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Why Even Rich People Are Having Trouble Getting a Mortgage

Home prices are rising, but even the well-off are facing obstacles from tight-fisted banks

By: Richard Satran

US News & World Report’s | August 1, 2013

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Having trouble getting home financing? You’re not alone. Even wealthy  people are getting rejected under the tough new lending rules adopted  after 2008’s housing market crash.

Moneyed  enclaves are still feeling the impact of tight mortgage money. In the  breezy New Hampshire lakes region where “On Golden Pond” was filmed and  waterfront homes routinely sell in the $5 million to $10 million range,  sales are “brisk” but loan applications are often rejected, says sales  associate Jerry Love of Peabody & Smith Realty in Holderness, N.H.,  on the shore of Squam Lake.

“We don’t see deals  sail through with the automatic approvals that we used to see,” Love  says. “And we are seeing plenty of wealthy people turned down on  million-dollar loans who would easily have qualified a few years back.”

The  rules may get even tougher under proposals now being considered in  Washington designed to cap borrowing as a percentage of income. That  will be especially bad news for first-time homebuyers and people with  moderate incomes who have the hardest time lining up financing. But even  those with millions in assets and high credit scores are being turned  down if their income is low. And in a low-rate environment, their  investment income counts for less than ever on bank loan applications.

“People  with a lot of resources are usually OK getting first mortgages, but  they are finding they can’t refinance or get funding for a second home,”  says Tyler Vernon, a loan specialist for Biltmore Capital Advisors in  Princeton, N.J. “Of course it’s a nice, high-level problem to have. But  it’s a real problem for retirees in places like the Northeast.”

Also,  while increasingly stringent income requirements are posing the most  barriers, stingy assessments are also a frequent problem for costlier  deals, according to real estate agents and lenders. In part, that’s  because “assessors are protecting themselves because banks have been  suing them over mortgage failures that showed inflated values,” Vernon  says. Costly properties can pose difficulties when assessors try to find  comparable sales for estimating what mansions are worth, Love adds.

“Everything  has moved to a much more rigorous underwriting environment, and every  datapoint in every application is verified, checked and documentation is  gone over multiple times,” says Michael Fratantoni, vice president of  single-family research and policy development at the Mortgage Bankers  Association.

People with money are finding ways  to buy properties, but in the first go-around, they are finding  surprises. “The lenders want income statements. They want to check with  employers directly on people’s work record, and they want to see people  who have been in jobs for awhile,” Love says. “That’s not something our  wealthy buyers can always show.”

To be sure,  it’s first-time buyers and people with moderate incomes who are having  the most trouble getting credit, Fratantoni says. But this is a  dramatically different lending environment no matter what income strata  you are in. The MBA’s index on mortgage credit availability has risen  slightly over the past year, but it’s nothing like it was prior to the  crash. The MBA’s credit availability index is just two years old. But it  calculates that home financing would have been eight times as easy in  the years leading up to the housing collapse.

Still,  some lending has thawed a bit. The MBA says there has been some recent  easing up on loan requirements, and wealthier borrowers have benefited  the most: Even borrowers without high incomes are starting to qualify  based on healthy savings and high credit scores alone. “They have a  better chance, but not every lender is willing to do that,” Fratantoni  says. “It might require some shopping around.”

But  even as the housing market improves, loan originations overall are  expected to drop by 10 percent this year versus last, according to the  MBA. Banks remain reluctant to part with their own reserves, even though  they are flush after five years of easy money from the Federal Reserve.  Fratantoni says the change in credit availability reflects the banks’  more prudent lending and the elimination of “no-documention” and  “interest-only” loans that led to many of the foreclosures in the real  estate crash.

Also, bad loans of all shapes and  sizes are still working their way through foreclosures and court  proceedings. Just this week, prosecutors in New Jersey filed charges  against one of television’s “Real Housewives of New Jersey,” Teresa  Giudice, and her husband Giuseppe “Joe” Giudice, who were charged with  falsifying income data on $2 million in home mortgages dating back to  the early 2000s when standards were loose.

Financial  regulators are also pushing for controls to avoid the excesses that led  to the crash. The new Consumer Financial Protection Bureau has been  pushing for a limit on borrowing when a debt-to-income ratio exceeds 43  percent, although Congressional opponents worry it will “reduce access  to credit that qualified borrowers need to buy homes,” according to a  press release issued by members of a House Financial Services  subcommittee.

