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%.

For more stories on  real estate, visit our real estate category.

Kevin Grewal contributed to this article.

The news on consumer savings further trickled down and reinforced uncertainty on the demand for crude oil, forcing traders to be wary of the fate of black gold sending the price of a barrel of crude down to $69.80 in electronic trading on the New York Mercantile Exchange.  The US Oil Fund (USO) dropped 1.4% in morning trading.

There is yet more positive news coming in from the real estate sector.  Homebuilder giant KB Homes (KBH) stated that new home orders in the second quarter spiked 59% over first-quarter levels and cancellation rates decreased to 20%, down from 27% a year ago.  Despite this encouraging news, KB Homes reported a quarterly loss of $1.03 per share and missed analysts’ expectations of a loss of $0.64 per share.  As a result the SPDR S&P Homebuilders (XHB) dropped nearly 1.7% in intraday trading.

On a separate note, deflationary fears are hitting Japan as consumer prices fall at a record pace.  Japan’s key consumer price index, or the core nationwide CPI, fell by 1.1% from the previous year, extending out a three-month decline.  Additionally, the core CPI for Tokyo dropped 1.3% in June suggesting that prices throughout the nation are headed further south.  The news sent the iShares MSCI Japan Index (EWJ) down nearly 0.1% in morning trading.

The Dow Jones Industrial Average gave up nearly 0.7%, the S&P 500 dropped about 0.6% and the Nasdaq was down 0.2% in morning trading.

For more stories on retail and consumers, visit our retail & consumer category.

Kevin Grewal contributed to this article.