Stocks and exchange traded funds (ETFs) are see-sawing this morning as investors weigh the economy in the wake of mixed news.
New home sales in September posted a surprise increase of 2.7% while prices fall, reports Martin Crutsinger for the Associated Press. The median price is down 9.1% year-over-year to $218,400, the lowest level since September 2004. At that time, the country was still in a five-year housing boom.
The increase in sales last month still leaves them 33.1% below last year’s level.
One of the key issues in the credit crisis is the seizing up of the credit markets, and lending rates between the United States and Europe showed signs of heading just barely lower. This suggests there are still concerns that are keeping credit conditions tight, says the Associated Press. The London Interbank Offered Rate, or Libor, dropped just slightly from 3.52% to 3.51%.
The U.S. government, meanwhile, is starting to dole out the financial rescue funds by buying $125 billion in stock from nine major banks this week. This is the first deployment of resources from the $700 billion bailout package, Crutsinger says.
Oil prices are extending their decline as investors ignore OPEC’s production cut, reports John Porretto for the Associated Press. There are also concerns about a continuing drop in energy demand, which has sent oil down below $63 a barrel.
United States Oil (USO) is down 47.7% in the last three months and 30% year-to-date.