Lending experts say consumers  need to be well-prepared to deal with the stringent process when they  seek loans. Documentation is important, sometimes in the form of a  letter from an employer. People seeking mortgages should also be  prepared to shop for deals. Different lenders have much different  standards. Down payments are rising for many loans, with 20 percent to  30 percent equity required from private lenders. For those who qualify  for FHA loans, the down payment is 3.5 percent, but requirements for the  federal lending program are stringent. Two years in a job and a credit  score of 620 or better are needed, and costly mortgage insurance adds  more than a percentage point to the lifetime cost of the loan. For  wealthy buyers, FHA loans don’t help much since they are capped at  $625,000.

The high-end lending market is  slowly recovering, though, and private lenders are extending credit for  the well-heeled while avoiding the starter-home set that can borrow  through government programs. “It’s more work but things are getting  done,” says Love, whose clients are mostly those with enough money to  afford a second home. “We are very busy this summer, and we haven’t even  gotten to the peak period [at summer’s end when people often buy  vacation homes.]”

Biltmore’s  Vernon says his firm has been busy getting loans for wealthy clients  who borrow against their investment portfolios. The rate of borrowing in  so-called margin accounts has reached near the all-time highs just  before the 2008 market crash. That strategy is attractive because such  arrangements offer rates as low as 1 percent and sometimes even less,  and they require no additional down payment because the banks hold the  securities that back up the loans. “It’s almost no risk to the banks  because the securities are pledged as collateral,” Vernon says.

The  downside is that if the securities fall in value, the borrower’s assets  can be liquidated. Vernon says he advises caution and recommends such  borrowers keep “back-up emergency funds” like a home equity credit line.  The rates can also increase as overnight bank-lending benchmark rates  rise.

MBA’s Fratantoni worries that a further  increase in interest rates could cause problems for borrowers at all  income levels. “People’s credit has been getting better since the  crisis,” he says. “But any time you see a rapid increase in rates,  anything tied to variable rates has some additional risk.” Bankers and  consumer advocates find themselves in rare agreement on the issue.  Easing loan terms too much could be risky for banks and borrowers.

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Housing stocks fall, Facebook jumps on Wall Street

MATTHEW CRAFT / AP Business Writer

The Associated Press | July 25, 2013

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NEW YORK (AP) — Disappointing results from PulteGroup, D.R. Horton and other home builders left major stock indexes with only tiny gains in afternoon trading. Technology stocks rose after Facebook’s earnings blew past analysts’ estimates.

Even with plenty of news from big companies, the broader market was mixed. Of the 10 industry groups in the Standard & Poor’s 500 index, five rose and five fell.

D.R. Horton, the country’s largest builder, and PulteGroup said orders for new houses jumped in the second quarter, but their results still fell short of what analysts had expected. PulteGroup also posted a 14 percent decline in profits

D.R. Horton dropped $1.77, or 8 percent, to $19.45. PulteGroup lost $1.95, or 11 percent, to $16.49.

‘‘Housing is taking it on the chin,’’ said JJ Kinahan, chief derivatives strategist at TD Ameritrade. ‘‘I think what you’re seeing a bit of today is people questioning what higher mortgage rates mean for housing.’’

Technology companies fared better. Facebook jumped 27 percent after reporting earnings late Wednesday that easily beat analysts’ forecasts thanks to higher revenue from advertisements on mobile devices. Facebook’s stock rose $7.16 to $33.68.

The Standard & Poor’s 500 index was up two points, or 0.1 percent, to 1,688 as of 2:30 p.m.

The Dow Jones industrial average rose two points, or 0.01 percent, at 15,543. The Dow was held back by Caterpillar, which warned of sagging sales on Wednesday.

The Nasdaq composite index rose 17 points, or 0.5 percent, to 3,596.

It’s nearly halfway through the second-quarter earnings season, and the overall trend looks good, but not great, said Tyler Vernon, chief investment officer of Biltmore Capital in Princeton, NJ. ‘‘There have been some big disappointments, like Caterpillar yesterday, but we’re seeing better and better numbers coming out.’’

Analysts forecast that companies in the S&P 500 index will report earnings growth of 4.3 percent over the same period last year, according to S&P Capital IQ. At the start of July, the forecast was for growth of 2.8 percent. More than six out of every 10 companies have cleared analysts’ earnings targets so far.

Eventually, improving profits should help push the S&P 500 index above 1,700 in the coming weeks, Vernon said.

