Pessimism about the global economy and concerns about consumer spending are pushing stocks and exchange traded funds (ETFs) back and forth between positive and negative territory this morning.
Major retailers reported that consumers are still reluctant to shop, hindering the economic recovery and underscoring the importance of overseas demand in restoring the world economy to health, states Ann Zimmerman and Sara Murray of The Wall Street Journal. Most retail executives believe that this trend will continue through the rest of the year.
In financial news, Swiss bank UBS (UBS) has agreed to release to the IRS the names and details of accounts held by 4,450 American customers. The release of this information conforms with both U.S. and Swiss banking laws and the tax treaty signed by both countries. It’s expected to reveal the identities of those who are hiding significant amounts of assets and income offshore.
In the real estate arena, mortgage applications jumped as borrowing rates for a 30-year fixed loan dropped to an average of 5.15%. The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications for the week ended Aug. 14 jumped 5.6%, while its seasonally adjusted purchase index rose 3.9%. Despite the news, the iShares Dow Jones U.S. Real Estate Index (IYR) was down 1.6%.
Black gold reversed its early losses this morning caused by concerns on the strength of the global economy after a report by the American Petroleum Institute indicated that U.S. oil demand is down 3% year-on-year as opposed to an average decline of 6% in the first half of the year. Investors were optimistic of this data and sent shares of the United States Oil Fund (USO) up 1.8%.
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Kevin Grewal contributed to this article.