a previously reported 591,000 in January, according to the median forecast of 71 economists surveyed by Bloomberg. Estimates ranged from 510,000 to 610,000. Import Prices Decline A separate report showed prices of goods imported into the U.S. declined more than anticipated, pointing to few signs of inflation pressure from abroad. The import price index fell 0.3 percent, the first decline in seven months, Labor Department figures showed today. Economists forecast a 0.2 percent drop, according to the median estimate in a Bloomberg survey. Companies may be reluctant to raise prices as the world’s largest economy climbs out of the worst recession since the 1930s. Unemployment and tame inflation are among reasons Fed policy makers are expected to hold the benchmark rate on overnight loans between banks between zero and 0.25 percent today, according to the forecast of all 90 economists surveyed. Stocks were little changed as investors waited for the Fed’s decision, due at about 2:15 p.m. in Washington. The Standard & Poor’s 500 Index rose 0.2 percent to 1,153.2 at 10:30 a.m. in New York. The 10-year Treasury note rose, pushing up the yield to down to 3.67 percent from 3.70 percent late yesterday. Permits Decrease Building permits , a sign of future construction, decreased 1.6 percent to a 612,000 annual rate after a 4.7 percent drop in January. Permits were forecast to decrease to a 601,000 annual pace, according to the survey median. Construction of single-family houses dropped 0.6 percent to a 499,000 rate in February. Work on multifamily homes, such as townhouses and apartment buildings, slumped 30 percent to an annual rate of 76,000, the lowest in four months. The decrease in starts was led by a 16 percent decline in the South and a 9.6 percent drop in the Northeast. Starts rose 11 percent in the Midwest and 7.9 percent in the West. The report bolsters the view of some economists that the weather played a bigger role in depressing employment last month. The economy lost 64,000 construction jobs in February, according to figures from the Labor Department released earlier this month. Overall employment fell by 36,000 workers, a smaller decline than anticipated, leading to speculation that the labor market is stabilizing. The number of homes under construction in February declined 2.2 percent to a record-low 492,000, today’s report showed. Builder Confidence A report yesterday showed builder confidence unexpectedly declined in March as prospective-buyer traffic fell to a one- year low. The National Association of Home Builders/Wells Fargo’s index of builder confidence dropped for the third time in four months. Fed policy makers will leave the benchmark lending rate unchanged at zero to 0.25 percent, where it’s been since December 2008, according to the median forecast in a Bloomberg survey. They’re also likely to stick to their timetable of completing their plan to purchase $1.25 trillion in mortgage- backed securities at the end of this month that was part of an effort to reduce borrowing costs and revive the housing market. President Barack Obama in November extended a tax credit of as much as $8,000 for first-time homebuyers, and expanded it to some current owners. The extension covers closings through June as long as contracts are signed by the end of April. Bigger gains in housing sales ultimately require a pickup in job creation. Unemployment may end the year at 9.5 percent, according to a Bloomberg monthly survey. Hovnanian on Credit Executives at Hovnanian Enterprises Inc. , New Jersey’s largest homebuilder, are among those watching if demand will hold up after the incentive fades. The Red Bank, New Jersey- based company this month reported its first quarterly profit since 2006. “With the tax credit for first time and repeat buyers expiring at the end of the second quarter, we too are interested to see if the positive momentum that we established can be sustained,” Chief Executive Officer Ara Hovnanian said on a conference call with investors on March 3. “We’re keeping a close eye on this as we head into the summer months.” To contact the reporter on this story: Shobhana Chandra in Washington schandra1@bloomberg.net

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New York City Storm Breaks 114-Year-Old Snowfall Record for Central Park

February 26, 2010

By Brian K. Sullivan Feb. 26 (Bloomberg) — A winter storm that pummeled New York City for two days broke a monthly record for snowfall in Central Park that stood for 114 years, according to the National Weather Service. The storm killed at least three people, knocked out power to more than 700,000 electrical customers across the U.S. Northeast, grounded at least 3,844 flights from regional airports and disrupted shipping as far away as Maine. As the city digs out, forecasters are already watching another storm that may hit the U.S. East Coast next week. “It’s pretty significant for our area to see this kind of snowfall,” said Jeffrey Tongue, a weather service meteorologist in Upton, New York . “This is stuff that doesn’t happen too often, maybe a couple of times a century.” Manhattan’s Central Park had received 36.9 inches (93.7 centimeters) as of about 5 p.m. today, the most ever for a single month, the weather service said. The previous record for February was 27.9 inches in 1934, and the mark for a single month was 30.5 inches in March 1896. Almost 21 inches blanketed the city during the storm, which began yesterday at about 8 a.m. The record for a single snowstorm was set Feb. 11-12, 2006, when 26.9 inches fell. Storm Warning Canceled With the storm winding down and moving east, the weather service dropped a winter storm warning and replaced it with an advisory at about 4:30 p.m. Tongue said the advisory was in place to warn drivers that roads may be slick tonight, and wasn’t a caution that more snow was on the way. A few snow showers may linger overnight, he said. At its peak, the storm was powerful enough to set daily records for both rain and snowfall in Newark, New Jersey, and blast a 90-mph wind gust past a weather service buoy in the Atlantic. Its central barometric pressure rivaled that of hurricanes. Heating oil gained on speculation stockpiles would fall as winter storms boosted demand. Heating oil for March delivery added 3.87 cents, or 1.9 percent, to settle at $2.0249 a gallon on the New York Mercantile Exchange. U.S. demand for heating oil through March 5 will be 6 percent above normal for the period, according to David Salmon , a meteorologist at Weather Derivatives, which forecasts temperature changes and the impact on demand for commodities. Flights Grounded At Newark Liberty International, a hub for Continental Airlines Inc., 65 percent of today’s 607 scheduled commercial and freight flights were canceled, according to FlightStats.com, which tracks airline and airport performance. At LaGuardia, 61 percent of the 577 scheduled departures were scrubbed, and John F. Kennedy International reported 39 percent of its 579 flights canceled. Major U.S. carriers scrubbed 2,344 flights today, mostly across the northeast. Delta Air Lines Inc ., the world’s largest carrier, trimmed 500 flights, said Susan Elliott , a spokeswoman. The Atlanta-based airline doesn’t anticipate more cancellations this weekend, “although there will be some delays,” she said. Continental grounded 500 flights, including all 200 of its regional jet flights at Newark, said Mary Clark , a spokeswoman. Demand for jet fuel, averaged over the four weeks ended Feb. 19, was down 1.9 percent from a year earlier, according to the Energy Department. “The storm just kills jet fuel demand,” said Andy Lipow , president of Lipow Oil Associates LLC in Houston. “When an airline cancels its flights, it’s not like it doubles up the next day.” Week’s Second Storm The system was the second winter storm of the week for the U.S. Northeast. It came just weeks after parts of the mid- Atlantic region set seasonal records for snowfall. A Brooklyn man was killed in Central Park by a falling tree branch, while two people died in car accidents on slick roads near Lebanon and Victor, New York. New York City’s public schools shut down. Utilities in the Northeast reported a total of more than 700,000 homes and businesses without power this morning. New York-based Consolidated Edison Inc. had as many as 40,000 customers lose power in Westchester County, and about 500 in Manhattan, Brooklyn, Queens, Staten Island and the Bronx, said a spokesman, Chris Olert . New Hampshire was especially hard-hit, and Governor John Lynch declared a state of emergency. About 330,000 residents lost power because of the storm and accompanying high winds, said Katya Brennan, a spokeswoman for the state Department of Safety. Deliveries Delayed Crude oil tanker deliveries to a Portland, Maine, pipeline that supplies two Montreal-area refineries were delayed a second day because of unsafe swells and high winds. A storm expected to hit the West Coast tonight may be the Northeast’s next big problem, said Tom Kines , a senior expert meteorologist with AccuWeather Inc. Some forecast models keep the storm fairly far south, although Kines said he isn’t sure that will happen. “I don’t trust it,” he said. “If this storm we are seeing now is getting out of the way, it will allow this next storm to move farther north. We are getting into the time of year where rain is more favored, but in this weather pattern anything goes.” To contact the reporter on this story: Brian K. Sullivan in Boston at bsullivan10@bloomberg.net ;