In the market for U.S. government bonds, the yield on the 10-year Treasury note climbed to 2.62 percent from 2.59 percent the day before. Late last week, it was trading at 2.48 percent.

The 10-year yield acts as a benchmark rate for most mortgage loans. A sharp increase in the rate drives up mortgage costs and could slow down sales in the housing market.

It’s still very low by historical standards thanks in large part to the Federal Reserve’s massive bond-buying program. The yield hit a recent low of 1.63 percent on May 3. By contrast, it was trading around 4 percent in the summer of 2008, shortly before the worst days of the financial crisis.

Among other stocks making big moves:

— Las Vegas Sands, a major casino operator, fell $1.25, or 2.3 percent, to $53.69 after it posted lower revenue and income than financial analysts had expected.

— Harley-Davidson rose 40 cents, or 1 percent, to $56.27 following news that the Milwaukee-based motorcycle maker’s earnings rose 10 percent in the second quarter, driven by an aggressive expansion abroad and revamped production.

— Visa rose $8.06, or 4 percent, to $194.78. Visa returned to profitability in its third fiscal quarter and reported strong revenue growth as the company processed more transactions worldwide.

© Copyright 2013 Globe Newspaper Company.

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Biltmore Capital Advisors’ Tyler Vernon is named a New Jersey Five Star Wealth Manager by New Jersey Monthly Magazine!

Press Release: Biltmore Capital Advisors – Thu, Apr 11, 2013 9:00 AM EDT

PRINCETON, N.J., April 11, 2013 /PRNewswire/ — Biltmore Capital Advisors president and CIO, Tyler Vernon, receives ranking among New Jersey Monthly Magazine’s 2013 Top Wealth Managers.

The list recognizes the efforts and success of financial professionals across the state. The award is presented by New Jersey Monthly Magazine that engaged Five Star Professional, an independent research company, to perform research and rankings of Wealth Managers in New Jersey.

“It is a tremendous honor to be ranked as a Five Star Wealth Manager,” says Vernon. “My team and I strive to consistently deliver outstanding service and investment advice, and this award underscores our ongoing efforts.”

Mr. Vernon is president and Chief Investment Officer at Biltmore Capital Advisors. Mr. Vernon founded the Princeton, NJ-based firm after spending nearly a decade working on Wall Street. Biltmore Capital Advisors specializes in investment planning and management, with a particular focus on alternative investment strategies. Mr. Vernon is often featured by the national media, including on CNBC, Fox Business, Bloomberg, and in the Wall Street Journal.

Vernon was featured in the January 2013 issue of New Jersey Monthly Magazine. Vernon was also recognized on the 2011 list.

About Biltmore Capital Advisors
Biltmore Capital Advisors is a SEC-registered investment advisory firm headquartered in Princeton, NJ. Tyler Vernon is Chief Investment Officer of the firm, which employs “family office” services and fiduciary oversight for high net worth clients, endowments and foundations.

For more information on Biltmore Capital Advisors and its offerings, please visit
www.biltmorecap.com.

CONTACT: Marissa Foy for Biltmore Capital Advisors at 610-228-2104 or
Marissa@GregoryFCA.com

Award candidates were then evaluated against 10 objective eligibility and evaluation criteria associated with wealth managers who provide quality services to their clients such as client retention rates, client assets administered, firm review and a favorable regulatory and complaint history. Five Star Professional finalized the list of Five Star Wealth Managers to be no more than 7% of the wealth managers in the area.
• Wealth managers do not pay a fee to be considered or placed on the final list of Five Star Wealth Managers.
• The Five Star award is not indicative of the wealth manager’s future performance.
• Wealth managers may or may not use discretion in their practice and therefore may not manage their client’s assets.
• The inclusion of a wealth manager on the Five Star Wealth Manager list should not be construed as an endorsement of the wealth manager by Five Star Professional or the magazine.
• Working with a Five Star Wealth Manager or any wealth manager is no guarantee as to future investment success, nor is there any guarantee that the selected wealth managers will be awarded this accomplishment by Five Star Professional in the future.
For more information on the Five Star award and the research/selection methodology, go to www.fivestarprofessional.com

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To buy or re-fi: Is now the time?

by Kathryn Tuggle, Personal Finance Editor

Dimespring | November 21, 2012

 

Interest rates may be at record lows, but that doesn’t mean you should pull the trigger on a major purchase before you’re ready. Whether you’re looking to buy a home or refinance the one you’ve got, it’s always best to put pen to paper and consult with experts before making a change. With that said, it’s unclear how long rates will remain below 4 percent, and nobody wants to miss the boat. We checked in with interest rate and mortgage experts to find out if now is really the best time to make a move.

