New-home sales point to recovery
New-home sales point to recovery
U.S. sales of new homes rose in March to a seasonally adjusted annual rate of 417,000. The increase added to evidence of a sustained housing recovery at the start of the spring buying season.
The Commerce Department said Tuesday that sales of new homes increased 1.5 percent. The gain brought the level higher than February’s pace of 411,000, though below January’s 445,000 — the fastest pace since July 2008.
New-home sales are still below the 700,000 pace considered healthy by most economists, but the pace has increased 18.5 percent from 352,000 a year ago.
A limited supply of both new and previously occupied homes also has helped boost prices.
The inventory of new homes for sale increased 2 percent in March, to 153,000, the second straight gain. The median price of a new home rose to $247,000 in March. That’s 3 percent higher than a year ago.
The March sales gain came from a 20.6 percent increase in the Northeast and a 19.4 percent rise in the South. Sales fell 20.9 percent in the West, where problems of supply have hampered home buying. Sales were down 12.1 percent in the Midwest.
— Associated Press
Argentina demands proof of bribery
Argentina wants the U.S. Securities and Exchange Commission to name names and provide proof that Ralph Lauren bribed customs officials for years to allow its products into the South American country.
Tax chief Ricardo Echegaray came out swinging Tuesday after the U.S. government announced that the designer label had cooperated with authorities and paid a fine of nearly $1.6 million after admitting that its now-closed Argentine subsidiary violated the U.S. Foreign Corrupt Practices Act.
Echegaray blamed private customs brokers and former Ralph Lauren executives for any violations and suspended their tax ID numbers, which are necessary to do business legally in Argentina.
But he also demanded that the SEC identify which Argentine officials allegedly took the bribes, which the SEC said totaled nearly $600,000 over four years until they were discovered in 2010. And Echegaray’s AFIP tax agency put out a statement that called it a lie designed to cover up how Ralph Lauren emptied its subsidiary before abandoning Argentina.
The U.S. Embassy on Tuesday referred all questions to the SEC and the Justice Department, which had no comment on Echegaray’s requests and allegations.
— Associated Press
Also in Business
●AT&T, the largest U.S. phone company, posted first-quarter sales that missed estimates, dragged down by a lingering slump at its landline business. Sales dropped 1.5 percent, to $31.4 billion, Dallas-based AT&T said Tuesday. Analysts on average had projected $31.7 billion. Earnings climbed to 64 cents a share, excluding some items, matching the average estimate. AT&T’s landline revenue declined 1.8 percent, to $14.7 billion, hurt by sluggish demand for traditional phone connections, especially among business customers. The company’s wireless carrier added 296,000 contract customers, more than expected. The new customers brought a surge in subsidy payments, crimping earnings. The shares fell 2 percent to $38.20 in late trading after the earnings announcement.
●Jon Corzine was sued by the bankruptcy trustee liquidating MF Global Holdings, who accused the former chief executive of negligently pursuing a high-risk business strategy that culminated in the commodities brokerage’s destruction. The trustee, Louis Freeh, said in the lawsuit that Corzine and two top deputies breached their fiduciary duties to shareholders and failed to act in good faith, wiping out more than $1 billion in value by the time of MF Global’s Oct. 31, 2011, bankruptcy. The lawsuit seeks unspecified damages that could be used to pay MF Global creditors.
●Netflix, vanquishing Wall Street skepticism about its growth prospects, became the best-performing stock in the Standard & Poor’s 500-stock index after signing up more than 2 million new U.S. customers. Netflix soared 24 percent Tuesday after U.S. subscriber gains beat analysts’ estimates and the Los Gatos, Calif.-based online video service added 1 million internationally. The stock’s rise of 134 percent this year is the highest among S&P 500 companies. Netflix rose to $216.99 at the close in New York, the highest since September 2011, after reporting first-quarter results late Monday.
●Yum Brands, owner of the KFC and Pizza Hut dining chains, posted first-quarter profit that topped analysts’ estimates as new menu items helped Taco Bell’s domestic sales. Net income fell 26 percent, to $337 million, or 72 cents a share, from $458 million, or 96 cents, a year earlier, the Louisville-based company said Tuesday. Chief executive David Novak is trying to lure U.S. consumers with new food at Taco Bell as the company’s China business struggles to recover from concerns about chicken quality. Sales at U.S. stores open at least 12 months rose 2 percent in the quarter.
●A judge said New York City can test its “e-hail” program allowing people to hail yellow cabs via their smartphones. A Manhattan judge dismissed a lawsuit over the program Tuesday and lifted an order that had temporarily stopped it. The city Taxi and Limousine Commission agreed in December to test the idea for a year. Livery cab owners sued, saying that the program would violate a law that prohibits cab drivers from refusing passengers without justifiable grounds. The judge said that the e-hail plan might actually combat discrimination in selecting passengers, since drivers won’t be able to see their fares when accepting them.
— From news services
●8:30 a.m.: Durable goods orders for March.
●Earnings: Boeing, Ford, General Dynamics, Northrop Grumman, Procter & Gamble, Sprint Nextel.