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New York City May Get 18 Inches of Snow as Wind Brings Blizzard Conditions

February 26, 2010

By Brian K. Sullivan and Alex Morales Feb. 26 (Bloomberg) — New York City closed all public schools as the U.S. National Weather Service extended its winter storm warning for the metropolitan area until 6 a.m. tomorrow, saying the city faced “near-blizzard” conditions. The storm, which began about 8 a.m. yesterday, is forecast to leave 18 inches (46 centimeters) or more as it lashes the largest U.S. city with winds up to 35 mph (56 kph). By 6 a.m., 16.9 inches had fallen in Central Park, the agency said. “An intense storm will drift from Connecticut southwestward into the New York City metropolitan area today,” the service said. Snow, wind and ice “will make travel very hazardous or impossible.” Airlines including Continental Airlines Inc. canceled hundreds of flights after snow began falling yesterday. Speculation that the snows would reduce demand for motor fuel contributed to a drop in gasoline futures. All New York City public schools will close today because of the snow, the city’s Department of Education said on its Web site . AccuWeather Inc. warned of downed trees and power lines and said winds may cause whiteouts in some areas. A man was killed by a falling tree branch in New York’s Central Park, WNBC reported. “This will be a heavy wet snow and will be more difficult than usual to shovel, possibly causing back, shoulder and wrist injuries, and even heart attacks if not handled properly,” the weather service said. Second Storm The current system is the second winter storm of the week for the U.S. Northeast. It came just weeks after parts of the mid-Atlantic region set seasonal records for snowfall. Gasoline for March delivery declined 6.17 cents, or 2.9 percent, to settle yesterday at $2.037 a gallon on the New York Mercantile Exchange. “Demand numbers are going to be annihilated by the bad weather,” said Ray Carbone , president of Paramount Options Inc. in New York and a trader at the Nymex. New York’s Metropolitan Transportation Authority said on its Web site that all subways, buses, railroads, bridges and tunnels will operate a “normal or near-normal morning rush hour,” except for the Metro-North Railroad, which will run a special service , with 5-to-10 minute delays possible. More than 1,500 flights were halted across the Northeast yesterday, most of them in New York, Boston and Philadelphia. That represented about 3 percent of the 50,000 flights scheduled in the U.S. this time of year, according to FlightStats.com , a Web site that tracks aircraft movements. Flights Canceled Continental canceled flights including all 200 of its regional partner airlines from Newark’s Liberty International Airport, said Mary Clark , a spokeswoman for the carrier. Amtrak canceled eight trains on its Empire Service line in upstate New York yesterday. Some service between New York City and Albany-Rensselaer was temporarily reduced. CSX Corp., which owns the line, repairs tracks and systems damaged by trees, said Tracy Connell , a spokeswoman for the passenger railway. CSX, the third-largest U.S. railroad by revenue, said its customers should expect delays during “the worst of the storm” and that its effects will linger through the weekend. The lines are used by shippers including coal producers. Two crude oil tankers put off unloading in Portland, Maine, at least until today, said Tony Youells, port manager for Inchcape Shipping Services , a shipping agent. Waves as high as 25 feet are forecast in the waters off Maine according to the National Weather Sevice. ‘Battering Waves’ “Large battering waves will cause a prolonged period of beach erosion with periods of significant splash-over and possible coastal flooding near the times of high tide,” the service’s office in Gray, Maine, said in an advisory. Winter storm warnings, meaning heavy snow, ice and freezing rain are imminent, were issued from Maryland to Maine. Blizzard warnings stretched from the mountains of North Carolina into West Virginia. Warnings for gusts as high as 65 miles per hour were posted for parts of North Carolina, Virginia, Vermont, Maryland and the District of Columbia. About 75,000 customers in New York and New England were already without power as the storm moved through the Northeast, according to utilities. A system brought rain to New York City and almost two feet of snow to western Massachusetts starting Feb. 23, disrupting air traffic in Newark, Boston, Baltimore and New York. To contact the reporters on this story: Brian K. Sullivan in Boston at bsullivan10@bloomberg.net ; Alex Morales in London at amorales2@bloomberg.net

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New York City May Get Up to 13 Inches of Snow, Making Travel `Hazardous’