Will interest rates ever be this low again?

“It’s certainly a generational low — no one has ever seen this before,” says Tyler Vernon, president and CIO of Biltmore Capital Advisors in Princeton, NJ. “There’s a camp who thinks we’ll enter a Japanese deflationary cycle, in which case we could see much lower rates. In our opinion that is not a very likely outcome, especially during a time when our Fed Chairman Bernanke has studied the Great Depression and seems to rely heavily on monetary policy, primarily the printing of more dollars.”

Vernon says that he does not think rates will go much lower, and that it’s likely that this will be the last time “our generation” sees these kind of rates.

It’s likely that interest rates will stay low until the economy is back in full swing and unemployment is down to at least 5 percent, says Joe Gross, marketing expert and president of Joe Gross Marketing in New York.

In the near future, interest rates will remain low due to the Fed’s commitment to purchase bonds, says Robert Luna, CEO of SureVest Capital Management in Phoenix, Ariz.

“Longer term I fear that this game can only last so long and will eventually lead to much higher rates,” Luna says. “I am much more concerned with rates rising looking three to five years out than I am in the shorter term. “

Should you move now on that purchase you’ve been debating?

“If you are referring to a home, yes,” says Vernon. “In our view, it’s quite clear that the housing market is coming back on a national basis. By instituting Operation Twist, the Fed has been intentionally buying long term bonds in attempts to drive down mortgage rates which are tied to bond prices. They have succeeded!”

Vernon says the historical lows we are seeing on mortgage rates is helping the housing market by making loans cheaper — leading to a win-win for both first time and existing home buyers.

“Consumers should certainly move now if they are considering a big-ticket purchase because interest rates are about as low as they’re going to get,” says Odysseas Papadimitriou, CEO and founder of Evolution Finance and CardHub.com. “The credit card data we monitor on an ongoing basis shows that 0 percent offers have plateaued as of late, with the average introductory period lasting right around 10 months. Failing to pull the trigger now could therefore cost you a lot of money down the road when rates rise and finance charges become a bigger factor.”

If you’re considering a major life-changing purchase like a house or a car, etc. should low interest rates even influence such a significant purchase in your life?

“Yes, low rates should certainly influence your timing,” says Vernon. “Make sure, however, that you can afford this kind of property and don’t just buy it because rates are low. If the timing is right and you find a home or car you like, assuming you need it, it certainly is the time to buy.”

Vernon cautions that if it’s a car you want to buy, you may have to negotiate a bit as companies can make a lot of money by charging you a higher rate.

Luna says he feels this is the “ideal environment” in which to be borrowing, as “outside of rising rates, all of the monetary stimulus we have witnessed will lead to much higher inflation.”

Overall, it’s okay to let lower rates influence your buying and borrowing decisions because at the end of the day, it’s your monthly payment that dictates whether or not you can live comfortably, says Gross.

“The lower the rate the lower the payment and that means you can afford things that you couldn’t afford before or otherwise,” Gross says.

How do you know when you should make your move and when you should sit on the sidelines?

“You need to have a need,” says Vernon. “Don’t just buy to buy.”

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Brawling Politicians: Bad for Your Portfolio?

By Richard Satran           September 7, 2012

The love fest of the political convention season ended almost as soon as it began, when the first prime-time speaker, House Speaker John Boehner, set a Republican agenda that “starts with throwing out the politician who doesn’t get it, and electing a new president who does.” Since then, the two parties have launched into a brawl in which few rules apply, and flame-throwing and facile lies are standard gear.

The loser could well be you and your stock portfolio over the next two months. Much of the heated rhetoric will consist of Republican claims that President Obama mishandled the economy or Democrats saying how they believe Mitt Romney’s programs would hurt people more.

In that kind of environment, investor confidence, already low, could sink further, say some analysts. Fund company T. Rowe Price said in its recently monthly report, “investors are focused on an apparently never-ending eurozone crisis and the campaign rhetoric emanating from both major political camps in the U.S.”

Good-time elections now history. Historically, election years have been good times for investors. But over the past five elections, the Dow has fallen an average of 3.72 percent, and declined in four out of five September-to-November election day periods.

