Business news in brief

This June 10, 2015, file photo shows a chip credit card in Philadelphia. (AP Photo/Matt Rourke, File)
This June 10, 2015, file photo shows a chip credit card in Philadelphia. (AP Photo/Matt Rourke, File)

Index shows mortgage-application slump

An index for U.S. mortgage applications fell last week to the lowest level in almost four years as borrowing costs hit the highest level since 2010, adding to challenges for the housing market.

The Mortgage Bankers Association's market composite index fell 4 percent in the week ending Nov. 2 to 316.2, the lowest reading since December 2014, according to a report Wednesday from the Washington-based group. The survey's contract rate on a 30-year fixed loan rose to 5.15 percent from 5.11 percent, while a gauge of applications to purchase homes dropped 5 percent to the lowest level in about two years.

The data signal that higher mortgage costs are a growing headwind for U.S. homebuyers, who already face a dearth of affordable listings. Residential investment has been a drag on economic growth for five of the past six quarters, and recent data show cooling sales.

Borrowing costs have risen as the Federal Reserve has raised interest rates eight times since December 2015, part of a strategy to keep a strengthening labor market from overheating.

The central bank's Federal Open Market Committee started a two-day meeting Wednesday in Washington. It is expected to hold off on another increase but leave open the possibility of one in December.

-- Bloomberg News

Consumer borrowing rises in September

WASHINGTON -- Americans increased their borrowing by a solid amount in September, the Federal Reserve reported Wednesday. But the gain paled in comparison to a big August surge.

Consumer borrowing rose by a seasonally adjusted $10.9 billion in September after a jump of $22.9 billion in August, the Fed reported. The August gain had been the strongest increase in nine months.

The September advance was below economists' expectations for a $16.5 billion gain. The category that covers auto loans and student loans rose $11.2 billion. The category for credit cards fell by $311.6 million after having risen $4.6 billion in August.

Borrowing is closely tracked for signs of consumers' willingness to take on more debt to finance their purchases.

Consumer spending accounts for 70 percent of economic activity and has been especially important in driving growth in recent months. The economy, as measured by the gross domestic product, grew at an annual rate of 3.5 percent in the July-September quarter, helped by the biggest burst in consumer spending in nearly four years. That GDP gain followed an even faster 4.2 percent growth rate in the second quarter of this year.

With unemployment down to 3.7 percent, the lowest level in nearly five decades, and consumer confidence high, analysts believe consumer spending will continue to provide a strong underpinning for growth.

-- The Associated Press

Colorado vote is boon for energy firms

Anadarko Petroleum Corp., Noble Energy Inc. and other companies exploring for oil and natural gas in Colorado saw their stocks soar in trading Wednesday after voters rejected a plan to limit their ability to drill in the state.

Proposition 112 would have forced oil and gas development further away from residential and environmentally sensitive areas, curbing drilling across more than half of Colorado.

The vote lifts a threat that hung over some energy stocks since early August, when supporters gathered enough signatures to get the measure on the ballot. In that time, Anadarko's stock had fallen 20 percent; SRC Energy Inc. lost 35 percent; and Extraction Oil & Gas Inc. dropped 43 percent, analysts at Houston-based Tudor, Pickering, Holt & Co. said in a note.

Those companies and several others experienced big gains in Wednesday trading. Anadarko's stock rose 5.7 percent to $57.89. SRC Energy gained 13.9 percent to close at $8.37, and Extraction Oil & Gas rose 8.6 percent to $9.44. Noble gained 4.2 percent to $28.16.

--Bloomberg News

Zuckerberg declines request to testify

LONDON -- Facebook Chief Executive Officer Mark Zuckerberg has rejected a request to appear before an international parliamentary committee delving into questions about fake news.

The rebuff came after Damian Collins, the head of the U.K. parliament's media committee, joined forces with his Canadian counterpart in hopes of pressuring Zuckerberg to testify. Facebook rejected the invitation to appear before the so-called international grand committee session Nov. 27, arguing it wasn't possible for Zuckerberg to appear before all parliaments. The Facebook CEO testified earlier this year before members of the U.S. Congress.

Collins said pressure is building, with counterparts in Australia, Argentina and Ireland having joined the grand committee in the time since Zuckerberg was invited.

"Five parliaments are now calling on you to do the right thing by the 170 million users in the countries they represent," Collins said of Zuckerberg.

-- The Associated Press

Australia blocks bid for gas pipelines

A $9.4 billion bid by Hong Kong-based CK Group for the gas pipeline operator APA Group has been blocked by Australia's government on national security concerns, a decision that has the potential to further inflame diplomatic tensions with China.

"I have advised the consortium led by CK Asset Holdings Ltd. of my preliminary view that its proposed acquisition of APA Group would be contrary to the national interest," Australian Treasurer Josh Frydenberg said in a statement Wednesday.

His view was based on concerns that a sale would lead to an undue concentration of foreign ownership by a single company group in one of the country's most significant gas-transmission businesses. Frydenberg said he would make a final decision within two weeks.

The decision would scuttle the Hong Kong-based conglomerate's biggest overseas deal, which would have given it control of pipelines that deliver about half of Australia's natural gas. Rising electricity prices and blackouts have made energy security a political issue in Australia.

Prime Minister Scott Morrison, who served as treasurer before replacing former Prime Minister Malcolm Turnbull in August, has blocked several deals involving China-linked companies in the past three years, drawing ire from the government in Beijing.

-- Bloomberg News

Business on 11/08/2018

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