February 25, 2010

By Brian K. Sullivan and Alex Morales Feb. 25 (Bloomberg) — New York City may receive more than a foot of snow in a storm that’s forecast to hit in rush hour, disrupting travel, the National Weather Service said. The service issued a winter storm warning that starts at 6 a.m. and runs through 6 p.m. tomorrow, and forecast as much as 13 inches (33 centimeters) of snow. “Snow is expected to develop around the start of rush hour Thursday morning then continue through Friday,” the National Weather Service said in a statement on its Web site. “This will make travel very hazardous or impossible.” Continental Airlines Inc. and Delta Air Lines Inc. canceled some of their flights into the area, while Amtrak canceled some trains. It was raining at about 5 a.m. in New York City. “Expect the steadiest and heaviest snow to fall from mid- morning Thursday through Thursday evening,” the weather service said. “Snow may mix with rain for brief periods of time on Thursday. If no mixing-in occurs, amounts will be up towards the higher end of the range, if not more.” Winter storm warnings, meaning heavy snow, ice and freezing rain are imminent, were issued for a swath of the Northeast, including parts of Maine, Vermont, New Hampshire, New York, Pennsylvania, New Jersey and Maryland. In Washington, snow was forecast before 10 a.m., and winds may gust as high as 37 miles (60 kilometers) an hour, the weather service said. The Washington-Baltimore corridor may receive as much as five inches of snow in the storm, according to Brandon Peloquin, a weather service meteorologist in Sterling, Virginia . Flights Canceled The system is the latest from an El Nino-driven weather pattern that has pushed moist air across the southern U.S., where it has mixed with colder air coming down from the Arctic, Matt Rogers , president of Commodity Weather Group in Bethesda, Maryland, said. The result has been record snows from Washington to Philadelphia. El Nino is a warming of the Pacific Ocean that occurs every two to five years and lasts about 12 months. Continental , the fourth-largest U.S. carrier, canceled all flights today from Newark Liberty International Airport by regional partners including Continental Express and Pinnacle Airlines Corp.’s Colgan unit, said Mary Clark , a spokeswoman for the Houston-based carrier. The cancellations involve “several hundred” flights, Clark said. She didn’t have a more specific number. Delta , the world’s largest carrier, canceled 65 flights in the New York area for today, said Susan Elliott , a spokeswoman for the Atlanta-based company. UAL Corp. ’s United Airlines scrapped 70 flights yesterday because of weather and was considering plans for today, Sarah Massier, a spokeswoman, said. The three airlines issued travel waivers allowing passengers to re-schedule their plans for free, according to statements on their Web sites. Canceled Trains Amtrak canceled eight trains on its Empire Service lines in the upstate New York area, said a spokeswoman, Karina Romero . In northern New Jersey , as much as 18 inches of snow may fall, the weather service said. Parts of Maine, Connecticut, Massachusetts, New York, New Hampshire and Rhode Island were issued with flood watches, with as much as 3 inches of rain forecast. Today’s will be from the second storm to hit the area this week. A system brought rain to New York City and almost two feet of snow to western Massachusetts starting Feb. 23, disrupting air traffic in Newark, Boston, Baltimore and New York. “The Northeast is being impacted by one storm now, and the monster storm is going to impact the region tomorrow into Friday,” Eric Wilhelm of private forecaster AccuWeather.com . said yesterday. “A really complex situation is developing in the Northeast.” Power Failures Likely On the Massachusetts coast, sustained winds of 30 mph are expected, with gusts as intense as 50 mph, according to a weather service high wind watch issued for the area. “There could be real problems with power outages,” Wilhelm said. “That could be the real legacy of this storm.” More than 50,000 customers in the Albany area and western Massachusetts were left without power by the storm that moving north through New England yesterday, according to utilities. High winds may also create wind-chill problems that will boost energy consumption, Rogers said. Temperatures in the region are expected to be in the 30s Fahrenheit, while the wind will make it feel colder. Demand for heating oil may be 8 percent higher than normal through March 3, according to Weather Derivatives , a Belton, Missouri, forecaster. Heating oil for March delivery rose 0.98 cent, or 0.5 percent, yesterday to settle at $2.0421 a gallon on the New York Mercantile Exchange. To contact the reporter on this story: Brian K. Sullivan in Boston at bsullivan10@bloomberg.net ; Alex Morales in London at amorales2@bloomberg.net

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New York City May Get as Much as 13 Inches of Snow Starting Early Thursday

February 24, 2010

By Brian K. Sullivan Feb. 24 (Bloomberg) — The National Weather Service boosted its forecast for tomorrow’s snowstorm in New York City, saying that as much as 13 inches may fall and that travel in the region may be “very hazardous or impossible.” A winter storm warning goes into effect at 6 a.m. tomorrow. It calls for 7 to 13 inches (18 to 33 centimeters), up from earlier predictions of 5 to 10 inches, according to a weather service bulletin . The storm may be accompanied by wind gusts as high as 30 mph before it abates about 36 hours later. “Expect the steadiest and heaviest snow to fall from mid- morning Thursday through Thursday evening,” according to the statement. “Snow may mix with rain for brief periods of time on Thursday. If no mixing-in occurs, amounts will be up towards the higher end of the range, if not more.” The storm is the latest in an El Nino-driven weather pattern that has pushed moist air across the southern U.S., where it has mixed with colder air coming down from the Arctic, said Matt Rogers , president of private forecaster Commodity Weather Group in Bethesda, Maryland. The result has been record-breaking seasonal snows from Washington to Philadelphia. El Nino is a warming of the Pacific Ocean that occurs every two to five years and lasts about 12 months. Flights Canceled Continental Airlines Inc. , the fourth-largest U.S. carrier, canceled all flights tomorrow from Newark Liberty International Airport by regional partners including Continental Express and Pinnacle Airlines Corp.’s Colgan unit, said Mary Clark , a spokeswoman for the Houston-based carrier. The cancellations involve “several hundred” flights, Clark said. She didn’t immediately have a more specific number. Delta Air Lines Inc. , the world’s largest carrier, scrubbed 65 flights in the New York area for tomorrow, said Susan Elliott , a spokeswoman for the Atlanta-based company. UAL Corp. ’s United Airlines scrapped 70 flights today because of weather and is “still evaluating our plan for tomorrow,” said Sarah Massier, a spokeswoman. Amtrak canceled 8 trains for tomorrow on its Empire Service lines in the upstate New York area, said a spokeswoman, Karina Romero . A winter storm warning, meaning heavy snow, ice and freezing rain are imminent, has been issued from Maryland to Maine, according to the weather service. In northern New Jersey , as much as 18 inches of snow may fall, the agency said. ‘Strong Winds’ Possible “Strong winds are also possible,” the weather service statement for New York and New Jersey said. “This will make travel very hazardous or impossible.” In Massachusetts, southern New Hampshire, Rhode Island and Connecticut, where as much as 3 inches of rain may fall, flood watches have been issued. “It is a really complicated system, it is like a three- part deal,” Rogers said. “It is definitely going to be what they call a bomb in meteorology.” Tomorrow’s snow will be from the second storm to hit the area this week. A system brought rain to New York City and almost two feet of snow to western Massachusetts starting yesterday, disrupting air traffic in Newark, Boston, Baltimore and New York. “The Northeast is being impacted by one storm now, and the monster storm is going to impact the region tomorrow into Friday,” Eric Wilhelm of private forecaster AccuWeather.com . said earlier today. “A really complex situation is developing in the Northeast.” Power Failures Likely On the Massachusetts coast, sustained winds of 30 mph are expected with gusts as intense as 50 mph, according to a weather service high wind watch issued for the area. “There could be real problems with power outages,” Wilhelm said. “That could be the real legacy of this storm.” More than 50,000 customers in the Albany area and western Massachusetts are already without power from the storm moving north through New England today, according to utilities. High winds may also create wind-chill problems that will drive energy consumption, Rogers said. Temperatures in the region are expected to be in the 30s Fahrenheit, while the wind will make it feel colder. Demand for heating oil may be 8 percent above normal through March 3, according to Weather Derivatives , a Belton, Missouri, forecaster. Heating oil for March delivery rose 0.98 cent, or 0.5 percent, today to settle at $2.0421 a gallon on the New York Mercantile Exchange. Snowfall for Washington The Washington-Baltimore corridor has the potential to receive as much as 5 inches of snow in the storm, according to Brandon Peloquin, a weather service meteorologist in Sterling, Virginia . “There is some uncertainty with this storm,” Peloquin said by telephone. “There is some wiggle room. The track is critical.” The storms will add to what’s already been a benchmark winter in the eastern U.S., where seasonal snowfall records were broken in Washington and Baltimore. Most of that snow has melted away, Peloquin said. The heavy snow will taper off the day after tomorrow, although snow flurries and clouds will linger over much of the Northeast through the weekend, Wilhelm said. To contact the reporter on this story: Brian K. Sullivan in Boston at bsullivan10@bloomberg.net ;

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New York City May Get as Much as 10 Inches of Snow Starting Early Thursday