“The past several presidential elections, and politics in general, just keep getting more nasty,” says Tyler Vernon, chief investment officer and co-founder of Biltmore Capital Advisors in Princeton, N.J. “It’s not the way things were 25 years ago. Over the past few cycles, it has become much more negative. With Democrats and Republicans, the attack ads are questioning leadership more and more. It hurts investor confidence.”

The perception that advertising is growing more negative is borne out by numerous studies. A recent one by the Wesleyan Media Project showed negative ads rising by a staggering amount—accounting for 70 percent of all presidential advertising in the early few months of this year, compared with just 9 percent in the 2008 period (although other factors, including fewer positive ads run by groups supporting Obama in this cycle, caused some of that shift.)

The big difference over the past four years is that so-called Super PACs have been freed from spending limits, or even listing contributors, and the Big Money advertising has been overwhelmingly negative, the Wesleyan study showed.

Politicians have always had a penchant for painting a negative picture of their opponents—some remember President Johnson’s vivid black-and-white television ad showing a girl picking a flower as a nuclear mushroom cloud appeared behind her, a slap against his opponent Barry Goldwater’s strident anti-Communism, or George H.W. Bush’s ads accusing Massachusetts governor Michael Dukakis of furloughing a convicted murderer, Willie Horton, who embarked on a violent crime spree.

Those negative campaigns, though memorable, were not the norm. The LBJ ad was quickly withdrawn. And ads were often about “finding prosperity,” rather than slamming the economy, Vernon says. From 1900 to 1988, the market scored nearly twice as many gains as losses in the September-through-November election span. The Dow gained in 15 of the years and declined in eight. The average September-to-election gain was 1.7 percent, exactly in line with the average gain for all two-month periods since 1900.

Impact of financial crisis. The most recent election losses can be blamed at last partly on the crash of 2008, which was an election year event, although election years of the past also had some ugly Octobers, including the 1932 pre-election period in which stocks plunged 20 percent.

But the rising importance of the economy as an election factor and a surge in negative advertising are also playing a critical role, studies show. It’s not just your imagination; things really have gotten uglier since the days of Ike and Adlai, or even since Bill Clinton and George Bush the First.

The Google Ngram tool, which measures and displays keywords in publications going back to 1800, shows a dramatic “hockey stick” upswing in the term “negative political advertising” after 1988. It also shows the steady rise of the phrase “the economy” in the national dialogue. Social issues and foreign policy have faded, in relative terms.

The issue-oriented negative ads might be even more effective at swaying voters than obvious personal attacks, suggested one study by two Rutgers professors and one from George Washington, “The Effects of Negative Campaigning, A Meta-Analytic Reassessment.” They saw significant potential for the practice to undermine public sentiment.

“When that happens, people spend less, they don’t hire, they don’t buy homes,” says Vernon.

The focus on business issues likely reflects the fact that many of the Super PAC contributors are wealthy and tend to be most interested in issues affecting their financial standing. Supreme Court rulings in 1976 and 2010 affirmed a free-speech right to spend one’s money on political campaigns without limit, freeing wealthy contributors and candidates of key post-Watergate campaign reforms. Many politicians began shunning matching funds to give them more fund-raising freedom.

What investors are doing. “A lot of people are just incredibly confused about the economy, and they are like deer caught in the headlights,” says Vernon. “The campaign promises and attacks are not helping. There is always uncertainty about elections, but it is really magnified this time. The leadership, both Democrat and Republican, acts like they are in kindergarten when it comes to getting things done. They prefer to do things that are right for the party, not for the country,” citing the near shut-down of the federal government over the disagreement on extending the debt ceiling.

Still, the market responds to influences well beyond the scope of any election, and there’s no doubt it’s been surprisingly strong in the August through early September period with the S&P returning to prerecession highs. But economic indicators, like the latest ugly jobs report, are still weak. “It’s hard to get really excited about the market when all that really gets it going is the chance for easier Fed policy,” says Vernon.

He is advising his own clients “to stay long, but stay hedged.” He advises a balanced portfolio and a long-term view. Studies in the past have shown that the market does worst during the first two years of a presidential term, and tends to do better the second two years.

While stocks have performed poorly in recent pre-November periods, bonds have been generally stronger, gaining in price and offering steady yield.

