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Jan. 31, 2013 at 7:06 PM
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Market rally stalls after weak jobs report

NEW YORK, Jan. 31 (UPI) -- U.S. stock indexes closed lower Thursday after the Labor Department said first-time unemployment benefit claims rose in the week that ended Saturday.

With a four-week stock rally on the line, the Dow Jones industrial average dropped 0.36 percent or 49.84 points to 13,860.58 by close of trading. The Nasdaq composite of tech-oriented stocks shed 0.18 points or 0.01 percent to 3,142.13. The Standard and Poor's 500 index lost 3.85 points or 0.26 percent to 1,498.11.

On the New York Stock Exchange, 1,575 stocks advanced and 1,463 declined on a volume of 3.9 billion shares traded.

The 10-year treasury note rose 1/32 to yield 1.99 percent.

Against the dollar, the euro rose to $1.3586 from Wednesday's $1.3567. The dollar rose to 91.76 yen from Wednesday's 91.09 yen.

In Tokyo, the Nikkei 225 index added 0.22 percent, 24.71 points, to 11,138.66.

In London, the FTSE 100 index shed 0.73 percent, 46.23 points, to 6,276.88.

AB InBev to contest merger lawsuit

WASHINGTON, Jan. 31 (UPI) -- Beverage giant AB InBev said Thursday it would contest the U.S. Justice Department's lawsuit that aims to block the completion of a merger with Grupo Modelo.

In a terse statement, AB InBev, the multinational conglomerate that includes the former Anheuser-Busch brewer, said the department's proposal to block the merger "is inconsistent with the law, the facts and the reality of the market place."

"We remain confident in our position, and we intend to vigorously contest the DOJ's action in federal court," the company said.

AB InBev noted that its previous expectation of completing the merger in the first quarter was no longer likely.

In a complaint filed Thursday, that spells out its fears that the merger would create one company with too much control of the marketplace, the Justice Department said, "The U.S. beer industry – which serves tens of millions of consumers at all levels of income – is highly concentrated with just two firms accounting for approximately 65 percent of all sales nationwide."

As it stands, Anheuser-Busch controls 39 percent of the U.S. market, while MillerCoors controls 26 percent, the department said. Modelo, based in Mexico, controls 7 percent and Heineken USA Inc. controls 6 percent. The remaining 22 percent is controlled by a variety of smaller brewers.

Already, AB InBev sets the pace for market prices, the complaint filed in U.S. federal court in Washington said.

As it is, AB InBev "typically initiates annual price increases in various markets with the expectation that MillerCoors' prices will follow. And they frequently do," the complaint says.

Poll: Little change in labor market in '12

PRINCETON, N.J., Jan. 31 (UPI) -- The percentage of full-time workers among the adult U.S. population has changed little during the past 12 months, researchers at Gallup said Thursday.

The so-called payroll to population employment rate, also called the P2P rate, measures how many people 18 years old or older are working 30 hours or more per week for one employer.

Gallup said the P2P rate in January was 43.7 percent, down from 44.4 percent in December, and virtually unchanged from January 2012, when it was 43.6 percent.

Gallup said its underemployment rate, which combines the unemployment rate with the percentage of workers working part time but looking for full time work, was 17.4 percent in January -- a slight gain from December, when the underemployment rate was 17.1 percent, but a drop from January 2012, when the rate was 18.7 percent.

The percentage of workers with part-time jobs who wanted full-time work was 9.6 percent in January, up from 9.4 percent in December, but down from 10.1 percent in January 2012.

Gallup said gains in the unemployment rate were dependent on self-employment options and on workers finding part-time jobs.

"While these undoubtedly qualify as jobs and are better than unemployment, Gallup's global employment research has shown that these aren't the types of jobs that are linked to (a) higher gross domestic product," Gallup said.

Gallup said its economic confidence index was at its highest reading in the past five years. With the stock market in a recent rally and Congress pushing ahead on budget issues, there is reason to be optimistic the labor market would improve in 2013, Gallup said.

Gallup said its figures were based on more than 27,000 interviews conducted Jan. 2-29. The margin of error is 1 percentage point.

Mortgage rates climb in week

WASHINGTON, Jan. 31 (UPI) -- Long-term U.S. mortgage rates rose in the week that ended Thursday, with the incline defining a new trend, the Federal Home Loan Mortgage Corp. said.

In the week, 30-year interest rates hit a high unseen since September. Coming off of a historic low reached Nov. 21. However, rates are perceptibly starting "to trend higher amid a growing economy led in part by the recovering housing market," Freddie Mac said.

In the week, the average 30-year fixed-rate mortgage interest rate rose from 3.42 percent to 3.53 percent with an average 0.7 point, Freddie Mac said.

One point is equal to 1 percent of the amount of the loan and is typically paid up front. It includes a corresponding discount on the loan's long-term interest rates.

Interest rates for 30-year, fixed-rate loans were at 3.87 percent in the same week a year earlier.

Interest rates for 15-year fixed rate loans rose from 2.71 percent to 2.81 percent with an average 0.7 points. The average rate for 15-year loans with fixed rates stood at 3.14 percent a year earlier.

Rates for five-year adjustable rate mortgages climbed from 2.67 percent to 2.7 percent with an average of 0.6 points. A year earlier, rates for these loans averaged 2.8 percent.

One-year adjustable rate mortgages using 10-year bonds as a benchmark averaged 2.59 percent with 0.5 points in the week, up from 2.57 percent in the previous week.

One-year Treasury-indexed loans were at 2.76 percent in the same week of 2012.

"Mortgage rates continued to trend upwards this week amid a growing economy led in part by the recovering housing market. For instance, new home sales totaled 367,000 in 2012, the most in three years and reflected the first annual increase in seven years," said Frank Nothaft, vice president and chief economist at Freddie Mac.

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