February 24, 2010

By Brian K. Sullivan and Alex Morales Feb. 24 (Bloomberg) — Snow will probably begin falling in New York City by 3 a.m. tomorrow, and before the storm ends a day later there may be as much as 10 inches (25 centimeters) on the ground, according to the National Weather Service. Between 5 and 10 inches of snow is forecast to fall on New York with as much as 14 inches to the north and west of the city, said Matt Scalora, a weather service meteorologist in Upton, New York . Tomorrow’s snow will be from the second storm to hit the area this week. A system that brought rain to New York City and 12 inches of snow to Albany starting yesterday is now disrupting air traffic in Philadelphia and New York’s La Guardia Airport. It will move into Maine today, said Eric Wilhelm of private- forecaster AccuWeather.com . “A really complex situation is developing in the Northeast,” Wilhelm said by telephone from State College, Pennsylvania. “The Northeast is being impacted by one storm now, and the monster storm is going to impact the region tomorrow into Friday.” Wilhelm said an exact forecast for snowfall in New York will be difficult because a slight variation in the track of the second storm could mean no snow at all for the city or even more than forecast. “It is a very tricky forecast in that zone,” Wilhelm said. More Washington Snow Wilhelm said Washington may receive about 3 inches of snow from the storm, while Boston and Providence, Rhode Island, will likely just experience rain and heavy winds. The storms will add to what’s already been a benchmark winter in the eastern U.S., where seasonal snowfall records were broken in Washington and Baltimore. Philadelphia may receive as much as 8 inches of snow, according to the National Weather Service in Mount Holly, New Jersey. Delays of about an hour were being reported today at LaGuardia airport and about 30 minutes at Philadelphia International Airport, according to the Federal Aviation Administration’s Web site. Winter snow warnings and watches have been issued from northern Virginia to Maine, the weather service reported. A storm watch means snow can be expected within 12 to 36 hours, while a warning means it has already started or is about to begin. Tomorrow’s snow will likely be heavy and wet, Wilhelm said. The storm will also produce high winds through much of the Northeast, he said. High Winds Scalora said wind gusts as intense as 30 miles per hour (48 kilometers per hour) could whip New York. On the Rhode Island and Massachusetts coasts, gusts as high as 70 mph may occur, Wilhelm said. “There could be real problems with power outages,” Wilhelm said. “That could be the real legacy of this storm.” The heavy snow will taper off the day after tomorrow, although snow flurries and clouds will linger over much of the Northeast through the weekend, Wilhelm said. To contact the reporters on this story: Brian K. Sullivan in Boston at bsullivan10@bloomberg.net ; Alex Morales in London at amorales2@bloomberg.net

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Homebuilder Confidence in U.S. Rises More Than Forecast in Stability Sign

February 16, 2010

By Timothy R. Homan Feb. 16 (Bloomberg) — Confidence among U.S. homebuilders rose in February to a three-month high, a sign that the housing market is stabilizing amid government support. The National Association of Home Builders/Wells Fargo index of builder confidence increased to 17, higher than anticipated, from 15 the prior month, the Washington-based group said today. Readings below 50 mean most respondents view conditions as poor. The extension and expansion of a homebuyer tax credit may give a lift to demand through the first half of the year. At the same time, builders will have to contend with mounting foreclosures and an unemployment rate that’s projected to end the year at 9.5 percent. “The housing recovery remains quite tenuous and that could be the case until employment growth resumes,” said Sal Guatieri , a senior economist at BMO Capital Markets in Toronto, who accurately forecast the February figure. The report shows builders are “feeling less gloomy about the outlook,” he said. The builder confidence index was forecast to rise to 16 this month, according to the median forecast of 46 economists surveyed by Bloomberg News. Projections ranged from 14 to 17. The index, first published in January 1985, averaged 15 last year. Stocks rose after Barclays Plc’s earnings topped estimates and a separate report showed manufacturing in the New York region expanded in February at the fastest pace in four months. The Standard & Poor’s 500 Index increased 1.4 percent to 1,090.03 at 1:22 p.m. in New York. New York Manufacturing The Federal Reserve Bank of New York’s general economic index rose to 24.9 this month from 15.9 in January. Readings above zero in the so-called Empire State Index signal growth in the area covering New York and parts of New Jersey and Connecticut. The builders group’s index of current single-family home sales rose to 17 in February from 15 a month earlier. The gauge of buyer traffic held at 12. A measure of sales expectations for the next six months rose to 27 in February from 26. “Continued low interest rates, very attractive home prices that appear to have stabilized in many markets, and the availability of the home buyer tax credit make this an opportune time for potential purchasers,” Bob Jones, the group’s chairman and a builder from Bloomfield Hills, Michigan, said in a statement. “Builders are slightly more optimistic that the housing recovery is finally beginning to take root.” Gains in South Two of four regions showed a gain in sentiment. Builder confidence in the South rose to a five-month high of 19 in February from 17. Sentiment in the Midwest increased to 13 from 11. Confidence fell in the Northeast to 19 from 20, and it dropped to 14 from 15 in the West. The confidence survey asks builders to characterize current sales as “good,” “fair” or “poor” and to gauge prospective buyers’ traffic. It also asks participants to gauge the outlook for the next six months. “Builders are just beginning to see the anticipated effects of the home buyer tax credit on consumer demand,” David Crowe , the NAHB’s chief economist, said in a statement. “That said, several limiting factors are still weighing down builder expectations, including the large number of foreclosed homes on the market.” Rising Foreclosures Rising foreclosures are adding to inventory and may discourage builders from breaking ground. A record 3 million U.S. homes will be repossessed by lenders this year as unemployment and depressed home values mean borrowers are unable to make their house payment or sell their property, according to a RealtyTrac Inc. forecast last month. Last year there were 2.82 million foreclosures, the most since RealtyTrac began compiling data in 2005. Foreclosure filings rose 15 percent in January from a year earlier and exceeded 300,000 for an 11th consecutive month, RealtyTrac said last week. President Barack Obama on Nov. 6 extended an $8,000 first- time buyer credit that was due to expire at the end of the month and expanded it to include current homeowners. The extension covers closings through June as long as contracts are signed by the end of April. Sales of new houses dropped 7.6 percent in December, the month after the government’s tax credit was due to expire, according to Commerce Department figures released Jan. 27. Housing Starts Housing starts , which jumped 24 percent from April to July as builders rushed to satisfy buyers taking advantage of the credit, are projected to climb 4.1 percent in January, according to the median estimate of economists surveyed. A report from the Commerce Department tomorrow may show builders broke ground on 580,000 houses at an annual pace in January, up from 557,000 a month earlier, the survey showed. December starts were 75 percent below their peak of 2.27 million at an annual pace reached in January 2006. D.R. Horton Inc., the second-largest U.S. homebuilder by revenue, this month reported its first quarterly profit since 2007. “We expect our September quarter will be the most challenging as a tax credit support for home sales will have expired,” Donald J. Tomnitz, president and chief executive officer, said during a Feb. 2 earnings call. To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net

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Washington, Baltimore Record Snowfall Closes Government as Melting Begins