“From now to the election, bonds will be a fairly good place to be,” Vernon says. “People do not want to invest in riskier things when there is a high level of uncertainty. And there is a lot of that out there now.”

 

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Dow struggles higher as confidence data wanes

HomeBy Stephen Bernard, AP Business Writer 7/28/2010
 
NEW YORK — News that consumers are more pessimistic has put the stock market’s rally on hold.

 

Consumer confidence has waned in recent months primarily because of ongoing concern about high unemployment. With consumers not as confident as they were just a few months ago, their spending has slowed.

The Conference Board‘s report that its Consumer Confidence Index fell to 50.4 from June’s revised reading of 54.3 distracted investors from another batch of upbeat earnings reports. The market had expected the index to come in at 51.

Companies have a very different take on the economy from consumers. Chemical maker DuPont Co. on Tuesday joined the growing number of big corporations that have raised their forecasts for the future. DuPont, a component of the Dow, also easily beat analysts’ predictions for its second-quarter profit and revenue.

DuPont (DD) also raised its profit outlook for the year. Such outlooks have been a boon to the market because they indicate companies are gaining confidence in a global economic recovery.

 
WORLD STOCKS: Check global indexes
COMMODITIES: Gold, oil prices

 

Still, investors have been torn over the past few months between buying on companies’ upbeat reports and selling on government and private sector numbers that keep pointing to a slowing of the economy.

“Investors are really uncertain whether to focus on the underlying economy or earnings,” said Tyler Vernon, principal and portfolio manager at Biltmore Capital Advisors.

Earnings had investors attention the past two weeks but the occasional economic number can sometimes trump companies’ results, Vernon said. When earnings reports are done, unsettling data on jobs, housing and consumer spending will dominate trading, and may well lead to more selling.

Traders initially shrugged off the consumer confidence report, then began selling as the day wore on.

John Brady, a senior vice president at MF Global in Chicago, said there is little that’s likely to turn around consumer confidence in the near future. Consumers won’t become more optimistic until they see a drop in unemployment and clear signs that employers are hiring.

“I don’t know what turns around confidence aside from jobs growth,” Brady said.

The Dow Jones industrial average rose 12.26, or 0.12%, to 10,537.69. The Dow has surged in July, rising 7.7% during the month. The sharp gains helped push the index back into the black for the year on Monday. In the past three trading days alone, the Dow has jumped 405 points, or 4%, because of consistently strong earnings and outlooks.

Stocks declined in the broader market. The Standard & Poor’s 500 index fell 1.17, or 0.10%, to 1,113.84. The Nasdaq composite index fell 8.18, or 0.36%, to 2,288.25.

Losing stocks were ahead of gainers by 3 to 2 on the New York Stock Exchange.

But there was good economic news from overseas. Some major European banks, including UBS (UBS) and Deutsche Bank (DB), reported strong earnings as well. The results came a few days after banks across the continent were reviewed to see which would survive another economic downturn. Major European indexes rose following the earnings and another positive report on Germany‘s economy.

Stocks fell worldwide in May and June because of worries that mounting government debt across Europe would stall a global recovery and severely hurt banks across the continent. Strong earnings from U.S. and European companies over two weeks have helped to soothe those concerns.

Meanwhile, BP, embroiled by the Gulf of Mexico oil spill, is replacing its CEO Tony Hayward with American Robert Dudley. The British oil company reported a record quarterly loss and set aside $32.2 billion to cover the costs of the spill.

Bond prices fell, sending their yields higher. The yield on the 10-year Treasury note rose to 3.05% from 2.99% late Monday. That yield helps set interest rates on mortgages and other consumer loans.

Stocks got a lift Monday after a report on new home sales rose more than expected last month. The housing market has remained weak, particularly since a tax credit for home buyers expired at the end of April.

The market had some other negative economic news Tuesday, a report of a slowdown in regional manufacturing from the Richmond Federal Reserve. The Richmond Fed’s manufacturing index fell to 16 this month from 23 in June.

News on the housing market was mildly upbeat. The S&P/Case-Shiller 20-city home price index for May rose 1.3% from April. But the homebuyer’s tax credit that expired April 30 had an impact on the reading, and the report warned that the recent gains in home prices are not likely to last.

Britain‘s FTSE 100 rose 0.3%, Germany’s DAX index gained 0.2%, and France’s CAC-40 rose 0.8%. Japan’s Nikkei stock average earlier fell 0.1%.

