WASHINGTON -- Average long-term U.S. mortgage rates fell this week, retreating from highs for the year and amplifying the incentive for prospective homebuyers.
Mortgage handler Freddie Mac said Thursday the average rate on a 30-year fixed-rate mortgage declined to 4.04 percent from 4.09 percent a week earlier. The rate on 15-year fixed-rate mortgages slipped to 3.21 percent from 3.25 percent.
As in recent weeks, mortgage rates followed the yield on the key 10-year Treasury note, which declined. Bond yields were pushed lower by a rise in bond prices. The yield on the 10-year note eased to 2.33 percent Wednesday from 2.36 percent a week earlier. It held steady in trading Thursday at 2.33 percent.
To calculate average mortgage rates, Freddie Mac, the Federal Home Loan Mortgage Corp., surveys lenders across the country at the beginning of each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for a 30-year mortgage was unchanged from last week at 0.6 point. The fee for a 15-year loan also held steady at 0.6 point.
Fiat Chysler files IPO to spin off Ferrari
Fiat Chrysler Automobiles said Thursday that it had filed with regulators to spin off Ferrari, the Italian luxury sports carmaker, in an initial public offering in the U.S.
The automaker said that it would seek to list the shares of the business, to be known as Ferrari NV, on the New York Stock Exchange.
Fiat Chrysler said the number of shares to be offered or the potential price range had yet to be determined, but any proposed offering isn't expected to exceed 10 percent of Ferrari's outstanding shares.
After the offering, Fiat Chrysler said it expected it would own about 80 percent of Ferrari and about 10 percent would be owned by Piero Ferrari, the son of Ferrari founder Enzo Ferrari, according to a filing with the Securities and Exchange Commission.
Fiat Chrysler intends to distribute its remaining shares in Ferrari to Fiat Chrysler's shareholders after the IPO, according to the filing.
Ferrari has been part of Fiat since 1969, when Fiat first acquired a 50 percent stake in the automaker.
Union Pacific's profit down with coal ebb
OMAHA, Neb. -- A sharp decline in coal shipments drove down Union Pacific's second-quarter profit by 7 percent, and executives predicted the railroad would fall short of expectations for the year because challenging conditions will continue.
Faltering coal demand has created challenges for all the major freight railroads. In April, natural gas overtook coal as the top source of U.S. electric power generation for the first time ever, according to the U.S. Department of Energy.
Union Pacific Corp. said coal volume dropped 26 percent in the second quarter, and demand for that fuel is likely to remain weak the rest of the year. Overall shipping volume is also likely to be down from last year's strong levels.
Chief Financial Officer Rob Knight said the railroad's efforts to increase prices and reduce costs won't be enough to generate profits higher than last year's $5.75 per share. Wall Street had been expecting Union Pacific to deliver earnings per share of $5.79 per share in 2015, according to FactSet.
Union Pacific's shares fell $5.56, or 5.7 percent, to close Thursday at $92.12.
Union Pacific reported net income of $1.2 billion, or $1.38 per share, for the second quarter. That's down from $1.29 billion, or $1.43 per share, a year ago.
The Omaha, Neb., railroad said that its revenue fell 10 percent to $5.4 billion because its price increases couldn't offset the drop in volume.
French farmers block roads in protest
PARIS -- French farmers relented Thursday after a day of protesting low milk and meat prices by blocking roads to Mont Saint-Michel and the Alps, but they warned that other agricultural protests are on the horizon.
The farmers used tires, tractors and tree trunks to block roads all around the country a day before many French take to the roads to start their summer vacations.
Mont Saint-Michel, in the northwestern Normandy region, is a UNESCO World Heritage Site. Tourists were forced to park their cars along the road and walk for miles to the famous island.
The farmers blocked three major highways for eight hours around the eastern city of Lyon, a gateway to the Alps and the south of France.
Some roads in western France, a region with many milk and pork farms, were also jammed.
Farmers say their profits are being chipped way by cheap imports and pressure from grocery chains. Low prices have put about 10 percent of France's livestock farms on the verge of bankruptcy, according to the government.
Farmers were angry after the French government offered to back loans for farmers and delay tax payments as part of a $654 million agricultural plan but it did not give any direct financial aid so as not to break European Union market rules.
Harvard sells Romanian forests to Ikea
BOSTON -- Harvard University's endowment arm sold 33,600 acres of forest to Ikea Group, exiting a foray into Romanian timberland.
Harvard Management Co.'s strategy of investing in overseas forestry went awry in Romania, where an agent it hired was convicted of bribery and money laundering in June 2014. Prosecutors said the agent arranged with sellers to inflate prices that Harvard-owned Scolopax Srl paid for timberland in exchange for $1 million in cash. He denied committing any crime.
"It highlights the outsize risk of going into these frontier markets," said Joshua Humphreys, president of the Croatan Institute, a social and environmental research group in Durham, N.C.
Paul Andrew, a spokesman for Harvard, declined to comment.
Scolopax put the land up for sale in late 2013, asking for about $116 million. A spokesman for Ikea declined to say how much it paid for the land.
The purchase makes Ikea the biggest private forestry owner in Romania and gives it a local source of wood for manufacturing. The Swedish furniture retailer said last week that it bought the forests from Greengold European Capital SA, which is owned by Harvard through a series of investment vehicles. Scolopax sold the property to Greengold last year, Romanian newspaper Jurnalul de Buzau reported.
Business on 07/24/2015