February 10, 2010

By Brian K. Sullivan Feb. 11 (Bloomberg) — More than 72,000 homes and businesses were without power along the U.S. East Coast and hundreds of flights were canceled in the aftermath of a winter storm that set snowfall records in Washington and Baltimore. The federal government will be closed again today. A bright sun and temperatures just above freezing were forecast to start the melting process along the eastern seaboard, where an average of 12 inches (30 centimeters) fell from New York to Baltimore, said Andy Ulrich , a meteorologist with AccuWeather.com in State College, Pennsylvania. “The sun will be out fully and there won’t be a cloud in the sky,” Ulrich said in a telephone interview. “The sun is getting stronger as we approach spring, so there will be some melting.” Yesterday’s storm caused the cancellation of 5,700 flights across the U.S. and at least 1,100 more today. It also caused power outages from North Carolina to New Jersey for 72,090 customers, according to utilities. Natural gas futures fluctuated in New York as yesterday’s blizzard raged. Heating oil rose. Natural gas for March delivery rose 0.2 cent to settle at $5.292 per million British thermal units at 3:02 p.m. on the New York Mercantile Exchange. Trading ranged from $5.24 to $5.38. Heating oil for March delivery rose 0.96 cent, or 0.5 percent, to settle at $1.9469 a gallon on the New York Mercantile Exchange, after earlier touching $1.9076. Delaware, Maryland Delaware and Maryland were hit hard, with 27,000 Delmarva Power customers without power as of 5:30 p.m. yesterday, said Bridget Shelton , a spokeswoman for the company, a subsidiary of Pepco Holdings Inc. It may take several days to restore power to all of them, she said. “This is clearly a multiday event,” Shelton said in a telephone interview. “The weather and the roads are contributing to an extended restoration effort.” Delta Air Lines Inc. , the world’s largest carrier, expects operations in Washington and Philadelphia to be almost entirely halted through midday today. At least 460 more Delta flights are canceled for today, said Trebor Banstetter , a spokesman for the Atlanta-based company. AMR Corp. ’s American Airlines scrapped 180 today, said Tim Wagner , a company spokesman. US Airways Group halted 478 as well, said Valerie Wunder , a spokeswoman. Pennsylvania Interstates In Pennsylvania, all seven closed interstate highways were expected to reopen by 6 a.m. today, Governor Edward G. Rendell said in a press conference yesterday afternoon. After two tractor-trailer trucks jackknifed on I-78, 170 vehicles were stuck in the snow, said Robert French , Pennsylvania Emergency Management Agency director. At least 50 were still trapped at 5 p.m. yesterday, he said. The federal government announced the closing of agencies in the Washington area for the fourth consecutive day. Washington had received 9.8 inches (25 centimeters) as of yesterday afternoon, pushing the seasonal total to 54.9 inches, a half- inch over the mark set in 1898-99. In Baltimore, 11.9 inches fell through the evening rush yesterday, setting a new annual tally of 72.3 inches. That surpassed the 62.5 inches that fell in 1995-96, according to the National Weather Service in Sterling, Virginia. The U.S. southern states of Louisiana, Mississippi and Alabama may get a taste of what the Northeast has been handling when a winter storm moves through there the day after tomorrow leaving snow in its wake, Ulrich said. He said it is too early to forecast accurate totals for those states, which seldom see snow. To contact the reporters on this story: Brian K. Sullivan in Boston at bsullivan10@bloomberg.net .

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Washington Closes Down, Flights Canceled in Northeast as Snowstorm Looms

February 9, 2010

By Brian K. Sullivan Feb. 9 (Bloomberg) — The U.S. House of Representatives has canceled votes for the week, hundreds of flights have been scrubbed and Amtrak still isn’t running a full schedule as a “paralyzing” storm packing as much as 20 inches of snow bears down on the East Coast. The storm, the second for the Washington-Baltimore area in less than a week, will be accompanied by cold and winds gusting from 35 to 55 mph (56 to 88 kph) in the Northeast, forecasters said. Ten to 20 inches could fall in Washington, where federal offices were closed for a second full day today, while 8 to 13 are forecast for New York. “Unfortunately, everything is coming together for another paralyzing winter storm event from D.C. up to Philadelphia, but this time it won’t spare New York City,” said Jim Rouiller , a senior energy meteorologist at Planalytics Inc. “This will probably shut down the East Coast cities for the next couple of days. This is definitely going to be one for the record books.” Heating oil advanced on speculation demand will increase as temperatures plunge in the U.S. Northeast, which consumes four- fifths of home heating fuel. Contracts for March delivery gained 5.18 cents, or 2.7 percent, to settle at $1.9373 a gallon on the New York Mercantile Exchange. Heating demand in Washington and Baltimore was 16 percent higher than normal last week and New York was up 6 percent, David Salmon , a forecaster for Weather Derivatives of Belton, Missouri, said in a note to clients. Amtrak Schedules Disrupted Amtrak canceled 14 of its Acela trains between Boston and Washington, as well as more than 20 out of New York, Chicago and other Northeast cities, according to a statement. The national passenger railroad hasn’t run a full schedule since last week’s storm, said Cliff Cole , a spokesman. The biggest air carriers including UAL Corp. ’s United Airlines and Delta Air Lines Inc. canceled at least 1,300 flights today in cities including Washington, New York and Chicago. Spokesmen for the airlines said more flights would likely be scrubbed tonight. US Airways Group Inc. halted 1,300 flights for tomorrow, or 42 percent of its entire schedule, while Delta said it cut “several hundred” and AMR Corp. ’s American Airlines trimmed 120. Continental Airlines Inc. said it will suspend all 400 of its Newark flights tomorrow. Heavy snow, from 10 to 20 inches and as much as 24 inches in some isolated areas, may fall from Washington to New York, Rouiller said in a telephone interview from Berwyn, Pennsylvania. Boston is likely to receive 6 to 10 inches, along with Chicago and Detroit, he said. Winter Records “The snow we are predicting for this will lift places like Philadelphia over the record for snowfall over the course of any winter,” Rouiller said. Washington is likely to get about 10 inches tonight and tomorrow, while the snowfall will deepen closer to Baltimore , where 20 inches are possible, said Jared Klein, a weather service meteorologist in Sterling, Virginia. A system moving in from the west is forecast to spark the creation of a major low pressure system off the mid-Atlantic coast that will drive the snow northward and into the cities, Rouiller said. “They call this a bomb in the meteorological community,” Rouiller said by telephone. Washington Snarled A winter storm warning was posted for Washington starting at noon today. Federal government offices remain shut, after more than 20 inches fell on parts of the city over the weekend, the Office of Personnel Management said in an e-mailed statement. The U.S. Senate won’t meet tomorrow because of the storm, Senate Democratic Leader Harry Reid announced on the floor today. The House has canceled votes for the rest of the week. In the New York City area, a winter storm warning goes into effect at midnight. The snow is expected to be heavy at times before tapering off tomorrow evening, the National Weather Service in Upton, New York, said. New York Mayor Michael Bloomberg said public schools will close tomorrow so parents don’t have to face half-day cancellations. “The forecast is for a much worse situation with blowing snow and possibly blizzard conditions by mid-afternoon tomorrow and we don’t want to subject students to those conditions as they travel home,” said the mayor, founder and majority owner of Bloomberg News parent Bloomberg LP. Watches, warnings and advisories stretch across much of the eastern half of the U.S. from Minnesota to New Hampshire and south to Kentucky, according to the weather service. Snow Costs In New York City, 365 plow-equipped salt-spreaders will begin operating at first snowfall tonight, said Kathy Dawkins , a spokeswoman for the Sanitation Department . The plan calls for some 1,600 plows to start work when 2 inches pile up. Snow removal usually costs the city about $1 million per inch of accumulation, Dawkins said. Delaware has spent $3.9 million since Jan. 30, which almost depletes its snow removal budget of $4.1 million, said Jim Westhoff, spokesman for the state Department of Transportation. If Delaware goes over budget from the storm, it will automatically shift funds from the state’s Transportation Trust Fund. “At no time are we ever out of money for snow removal and to keep our roads safe,” Westhoff said. Alpha Natural Resources Inc. , the third-largest U.S. coal company, said today that its Cumberland operation in Waynesburg, Pennsylvania, has been idled for three days because of power disruptions. The mine has capacity to produce about 7.3 million tons of coal annually, according to the company’s Web site. Dominion Virginia Power has just about restored all power to customers who lost it during the last storm and are now positioning crews to be ready for the next, said Karl Neddenien , a company spokesman in Richmond, where snow has begun to fall. “This is quite a string of challenges and we are prepared, but we would like to see some blue sky for a while too,” Neddenien said by telephone. To contact the reporter on this story: Brian K. Sullivan in Boston at bsullivan10@bloomberg.net .