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Stocks fall slightly on consumer confidence report – Tyler Vernon – Yahoo Finance

Tuesday July 27, 5:53 pm ET

By Stephen Bernard,AP Business Writer

Stocks fall on consumer confidence dip; economic data distracts investors from strong earnings.

NEW YORK (AP) — News that consumers are more pessimistic put the stock market’s rally on hold. Stocks fell modestly Tuesday after three days of big gains. (more…)

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Abraxis Rises 21%; Alcoa Dips

JULY 1, 2010

By DONNA KARDOS YESALAVICH

Stocks fell in the final session of the second quarter as a report on private-sector jobs weighed on sentiment and as Moody’s warned it may cut its credit rating on Spain.

Alcoa, Walt Disney and Hewlett-Packard were among the decliners.

The Dow Jones Industrial Average dropped 96.28 points, or 1%, to 9774.02. The Dow fell 3.6% this month, its second consecutive monthly drop. For the quarter, it tumbled 10%, breaking a streak of four quarterly gains and marking the measure’s worst second-quarter since 2002.

Alcoa was the Dow’s worst performer in the quarter, with a 29% drop. The aluminum company also was the Dow’s worst performer Wednesday with a slide of 28 cents, or 2.7%, to $10.06. Not far behind it, Walt Disney declined 80 cents, or 2.5%, to 31.50, and H-P slid 1.02, or 2.3%, to 43.28.

3M was the only Dow component that managed to end the session in the black, as the industrial company was lifted by a better-than-expected report on Chicago-area manufacturing. 3M eked out a gain of 50 cents, or 0.6%, to 78.99.

The Nasdaq Composite lost 25.94 points, or 1.2%, to 2109.24. The measure fell 6.6% this month and dropped 12% in the second quarter, its worst quarterly performance since the fourth quarter of 2008.

The Standard & Poor’s 500-stock index slipped 10.53 points, or 1%, to 1030.71, reaching a 2010 closing low. All of the measure’s sectors ended the session in negative territory, with the technology sector hit the hardest while industrials lagged behind.

The materials sector had the biggest percentage decline for the quarter.

Anadarko Petroleum had the biggest percentage decline among the measure’s 500 components this quarter; it slid 50%, weighed down by the April 20 explosion of the Deepwater Horizon rig and the resulting oil spill.

Wednesday’s stock declines came as a report from Automatic Data Processing showed private-sector jobs in the U.S. increased by 13,000 last month, less than the gain of 60,000 jobs expected by economists.

“Investors were really taken aback by that ADP report,” said Tyler Vernon, principal and portfolio manager at Biltmore Capital Advisors. For the government’s monthly nonfarm payrolls report due Friday, Mr. Vernon said, “investors now are expecting bad news and they’re just [hoping] for less-bad news. The psyche has really changed from where it was just a couple weeks ago.”

Also weighing on market sentiment, Moody’s Investors Service put Spain’s Aaa credit rating on review for a possible downgrade, citing flagging economic prospects, challenging fiscal targets and rising funding costs.

Meanwhjle, the Securities and Exchange Commission will seek comments on a proposal to expand a single-stock “circuit breaker” pilot program to stocks within the Russell 1000 index and certain exchange-traded funds.

Celgene (Nasdaq) fell 2.42, or 4.6%, to 50.82, after the company agreed to acquire Abraxis BioScience for at least $2.9 billion in cash and stock, broadening its cancer-drug portfolio. Abraxis (Nasdaq), whose primary treatment is Abraxane, a breast-cancer injection approved in the U.S. and Europe, surged 12.89, or 21%, to 74.20.

General Mills fell 1.38, or 3.7%, to 35.52, after the packaged-food company posted a 41% drop in fiscal fourth-quarter profit on higher costs and lower sales. The company also forecast earnings for the new year below analysts’ projections. The results also weighed on fellow packaged-food company Kellogg, which slid 1.45, or 2.8%, to 50.30.

Ford Motor climbed 20 cents, or 2%, to 10.08, after the auto maker said it is reducing its debt by more than $4 billion, a sign the company remains confident in its own turnaround despite a softening car market in the U.S.

BP‘s American depositary receipts rose 1.21, or 4.4%, to 28.88, as speculation of potential deal activity had investors viewing the oil company’s assets, and possibly the company as a whole, as an acquisition target.

Russian oil company TNK-BP, which is jointly owned by BP and a group of Russian businessmen, said it would be interested in buying assets from its U.K. shareholder as a platform for international expansion.

