30-year mortgage rate 4.10%, year's low
WASHINGTON -- Average long-term U.S. mortgage rates declined this week, with the 30-year loan rate hitting its low for the year.
Mortgage company Freddie Mac, the Federal Home Loan Mortgage Corp., said the nationwide average for a 30-year mortgage fell to 4.10 percent from 4.12 percent last week. The average for a 15-year mortgage, a popular choice for people who are refinancing, slipped to 3.23 percent from 3.24 percent.
Mortgage rates have fallen in recent weeks after climbing last summer when the Federal Reserve began talking about reducing the monthly bond purchases it was making to keep long-term borrowing rates low.
Mortgage rates often follow the yield on the 10-year Treasury note. The 10-year note traded at 2.43 percent Wednesday, close to its low for the year of 2.41 percent.
-- The Associated Press
TVA to retire Memphis coal plant, go gas
MEMPHIS -- The Tennessee Valley Authority's board voted Thursday to retire the coal-fired Allen Fossil Plant in Memphis and replace it with a natural-gas facility, marking another step by the nation's largest utility to reduce its reliance on coal.
Chief Executive Officer Bill Johnson said the $975 million, 1,000-megawatt natural-gas fired plant will significantly cut emissions of carbon dioxide and gases that cause smog while providing power to about 580,000 homes.
The 55-year-old Allen coal plant generates about 4.8 billion kilowatt-hours of electricity a year, enough for 340,000 homes. The TVA said the plant consumes about 7,200 tons of coal daily.
"This natural-gas plant will improve air quality in Memphis, and that is important to the city's vitality and future economic development," Johnson said at a board meeting in Knoxville.
-- The Associated Press
American's jets with first class dwindle
Cabins with three classes of service on international jets, once a hallmark of passenger pampering, are dwindling at the world's largest carrier.
Waning customer interest in the costliest tickets prompted American Airlines to drop first class as it adds seats to its 47 long-haul Boeing Co. 777-200s. The aircraft will get new lie-flat business seats -- plusher than coach but lacking first-class flourishes such as pajamas and slippers.
"We're responding to what demand is," said Casey Norton, an American spokesman. "We've looked at what the demand level is for business and also what we need in the main cabin as well. That's where we think we've hit the sweet spot."
The changes will leave American with international three-class service -- first, business and economy -- only on the 777-300ER, the carrier's biggest aircraft. Fort Worth-based American has 14 of those planes flying on some of its most lucrative overseas routes, such as Miami-Sao Paulo, while using the 777-200 for other city pairs including Chicago-Beijing.
Upgrading business cabins is a bet on making money by selling more of those premium seats than costlier first-class fares. A refundable, round-trip, first-class ticket for a Chicago-Beijing trip costs almost double the price of a comparable business-class seat, and four times as much as a nonrefundable business ticket, according to American's website.
-- Bloomberg News
Sears loss widens as sales keep sinking
Sears Holdings Corp., the retailer controlled by billionaire hedge-fund manager Edward Lampert, posted a wider second-quarter loss as sales decreased for the 30th straight quarter.
The net loss expanded to $573 million, or $5.39 a share, from $194 million, or $1.83, a year earlier, as sales fell 9.7 percent, the Hoffman Estates, Ill.-based company said Thursday in a statement. The shares fell $2.57, or 7.2 percent, to close Thursday at $33.38.
Lampert, who is chief executive officer, called the results "unacceptable" in the statement.
Sears will reduce costs, close stores and improve pricing and promotions, among other steps, Lampert said. He has been selling and spinning off assets to raise cash as he works to bolster the retailer's digital and rewards programs. Loyalty-program members generated 73 percent of eligible sales in the quarter.
Sales at stores open at least a year fell 1.7 percent at Kmart and rose 0.1 percent at Sears. Online sales climbed 18 percent.
-- Bloomberg News
Hostess closing Twinkie's birth bakery
CHICAGO -- About 400 people will lose their jobs and a piece of American baking history will shut down when Hostess Brands closes the suburban Chicago bakery where the Twinkie was invented.
Hostess said Wednesday that it will close the bakery in Schiller Park in October. The bakery reopened a little more than a year ago after Hostess' 2012 bankruptcy.
Donald Woods is president of the Bakery, Confectionery, Tobacco workers and Grain Millers International Union Local 1. He told the Chicago Sun-Times that workers were shocked by the news.
Hostess Brands Chief Executive Officer Bill Toler said the company is closing the plant as it tries to improve efficiency.
The Twinkie was invented in Schiller Park in 1930 by a bakery manager looking for uses for idle shortcake pans.
-- The Associated Press
Georgia films up; California checks bait
ATLANTA -- California lawmakers are looking at quadrupling their incentives for film and television production to keep jobs from fleeing to states and countries that provide richer perks to the movie business.
The move is a direct response to places such as Georgia, which has seen a fivefold increase in production spending compared with 2008, when the Peach State put in place some of the most lucrative film-incentive programs in the country. The state said production spending was $1.4 billion in fiscal 2014 and the industry employs 23,500 people.
Gov. Nathan Deal and other top Georgia lawmakers have hailed the incentives as job creators, but critics say the tax credits are a costly giveaway to a rich industry and create mainly lower-wage jobs.
But so many behind-the-camera workers -- carpenters, makeup artists and camera operators -- have left California, backers say more incentives are needed.
"This represents a responsible and significant investment in the future of California's middle class," Los Angeles Mayor Eric Garcetti, a backer of the new program, told the Los Angeles Times last week.
-- Cox Newspapers
Business on 08/22/2014