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Washington, Philadelphia Begin Digging Out From Snowstorm; More in Store

February 6, 2010

By Dan Hart Feb. 7 (Bloomberg) — Baltimore, Washington and Philadelphia begin cleaning up and digging out today from a storm that dumped two feet of snow on much of the mid-Atlantic region and left thousands without power. Elkridge, Maryland, just south of Baltimore, recorded the region’s most snowfall with 38.3 inches (97 centimeters), followed by Crofton, Maryland, with 34 inches, the National Weather Service said. Baltimore’s airport had 26.5 inches while Washington posted 20 inches. Philadelphia registered in at 28.5, its second-biggest snowfall ever. “This was an epic storm,” said Andrew Ulrich , a meteorologist for AccuWeather.com Inc. in State College, Pennsylvania. “The sheer amount of snow was amazing.” And there is more in store. AccuWeather said another storm will arrive in the Northeast during the day on Feb. 9. Possible blizzard conditions are forecast for northeastern Pennsylvania to New England and as much as 12 inches of snow may fall. Baltimore and Washington may see as much as six inches of new snow, said Ulrich. The snow began falling in Washington the morning of Feb. 5 before settling in for 24 hours and dropping as much as 3 inches an hour. ‘Snowmaggedon’ Conditions prompted a blizzard warning from the Chesapeake Bay area in Maryland up to New Jersey’s shore. Hundreds of flights at Dulles, Reagan National and Baltimore-Washington International Thurgood Marshall Airport were canceled, as was Amtrak service. The Washington Metropolitan Area Transit Authority was forced to suspend above-ground rail service and bus service. President Barack Obama , at a speaking engagement at Washington’s Capital Hilton hotel yesterday, called it “Snowmaggedon in Washington D.C.” As of 6 p.m. yesterday, Dominion Resources Inc. had 93,406 customers without power, most of those in northern Virginia. Pepco Holdings reported 101,000 customers, most of them in Montgomery County, Maryland, in the dark. Baltimore Gas & Electric Co. had 25,000 households and businesses without service. More than 160,000 power outages were reported across Pennsylvania, Governor Ed Rendell’s office said. Washington Mayor Adrian Fenty said yesterday the city is “dedicated to nothing else but trying to clear the roads so that we can be ready for business on Monday morning.” About 250 trucks plowed streets and he advised residents to stay at home. The storm puts a strain on some state and municipal budgets. Before the storm’s arrival two days ago, Virginia had already spent the $79 million it budgeted for this year for snow removal. It had to pay for the current storm from a $25 million reserve fund. Karen Le Blanc, a spokeswoman for the city of Washington said the municipality was “probably over” its $6.2 million budget at this point. To contact the reporter on this story: Dan Hart in Washington at dahart@bloomberg.net .

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Video: Levin Saw `Nice Boost’ From Economic Stimulus Plan: Video

February 5, 2010

Feb. 5 (Bloomberg) — Alan Levin, chief executive officer at Northeast Building Products, talks with Bloomberg’s Betty Liu about the impact of the government’s economic stimulus program on his company. Levin also discusses his change of perspective on the program. (Source: Bloomberg)

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U.S. Homebuilder Confidence Unexpectedly Drops in Sign Recovery Stalling

January 19, 2010

By Bob Willis Jan. 19 (Bloomberg) — Confidence among U.S. homebuilders unexpectedly dropped in January to the lowest level since June, a sign the housing recovery may stall in coming months. The National Association of Home Builders/Wells Fargo index of builder confidence decreased to 15 from 16 the prior month, the Washington-based group said today. Readings below 50 mean most respondents view conditions as poor. The report showed traffic slowed to a 10-month low, indicating the government’s extension and expansion of its first-time buyer program has, so far, not drawn in new demand after propelling total sales to an almost three-year high in November. A projected record 3 million foreclosures this year may also pressure prices, making it more difficult for homebuilders to turn a profit. “The past strength in the housing market was inflated by the tax credit,” said David Sloan , chief U.S. economist at 4Cast Inc. in New York, who was the only economist surveyed to foresee a drop in the index. “We’re seeing a bit of payback from those over-inflated levels.” Stocks held earlier gains following the report, while builder shares retreated from prior highs. The Standard & Poor’s 500 Index was up 1 percent to 1,147.18 at 1:16 p.m. in New York. The S&P Supercomposite Homebuilder Index gained 0.8 percent after having been up as much as 1.1 percent before the report. Less Than Forecast The builder confidence index was forecast to increase to 17 this month, according to the median forecast of 45 economists surveyed by Bloomberg News. Projections ranged from 14 to 18. The index, first published in January 1985, averaged 15 last year. The builders group’s index of current single-family home sales fell to 15 in January from 16 in December. The gauge of buyer traffic dropped to 12, the lowest level since March, from 13. A measure of sales expectations for the next six months held at 26. “Factors beyond our control, including consumer concerns about job security and competition from foreclosed homes on the market, are still impeding demand for new homes at this time,” Joe Robson, the group’s chairman and a builder from Tulsa, Oklahoma, said in a statement. Broad Decrease All four regions showed a drop in sentiment, led by the West, which fell to 16 from 19. In the Northeast, confidence decreased to 22 from 23, in the Midwest it fell to 11 from 12 and dropped to 16 from 17 in the South. The confidence survey asks builders to characterize current sales as “good,” “fair” or “poor” and to gauge prospective buyers’ traffic. It also asks participants to gauge the outlook for the next six months. “Consumers are still waiting to see significant positive signs of improvement in employment and confidence, and this is slowing buyers’ return to the market,” David Crowe , the NAHB’s chief economist, said in a statement. Rising foreclosures are adding to inventory and may discourage builders. A record 3 million U.S. homes will be repossessed by lenders this year as high unemployment and depressed home values leave borrowers unable to make their house payment or sell, according to a RealtyTrac Inc. forecast on Jan 14. Last year there were 2.82 million foreclosures, the most since RealtyTrac began compiling data in 2005. ‘Borrowing Demand’ “A lot of inventory is still coming onto the market from distressed sales and that is borrowing demand from new homes,” Julia Coronado , a senior economist at BNP Paribas in New York, said before the report. “Improvement in construction will be gradual in the initial stages.” President Barack Obama on Nov. 6 extended an $8,000 first- time buyer credit that was due to expire at the end of the month and expanded it to include current homeowners. The extension covers closings through June as long as contracts are signed by the end of April. Still, the measure may have pulled sales forward, depressing demand in coming months. Sales of new houses dropped 11 percent in November, the month the government’s tax credit was due to expire. A jump in purchases of existing homes pushed total sales up to a 6.895 million annual pace, the most since March 2007. Starts Forecast Housing starts , which jumped 24 percent from April to July as builders rushed to satisfy buyers taking advantage of the credit, will probably cool in coming months as sales slow. A report from the Commerce Department tomorrow may show builders broke ground on 575,000 houses at an annual pace in December, little changed from 574,000 a month earlier, according to the median forecast of economists surveyed by Bloomberg. November starts were 75 percent below their peak of 2.27 million pace reached in January 2006. KB Home , the Los Angeles-based homebuilder that sells to first-time buyers, is among those struggling. The company last week reported a pretax loss of $91 million on declining revenue for the fiscal fourth quarter that ended Nov. 30. KB Home’s orders rose 12 percent to 1,446 from 1,296 in the year-earlier quarter, while completed sales dropped 22 percent to 3,042, according to the report. The average price declined 12 percent to $203,400. KB Home is “not going to make money in the first quarter” and plans to “restore profitability” in the second half of 2010, Chief Executive Officer Jeffrey Mezger said Jan. 12 in a conference call with analysts and investors. To contact the reporter on this story: Bob Willis in Washington bwillis@bloomberg.net

