Here is a look at more of Thursday's top business stories:
Mortgages plunge to record lows
WASHINGTON, May 22 (UPI) -- Freddie Mac said the rate on 30-year fixed mortgage dropped to a record low 5.34 percent during the latest reporting week from 5.45 percent a week earlier and 6.81 percent during the same period last year.
Freddie Mac, which adjusts mortgage rates according to prices that mortgage-backed securities bring in the secondary bond market, said fees and points for the popular 30-year mortgage increased to 0.7 percent from 0.6 percent.
The average rate for 15-year fixed mortgages this week fell to 4.73 percent from 4.84 percent a week ago and 6.28 percent during the same period last year. Fees and points for the 15-year mortgage were unchanged at 0.7 percent.
The rate for 1-year treasury-indexed adjustable rate mortgages fell to 3.61 percent this week from an average of 3.67 percent in the prior week. Fees and points for ARMS increased to 0.7 percent from 0.6 percent. At this time last year, the one-year ARM averaged 4.85 percent.
Mortgage rates climbed to a record 18.66 percent in October 1981 and have been hovering between the near record low levels since January.
Frank Nothaft, Freddie Mac chief economist said, "Long-term bond yields dropped leading up to Federal Reserve Chairman (Alan) Greenspan's testimony to Congress over speculation of what he may say about deflation and over the possibility of the Federal Reserve buying long-term Treasury bonds to fight it.
"Consequently, interest rates for fixed-rate mortgages and 1-year ARMs fell to another record low this week," Nothaft said.
"With mortgage rates continuing to slip, a new wave of refinancing has appeared. According to the Mortgage Bankers Association of America, applications for refinance jumped 15 percent last week, near the record high set in March. And according to Freddie Mac's quarterly refinance review, the average age of a refinanced loan fell to 1.9 years in the first quarter of this year," the economist added.
The Federal Home Loan Mortgage Corporation, which has been tracking rates since 1971, surveys 125 banks, savings and loans and mortgage lenders, to calculate rates.
Freddie Mac is a corporation chartered by Congress that buys mortgages from lenders and packages them into securities for investors.
Silicon Graphics cuts staff
MOUNTAIN VIEW, Calif., May 22 (UPI) -- Silicon Graphics Inc. said it will cut 10 percent of its workforce in an effort to match expenses with revenue and accelerate its return to profitability.
The company said the reduction of about 400 jobs will cut its quarterly expenses by about $10 million, or $40 million a year, starting in its first fiscal quarter ending Sept. 26.
"Despite encouraging recent developments including the growth of SGI's defense sector business and the early success of the Altix line of superclusters and servers, our revenue performance has been lower than expected, reflecting a difficult market for large industrial systems sales," the company said.
Silicon Graphics will post a charge of about $15 million to $20 million in the current fourth quarter, mostly to cover severance charges.
In the year-ago fourth quarter, the maker of interactive computer systems posted a loss of $24.6 million, or 12 cents a share.
Cost Plus posts higher results
OAKLAND, Calif., May 22 (UPI) -- Cost Plus Inc. said its first-quarter net income for the period ended May 3 jumped to $2.56 million, or 12 cents a share, from $1.67 million, or 8 cents a share during the same period last year.
Sales at the retailer rose to $159.21 million from $134.35 million a year ago.
Cost Plus Inc. beat Wall Street's consensus earnings estimate of 11 cents a share and revenue expectation of $158.5 million.
Costs Plus said its first-quarter same-store sales rose 3 percent from a year ago and its total sales were helped by the opening of six new locations. The retailer said it posted sales growth in the home furnishings and consumable products segments and growth was consistent throughout the United States.
Cost Plus Chairman, President and Chief Executive Murray Dashe said that the company's increased gross profit rate is the result of leverage gained from infrastructure improvements and merchandise margin gains. He also said he expects the benefit from infrastructure improvements to continue to have a positive impact on operating income ratios.
Cost Plus expects its second-quarter earnings to increase to $2.7 million, or 12 cents a share, from $2.2 million, of 10 cents a share, a year ago. The anticipated figure meets Wall Street's consensus earnings forecast.
The guidance assumes total sales increases to $162.2 million from $138.3 million a year ago, helped by the opening of seven locations. A Thomson First Call survey of analysts yielded a mean sales outlook of $160.9 million for the period. Cost Plus anticipates same-store sales growth of about 3 percent for the second quarter.
Cost Plus also raised its earnings per share guidance for fiscal 2004 to $1.53 from $1.50. Wall Street expects the company's earnings for the year ending in February to increase to $1.52 from $1.24 a year ago.
The company's increased 2004 guidance assumes same-store sales growth of 3 percent and 31 store openings, while the prior expectation was based on a similar same-store sales trend and 29 new locations.
Cost Plus increased its total sales guidance for the year to $814.3 million from the prior expectation of $809 million. First Call expects the company's sales to increase to $813.5 million from $692.3 million a year ago.
As of May 22, the company operated 184 stores in 23 states.
Louisiana-Pacific to close Montana mill
PORTLAND, Ore., May 22 (UPI) -- Louisiana-Pacific Corp. said it has reached an agreement to sell 43,500 acres of timberland in Southeastern Texas to an undisclosed buyer for about $30.5 million, or $700 an acre.
The building materials supplier also said it would close a Montana mill, citing dismal pricing for lumber products, and said it would take a related $1.5 million charge.
Louisiana-Pacific said it expects to conclude the latest transaction by the end of October, adding that sales of some additional timberlands are on schedule.
About a year ago, the company said it would sell 935,000 acres of timberlands along with its plywood, industrial panels and lumber businesses in order to reduce debt. Louisiana-Pacific expected proceeds of $600 million to $700 million from the sales, to be completed some time in 2003.
In fiscal 2002, the company posted a loss from continuing operations of $21.5 million, or 21 cents a share, on revenue of $1.94 billion.
Wells Fargo buys Two Rivers Corp.
GRAND JUNCTION, Colo., May 22 (UPI) -- Wells Fargo & Co. said it has signed a definitive agreement to acquire privately held bank holding company Two Rivers Corp. for undisclosed terms.
Wells Fargo said Two Rivers owns the Bank of Grand Junction, which has three locations and about $75 million in assets.
Wells Fargo has about 5,800 North American locations and controls assets of $ 369.67 billion.
The companies expect the deal to close in the third quarter, pending Two Rivers shareholder and regulatory approval.
At a yet undetermined time, the Bank of Junction branches will be incorporated into Well Fargo's computer systems, and they will be rebranded as Wells Fargo locations.
The Bank of Grand Junction President and Chief Executive Bob Johnson will join Wells Fargo following the deal.