Monsanto slipped 1.12, or 2.4%, to 46.22. The fertilizer company’s fiscal third-quarter earnings plunged 45% on restructuring charges and reduced herbicide sales. It also forecast per-share results this quarter, excluding restructuring charges, between a nine-cent loss and an 11-cent profit.

Philips-Van Heusen edged up 52 cents, or 1.1%, to 46.27. The apparel maker said it would top its fiscal second-quarter forecast if current trends continue, including a 12% rise in same-stores sales at its U.S. outlet operations.

Continental Airlines rose 68 cents, or 3.2%, to 22, and UAL (Nasdaq) climbed 57 cents, or 2.9%, to 20.56. The airlines said in a filing that they will hold a “kickoff meeting” with the Federal Aviation Administration on July 9 to outline the process for securing a “single operator certificate” for their planned merger, with a formal combination targeted for the first quarter of 2012.

American depositary receipts of Brazilian meatpacker BRF-Brasil Foods fell 87 cents, or 6.2%, to 13.26, after the Brazilian Finance Ministry’s antitrust division recommended approval of the merger of Perdigao and Sadia, which created BRF, with restrictions that could mean the sale of some assets.

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US Stocks Fall Wednesday And For 2Q, Snap 4-Quarter Winning Streak

By Donna Kardos

June 30, 2010, 4:58 p.m. EDT

NEW YORK (MarketWatch) — U.S. stocks fell Wednesday in the final session of the second quarter as a report on private-sector jobs disappointed investors and Moody’s warned that it may cut its credit rating on Spain. Alcoa, Walt Disney and Hewlett-Packard were among the decliners.

The Dow Jones Industrial Average dropped 96.28 points, or 0.98%, to 9774.02. The Dow fell 3.58% this month, its second-consecutive monthly drop. For the quarter, it tumbled 9.97%, breaking a streak of four quarterly gains and marking the measure’s worst second-quarter since 2002.

Alcoa was the Dow’s worst performer in the quarter with a 29% drop. The aluminum giant was also the Dow’s worst performer Wednesday with a slide of 28 cents, or 2.7%, to 10.06. Not far behind it, Walt Disney declined 80 cents, or 2.5%, to 31.50, and H-P slid 1.02, or 2.3%, to 43.28.

3M was the only Dow component that managed to end Wednesday’s session in the black, as the industrial giant was lifted by a better-than-expected report on Chicago-area manufacturing. 3M eked out a gain of 50 cents, or 0.6%, to 78.99.

The Nasdaq Composite lost 25.94, or 1.21%, to 2109.24. The measure fell 6.55% this month and dropped 12.04% in the second quarter, its worst quarterly performance since the fourth quarter of 2008.

The Standard & Poor’s 500 slipped 10.53, or 1.01%, to 1030.71, on Wednesday, reaching a fresh 2010 closing low. All of the measure’s sectors ended the session in negative territory, with the technology sector hit the hardest while industrials lagged.

For June, the S&P 500 fell 5.39%. The consumer-discretionary sector was the S&P 500’s worst performer this month.

The materials sector had the biggest percentage decline for the quarter. Anadarko Petroleum had the biggest percentage decline among the measure’s 500 components this quarter; it slid 50%, weighed down by the April 20 explosion of the Deepwater Horizon rig and the resulting oil spill.

Wednesday’s stock declines came as a report from Automatic Data Processing showed private-sector jobs in the U.S. increased by 13,000 last month, less than the gain of 60,000 jobs expected by economists.

“Investors were really taken aback by that ADP report,” said Tyler Vernon, principal and portfolio manager at Biltmore Capital Advisors. For the government’s monthly nonfarm payrolls report due Friday, Vernon said, “investors now are expecting bad news and they’re just [hoping] for less-bad news. The psyche has really changed from where it was just a couple weeks ago.”

Also weighing on market sentiment, Moody’s Investors Service put Spain’s Aaa credit rating on review for a possible downgrade, citing flagging economic prospects, challenging fiscal targets and rising funding costs.

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Stocks: Best Week in a Year – Tyler Vernon – CNNMoney.com

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By Alexandra Twin, senior writer

July 9, 2010: 6:59 PM ET

NEW YORK (CNNMoney.com) — Stocks rallied Friday, finding momentum at the end of a choppy session ahead of the first wave of quarterly corporate results due out next week. (more…)

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