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Pending Sales of Existing U.S. Homes Fall; Factory Orders Exceed Forecasts

January 5, 2010

By Bob Willis (Corrects to show joblessness near 26-year high in third paragraph.) Jan. 5 (Bloomberg) — The number of contracts to buy previously owned U.S. homes fell more than forecast in November as Americans waited for a first-time buyer tax credit to be extended. The index of signed purchase agreements, or pending home sales, dropped 16 percent after a revised 3.9 percent October gain that was more than initially reported, the National Association of Realtors said today in Washington. It was the first decrease in 10 months. The figure shows housing may be at risk of weakening when homebuyer incentives, which were extended in November, expire later this year. Unemployment close to a 26-year high and weaker consumer finances remain hurdles to a sustained acceleration in home sales that would help fuel the economy. “There will be a couple of months where you’ll see noticeable weakness in home resales,” Joshua Shapiro , chief U.S. economist at Maria Fiorini Ramirez Inc. in New York, said before the report. “I don’t expect the trajectory we’ve seen over the past three to six months to be maintained.” Sales were projected to fall 2 percent after an originally reported gain of 3.7 percent in October, according to the median of 35 forecasts in a Bloomberg News survey. Estimates ranged from a drop of 12 percent to a 3.9 percent increase. Compared with November 2008, pending sales were up 19.3 percent, the real estate group said. All four U.S. regions registered decreases in November, led by 26 percent slumps in the Northeast and Midwest. Pending sales dropped 15 percent in the South and 2.7 percent in the West. Leading Indicator Pending home sales are considered a leading indicator because they track contract signings. The Realtors’ existing- home sales report tallies closings, which typically occur a month or two later. The Realtors group started publishing the index in March 2005, and data go back to January 2001. Transactions had to close by Nov. 30 for buyers to qualify for the tax credit, which explains why resales continued to rise through November. President Barack Obama on Nov. 6 extended the $8,000 first- time buyer credit and expanded it to include current homeowners in a bid to boost demand. The extension allows closings to occur by the end of June as long as contracts are signed by the end of April. Still, the measure may have pulled sales forward and could result in fewer purchases in coming months. Sales of existing homes in November rose 7.4 percent to a 6.54 million annual rate, the highest level in almost three years, the National Association of Realtors said on Dec. 22. Foreclosures accounted for 33 percent of all sales, NAR said. Cheaper Homes The slump in housing has made homes more affordable. The S&P/Case-Shiller index of average home prices in 20 U.S. cities was down 29 percent in October from its peak in July 2006. The measure also fell 7.3 percent from October 2008. Federal Reserve officials are trying to sustain the housing rebound by pledging to keep the benchmark interest rate near zero for an “extended period,” according to their latest policy statement. Even so, mortgage rates have begun rising. The average rate on a 30-year fixed home loans rose to 5.14 percent for the week ended Dec. 31, the fourth consecutive gain after reaching a record low of 4.71 percent in the week ended Dec. 3, according to mortgage finance company Freddie Mac. Housing and mortgage markets are facing “headwinds,” including foreclosures and tight credit, that are “relatively strong and are likely to restrain the pace at which the residential construction sector recovers,” Fed Governor Elizabeth Duke said in a speech yesterday in Raleigh, North Carolina. Builders Struggle Builders are still struggling even as many forecast a rebound this year. Hovnanian Enterprises Inc ., New Jersey’s largest homebuilder, said Dec. 16 its fourth-quarter loss narrowed as more buyers signed purchase contracts. “2010 will be a year of transition for us,” Chief Executive Officer Ara Hovnanian said on a conference call. “We have started down a path that we believe will eventually return us to profitability.” An absence of job gains remains a hurdle for housing. The economy has lost 7.2 million jobs since the recession began in December 2007. The unemployment rate may exceed 10 percent through the first half of 2010, a Bloomberg survey showed. To contact the reporter on this story: Bob Willis in Washington bwillis@bloomberg.net .

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Titan Energy Worldwide Hires Clifford Macaylo as President of Northeast Operations

December 21, 2009

Recent Accretive Northeast Acquisition Will Add $2.7 Million of New Business and Serves as Nucleus of Northeast Expansion

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Updated: Multi-Brand Grocer, Penn Traffic, Files Bankruptcy

November 24, 2009

Syracuse, NY-based Penn Traffic Company, which operates supermarkets under the P&C, Quality Markets and BiLo banners in four Northeast states; filed Chapter 11 on November 18, 2009. The company intends to sell its stores and other assets under bankruptcy…

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WP Realty Closes Fifth Real Estate Fund with $115 Million

October 23, 2009

WP Realty, a retail investor based in Bryn Mawr, Pa., has closed WP Real Estate Fund V with $115 million in equity commitments. The fund will target distressed and undervalued shopping centers throughout the mid-Atlantic and Northeast regions of the

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Commercial Real Estate Bottom: Is Your Bank Building Provisions Ahead Of This H2 2010 Event? (Wall Street Transcript via Yahoo! Finance)

October 11, 2009

67 WALL STREET, New York – October 10, 2009 – The Wall Street Transcript has just published its Northeast and Mid-Atlantic Regional Banks Report offering a timely review of the sector to serious investors and industry executives. This 121 page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is …

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Single-Family U.S. Home Starts Rise for Fifth Month; Wholesale Prices Fall

