Home Foreclosures and Durable Orders Rise

Sarla Buch
28 May, 2009
New York City

U.S. stocks edged lower after mortgage delinquencies rise to a record high. Crude oil and natural gas prices surged after the release of weekly inventories data. Initial jobless claims in last week declined 13,000. Durable goods orders increased in April.

[R][11:45 AM New York – U.S. stocks edged lower after mortgage delinquencies rise to a record high. Crude oil and natural gas prices surged after the release of weekly inventories data. Initial jobless claims in last week declined 13,000. Durable goods orders increased in April.[/R]

U.S. stocks edged lower after durable goods orders and weekly jobless claims were released.

Durable goods orders in April increased 1.9% to $161.5 billion after declining 2.1% in March. The orders excluding volatile transportation related orders increased 0.8% and excluding defense increased 1%. Non-defense capital goods orders decreased 2%.

Mortgage rate for 30-year loans increased to 4.81% and 1-year ARM increased to 6.55%.

Seasonally adjusted weekly jobless claims in the week ending May 23 declined 13,000 to 623,000. The prior week’s claims were revised to 636,000. Since October 5.1 million people have filed for unemployment claims.

Commercial crude oil inventories at the end of last week declined 5.4 million to 363.1 million barrels. Gasoline inventories declined 0.6 million barrels and distillate fuel inventories increased 0.3 million barrels.

Crude oil prices increased 2% or $1.26 to $64.7 and natural gas surged 7% to $3.89.

Mortgage Defaults at Record

Mortgage Bankers Association’s index that tracks mortgage application volume declined 14% in the week ending on May 22 from the previous week and fell 28.5% from a year ago period.

The industry association also said that delinquencies on mortgages are on the rise. A record 12% of borrowers are behind on their payments or in foreclosure according to the MBA.

Delinquent rate at the end of the first quarter increased to 9.12% from 7.88% at the end of the fourth quarter.

Loans entering in foreclosures increased to 1.37% of all loans outstanding. Foreclosure and delinquency rates are at record since record keeping began in 1972.

Total number of homes entering in foreclosure process increased to 3.85% of all mortgages, up from 3.3% at the end of the fourth quarter last year.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 12.62 or 0.13% to 9,451.39,ASX 200 index in Australia decreased 45.40 or 1.19% closed to 3,755.70. The KL Composite index in Malaysia lower 6.44 or 0.61% closed to 1,041.24.The Markets of Hong Kong and China were closed today.

The Kospi Index in South Korea increased 30.15 or 2.21% to close at 1,392.17.SET index in Thailand closed higher 0.02 or 0.00% to 555.43 and JSE Index in Indonesia increased 10.03 or 0.53% closed to 1,902.88. The Sensex index in India increased 186.37 or 1.32% closed to 14,296.01.

Europe Markets Review

In London FTSE 100 Index traded lower 48.11 or 1.09% to 4,368.12, in Paris CAC 40 Index decreased 31.10 or 0.94% to 3,263.76 and in Frankfurt DAX index traded lower 51.47 or 1.03% to 4,949.30.In Zurich trading SMI decreased 60.27 or 1.11% to 5,359.15.