LITTLE ROCK — QUOTE OF THE DAY
“If the recovery seems to be faltering, we have to at least review our options.”
Ben Bernanke,
Federal Reserve Chairman Article, 1D
Mortgage applications climb 7.6%
NEW YORK - Applications for home loans rose last week as rates on 30-year and 15-year fixed-rate loans sank to the lowest levels on the survey’s record.
The Mortgage Bankers Association said Wednesday that overall applications increased nearly 7.6 percent from a week earlier. That incorporates an adjustment for the Independence Day holiday.
Applications to refinance home loans climbed 8.6 percent. Applications taken out to purchase homes rose 3.4 percent, fueled by an 8 percent rise in government purchase applications.
Refinance applications made up nearly 79.4 percent of total applications, the highest since April of last year.
Mortgage rates have fallen since mid-April after investors, concerned over European debt problems and the health of the global economy, have poured money into the safety of U.S. Treasury bonds. That has caused the yields on those bonds to fall. Long-term fixed mortgage rates tend to track those yields.
The average rate for a 30-year fixed loan fell to 4.59 percent last week and the rate for a 15-year fixed loan dropped to 4.05 percent. Both were the lowest rates recorded in the Mortgage Bankers Association’s survey, which has been conducted since 1990.
The survey covers more than 50 percent of all applications nationwide.
Merkel says bank stress tests credible
BERLIN - German Chancellor Angela Merkel sought to counter skepticism about Europe’s bank stress tests ahead of their publication, saying Wednesday that the scenarios against which banks’ strength is to be tested will be realistic enough to be credible.
The results on 91 banks across the continent, measuring how they would perform if the economy worsens, are to be published Friday. The exercise is meant to lift the cloud of uncertainty surrounding their potential losses from the debt crisis, but some analysts have questioned whether the tests will be tough enough to make people confident in the results.
Merkel noted that the tests come after European leaders agreed earlier this year on a rescue package for debt laden Greece and on another of nearly $1 trillion for the eurozone as a whole. Those packages backstop governments’ ability to pay off the bonds held by banks.
U.S. stress tests last year helped to shore up confidence after 10 of 19 banks failed tests and were told they needed to raise about $75 billion.
Most of the 91 European banks are expected to pass, but analysts say some must fail for the tests to have any credibility.
Auto-parts plant strike ends in China
TOKYO - Production at a Japanese auto-parts plant in southern China returned to normal late Wednesday after the company agreed to raise striking workers’ wages in the latest labor dispute to hit a foreign company in the country.
Some 300 workers walked off the job at Omron Corp.’s factory in Guangzhou early Wednesday, forcing the company to halt some production.
“The strike is over as the two sides agreed on wage conditions. The striking workers agreed to return to work,” said Omron spokesman Tsuyoshi Numata from the company’s headquarters in Kyoto, western Japan.
Numata declined to give details of the pay increases or reveal workers’ current salaries. Workers were demanding Omron raise their monthly salaries by $74.
The Chinese plant, which makes auto parts including window switches, operates 24 hours a day. Numata said production at the factory, which employs 800 workers, returned to full capacity late Wednesday.
Numata wouldn’t say which automakers the company supplies with parts.
Employees at dozens of foreign factories in China have walked out in recent months for higher pay. China froze government-mandated minimum wages in 2008 to help companies ride out the global crisis but now that the economy and exports are rebounding, workers want a share of the higher revenue.
French air traffic controllers strike
PARIS - Airlines have cut flights in France as a strike by air traffic controllers fearful of a plan to unify European skies went into full force Wednesday.
The Civil Aviation Authority said the effects of the strike were blunted, however, after two unions dropped out of the action. It said Wednesday’s air traffic was “more fluid” than expected, with few delays.
The Civil Aviation Authority had asked airlines to cancel one of every two flights at Orly airport, south of the French capital, and one out of five flights at Charles de Gaulle, the main Paris airport. While only 50 percent of flights at Orly were operating, 90 percent of flights were assured at Charles de Gaulle airport, civil aviation spokesman Eric Heraud said in a statement.
The strike, which began Tuesday night, went into full force Wednesday and was to last until about 11 p.m. CDT Wednesday.
National carrier Air France has said its long-haul flights aren’t affected.
Air traffic controllers fear that the Single European Sky concept meant to ensure greater efficiency and deal with projected traffic increases could cost jobs. Under the plan, the 27 air traffic systems now operating in the European Union would be reduced to nine hubs.
FAA: Inspect Boeing 767s for cracks
WASHINGTON - U.S. airlines must inspect more than 100 Boeing 767 airliners more often than previously required to look for cracks that could cause the engines to fall off, the Federal Aviation Administration ordered Wednesday.
The cracks can occur in the pylons that attach engines to wings. The problem came to light last month when American Airlines found cracks in at least two 767s during normal maintenance.
The FAA safety order affects 138 planes registered in the United States, out of a global fleet of 314 planes. Aviation officials in other countries usually follow the FAA’s lead on safety of U.S.-manufactured planes.
The order only applies to 767s that have the original pylon design. Boeing changed the design after the problem first became known.
FAA issued a safety order for the planes in 2005 requiring inspections for cracks every 1,500 flights. The new order accelerates that schedule to every 400 flights or every 90 days, whichever is later.
Business, Pages 26 on 07/22/2010