August 18, 2009

By Shobhana Chandra and Bob Willis Aug. 18 (Bloomberg) — Housing starts in the U.S. unexpectedly fell in July, pulled down by multifamily dwellings, while single-family starts which make up most of the industry rose to the highest level since October. The 1 percent decline in starts to an annual rate of 581,000 was the first drop in three months and followed a 587,000 rate in June, the Commerce Department said today in Washington. Construction of single-family houses, which account for 75 percent of the industry, rose 1.7 percent to a 490,000 rate, today’s report showed. Single-family home construction has been rising since March, a sign that falling home values and stimulus efforts such as a tax credit for first-time buyers are starting to reverse the housing meltdown that triggered the financial crisis. While the economy is forecast to grow this quarter, foreclosures, tight credit and job losses will temper the recovery. “We’ve formed a bottom but probably only have limited upside, with unemployment too high to boost demand” much higher than current levels, said Mark Vitner , a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “Single-family construction is probably getting some help from the $8,000 tax credits. We expect construction to make a positive contribution to GDP growth in the second half.” Stocks rose after the report and Treasuries were little changed. The yield on the benchmark 10-year note was 3.48 percent at 9:33 a.m. in New York. The Standard & Poor’s 500 Index was up 0.4 percent at 984.04. Economists’ Forecasts Total starts were projected to rise to a 599,000 annual pace, after an initially reported 582,000 the prior month, according to the median forecast of 70 economists surveyed by Bloomberg News. Estimates ranged from 542,000 to 646,000. Building permits, a sign of future construction, fell 1.8 percent in July to a 560,000 annual pace from 570,000. Separately, a Labor Department report today showed wholesale prices in the U.S. fell more than forecast in July as energy costs receded. The 0.9 percent decrease in prices paid to factories, farmers and other producers followed a 1.8 percent gain in June, the Labor Department said. Excluding food and fuel, so-called core prices unexpectedly fell 0.1 percent. Confidence among builders rose to a one-year high this month, a National Association of Home Builders/Wells Fargo index showed yesterday. The gauge climbed to 18, matching forecasts, from 17 the prior month. At the same time, a reading below 50 means most respondents view conditions as poor. Multifamily Work on multifamily homes, such as townhouses and apartment buildings, dropped 13 percent to an annual rate of 91,000. Multifamily projects are more vulnerable to credit constraints facing some builders. The decrease in starts was led by a 16 percent drop in the Northeast, followed by a 1.6 percent decline in the West and 1.4 percent in the South. They rose 13 percent in the Midwest. Toll Brothers Inc. , the largest U.S. luxury homebuilder, reported third-quarter revenue that exceeded analysts’ estimates. New-home contracts rose over the year-earlier quarter for the first time since 2005, Horsham, Pennsylvania-based Toll said on Aug. 12. “Although some of our markets are still stuck in the mud, many are improving,” Chairman and Chief Executive Officer Robert Toll said on a conference call. “It does feel as if the fence sitters are looking for reasons to jump in.” Government Help Government efforts to stoke the housing market have included offering lenders incentives to modify the terms of delinquent mortgages; Federal Reserve purchases of mortgage- backed securities to free up funding for home loans; and an $8,000 tax credit for first-time home buyers for transactions completed before Dec. 1. Foreclosures remain a threat to builders. About $3.4 trillion worth of houses are at risk of default because the owners owe more than the property is worth, Santa Ana, California-based First American CoreLogic said last week. Meanwhile, foreclosure-driven declines in prices are lifting sales. Homeowners cut asking prices by $27.8 billion in the year through Aug. 1, according to Trulia Inc., a San Francisco-based real estate data provider. To contact the reporter on this story: Shobhana Chandra in Washington schandra1@bloomberg.net ; Bob Willis in Washington bwillis@bloomberg.net

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Single-Family U.S. Housing Starts Rise for a Fifth Month in Stability Sign

August 18, 2009

By Shobhana Chandra and Bob Willis Aug. 18 (Bloomberg) — Housing starts in the U.S. unexpectedly fell in July, pulled down by multifamily dwellings, while single-family starts which make up most of the industry rose to the highest level since October. The 1 percent decline in starts to an annual rate of 581,000 was the first drop in three months and followed a 587,000 rate in June, the Commerce Department said today in Washington. Construction of single-family houses, which account for 75 percent of the industry, rose 1.7 percent to a 490,000 rate, today’s report showed. Single-family home construction has been rising since March, a sign that falling home values and stimulus efforts such as a tax credit for first-time buyers are starting to reverse the housing meltdown that triggered the financial crisis. While the economy is forecast to grow this quarter, foreclosures, tight credit and job losses will temper the recovery. “We’ve formed a bottom but probably only have limited upside, with unemployment too high to boost demand” much higher than current levels, said Mark Vitner , a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “Single-family construction is probably getting some help from the $8,000 tax credits. We expect construction to make a positive contribution to GDP growth in the second half.” Stocks rose after the report and Treasuries were little changed. The yield on the benchmark 10-year note was 3.48 percent at 9:33 a.m. in New York. The Standard & Poor’s 500 Index was up 0.4 percent at 984.04. Economists’ Forecasts Total starts were projected to rise to a 599,000 annual pace, after an initially reported 582,000 the prior month, according to the median forecast of 70 economists surveyed by Bloomberg News. Estimates ranged from 542,000 to 646,000. Building permits, a sign of future construction, fell 1.8 percent in July to a 560,000 annual pace from 570,000. Separately, a Labor Department report today showed wholesale prices in the U.S. fell more than forecast in July as energy costs receded. The 0.9 percent decrease in prices paid to factories, farmers and other producers followed a 1.8 percent gain in June, the Labor Department said. Excluding food and fuel, so-called core prices unexpectedly fell 0.1 percent. Confidence among builders rose to a one-year high this month, a National Association of Home Builders/Wells Fargo index showed yesterday. The gauge climbed to 18, matching forecasts, from 17 the prior month. At the same time, a reading below 50 means most respondents view conditions as poor. Multifamily Work on multifamily homes, such as townhouses and apartment buildings, dropped 13 percent to an annual rate of 91,000. Multifamily projects are more vulnerable to credit constraints facing some builders. The decrease in starts was led by a 16 percent drop in the Northeast, followed by a 1.6 percent decline in the West and 1.4 percent in the South. They rose 13 percent in the Midwest. Toll Brothers Inc. , the largest U.S. luxury homebuilder, reported third-quarter revenue that exceeded analysts’ estimates. New-home contracts rose over the year-earlier quarter for the first time since 2005, Horsham, Pennsylvania-based Toll said on Aug. 12. “Although some of our markets are still stuck in the mud, many are improving,” Chairman and Chief Executive Officer Robert Toll said on a conference call. “It does feel as if the fence sitters are looking for reasons to jump in.” Government Help Government efforts to stoke the housing market have included offering lenders incentives to modify the terms of delinquent mortgages; Federal Reserve purchases of mortgage- backed securities to free up funding for home loans; and an $8,000 tax credit for first-time home buyers for transactions completed before Dec. 1. Foreclosures remain a threat to builders. About $3.4 trillion worth of houses are at risk of default because the owners owe more than the property is worth, Santa Ana, California-based First American CoreLogic said last week. Meanwhile, foreclosure-driven declines in prices are lifting sales. Homeowners cut asking prices by $27.8 billion in the year through Aug. 1, according to Trulia Inc., a San Francisco-based real estate data provider. To contact the reporter on this story: Shobhana Chandra in Washington schandra1@bloomberg.net ; Bob Willis in Washington bwillis@bloomberg.net

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UnitedHealth Profit Jumps on Higher Premiums, Gains in Medicare Enrollment

July 21, 2009

By Alex Nussbaum July 21 (Bloomberg) — UnitedHealth Group Inc. , the top U.S.

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