Keeping you updated on the market!

For the week of
October 6, 2008

The number of Americans signing contracts to purchase previously owned homes probably fell 1.1 percent in August, according to the median estimate in a Bloomberg News survey ahead of Oct. 8 figures from the National Association of Realtors. The drop in oil prices caused imports to fall, narrowing the trade gap, a report two days later may show.
Job losses swelled last month, stock markets tumbled as commercial and investment banks collapsed, and money-market rates jumped to records as the credit crisis intensified. Passage of the government’s $700 billion rescue plan failed to ease concern the economy will falter, signaling the Federal Reserve may need to lower interest rates.

Home Prices
A private report last week showed home prices in 20 U.S. cities declined at the fastest pace on record in the year ended July. The S&P/Case-Shiller home-price index dropped 16.3 percent from July 2007.
Declining home prices threaten to throw more properties into foreclosure, prompting banks to keep reining in credit.
KB Home, the fifth-largest U.S. homebuilder by revenue, last month reported wider than forecast third-quarter losses after sales plummeted 56 percent compared with the same period a year earlier.
Congress last week passed the administration’s rescue package that lets the government buy troubled assets from financial institutions damaged by the subprime crisis. President George W. Bush signed the measure into law Oct. 3.

Payrolls Drop
Employers cut 159,000 workers from payrolls in September, the most since 2003, and the unemployment rate was unchanged at a five-year high of 6.1 percent, the Labor Department said last week.
Odds the central bank will lower its benchmark rate, currently at 2 percent, by at least a half percentage point between now and its next meeting on Oct. 29 rose to 100 percent on Oct. 3 compared with no chance a month earlier.
The cost of a barrel of crude oil averaged $119.77 in August, down from $132.04 in July. Prices have retreated further since then, dropping below $92 a barrel last week.

Exports, Growth
While the decline in the trade gap reflects forecasts for a drop in oil imports, economists will also be looking for evidence that American exports are starting to suffer as economies in the euro zone and Japan falter.
Less inflation may give Fed officials scope to lower interest rates to alleviate the credit crisis that brought down Lehman Brothers Holdings Inc., American International Group Inc. and Washington Mutual Inc.