Real Estate Daily News Buzz is designed to give news snippets to readers that our (yet to be award winning) editors thought you could use to start your day. They come from various business perspectives, real estate, government, the Fed, local news, and the stock markets to save you time. Here you will find the headlines and what the news buzz for the day will be.
On Friday, the Dow Jones industrial average surged 167.35 points, or 1%, to 17,113.15. The Standard & Poor's 500 index rose 16.86 points, or 0.9%, to 1,982.85. The NASDAQ composite climbed 45.45 points, or 1%, to 4,512.19.
Benchmark U.S. crude rose $1.01 to close at $93.54 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils used by many U.S. refineries, remained unchanged at $97 on the ICE Futures exchange in London. Wholesale gasoline fell 5.6 cents to close at $2.662 a gallon. Heating oil rose 0.5 cent to close at $2.701 a gallon. Natural gas rose 1.3 cents to close at $3.984 per 1,000 cubic feet.
WHY RATE HIKES ARE GOOD NEWS FOR STOCKS
NEW YORK (AP) -- It's no surprise that the prospect of a Federal Reserve rate hike worries stock investors. The Fed's unprecedented economic stimulus has in large part driven a surge in stock prices since 2009. The central bank has bought trillions of dollars of bonds and kept short-term interest rates close to zero. That's allowed businesses and consumers to refinance their debt at lower rates, freeing up cash to spend. But if history is a guide, investors have nothing to fear. In the nine instances since 1955 that the Fed has started raising rates after a recession, the Standard & Poor's 500 index has risen by an average of 58 percent between the first hike and the peak of the market, according to LPL Financial, an independent broker-dealer based in Boston.
ECONOMY’S Q2 REBOUND WAS EVEN FASTER THAN THOUGHT
WASHINGTON (AP) -- The U.S. economy's bounce-back last quarter from a dismal winter was even faster than previously thought, a sign that growth will likely remain solid for rest of the year. The economy as measured by gross domestic product grew at a 4.6% annual rate in the April-June quarter, the Commerce Department said Friday. It was the fastest pace in more than two years and higher than the government's previous estimate of 4.2%. The upward revision reflected stronger-than-expected business investment and exports last quarter. The healthy second-quarter growth marked a sharp rebound from the January-March quarter, when the economy shrank at a 2.1% rate in the midst of a brutal winter that idled factories and kept consumers at home.
CONSTANT PHONE CALLS ALLOWED ON EUROPEAN FLIGHTS
BERLIN (AP) -- European skies may soon be alive with the sound of small talk with new safety rules allowing the use of all portable electronics, including cellphones, at any time during flights. Under the guidelines issued Friday by the European Aviation Safety Agency, European airlines can allow passengers to use electronics during the entire flight, without putting them into "airplane mode." Standing in the way is the difficulty of getting a cellphone signal at high altitudes, and also how passengers will react to the thought of sitting next to a chatterbox across the Atlantic. That'll be up to the airlines to figure out as they implement the new rules. In most European trains, for example, there are "silent" cars where talking on phones is prohibited but it seems unlikely a scheme like that would work on anything but the largest jets.
'BOND KING' BILL GATES LEAVES PIMCO, JOINS JANUS
NEW YORK (AP) -- The biggest star in the bond market shocked the financial world Friday by leaving the huge money management firm he has led for four decades and joining a much smaller rival. Bill Gross, who co-founded the investment giant Pimco in 1971 and runs its $222 billion Total Return Fund, said he would join Janus Capital Group. The prospect that investors would follow the guru-like fund manager and pull their money out of Pimco sent the stocks of several rival investment companies soaring. Janus jumped 43%. Allianz, the German company that owns Pimco, dropped 6%.
US CONSUMER SENTIMENT INDEX REACHES 14-MONTH HIGH
WASHINGTON (AP) -- A measure of U.S. consumer confidence reached its highest level since July 2013, led by greater optimism that the economy will grow and incomes will rise. The University of Michigan said Friday that its index of consumer sentiment rose to 84.6 in September from 82.5 in August. That's the second highest level in the past seven years, although the index has rarely topped 85 since the Great Recession. Before the downturn, it typically stood above 90. Still, the sunnier outlook could spur consumers to spend more, which would accelerate economic growth. Consumer spending accounts for about 70% of economic activity. But spending growth has been subdued since the recession ended in 2009, averaging at an annual rate of 2%. It usually rises above 3% in a healthy economy.
PENTAGON WANTS TIGHTER SOLDIER LOAN PROTECTIONS
WASHINGTON (AP) -- Aiming to restrict lenders who prey on members of the military, the Obama administration on Friday moved to close legal loopholes that have placed hundreds of thousands of service members at risk of excessive payday and other short-term loan fees. The Defense Department proposed new rules to toughen a 2006 law that limits interest rates for certain types of credit available to service members and their dependents. Under current law, lenders cannot charge members of the military more than 36 percent interest. But the loans covered by the law are so narrowly defined that lenders, many of them located near military bases, can make simple adjustments to get around its provisions.
SEC ALLEGES $129M PYRAMID SCHEME IN CHINA, U.S.
WASHINGTON (AP) -- U.S. regulators have charged two companies and three individuals with operating a pyramid scheme that made some $129 million from preying on investors in China, Taiwan and the U.S. The Securities and Exchange Commission announced the civil fraud charges Friday against eAdGear Holdings Limited, based in Hong Kong; California-based eAdGear Inc.; and Charles Wang, Qian Cathy Zhang and Francis Yuen. A federal court in San Francisco authorized the SEC's request to freeze the defendants' assets and bar them from soliciting investors. An attorney representing Wang, Zhang and Yuen didn't immediately respond to a request for comment.
USDA: GENETICALLY MODIFIED WHEAT FOUND IN MONTANA
WASHINGTON (AP) -- Unregulated genetically modified wheat has popped up in a second location in the United States, this time in Montana, the Agriculture Department said Friday. No genetically engineered wheat has been approved for U.S. farming, and the discovery of unapproved varieties can pose a potential threat to U.S. trade with countries that have concerns about genetically modified foods. USDA said Friday that the incident is on a smaller scale than a similar finding in Oregon last year that prompted several Asian countries to temporarily ban U.S. wheat imports.
ACTIVIST INVESTOR PUSHES YAHOO TO BUY RIVAL AOL
SAN FRANCISCO (AP) -- Yahoo CEO Marissa Mayer is getting some unsolicited advice on how to turn around the long-struggling Internet company, just like some of her predecessors who tangled with investors dissatisfied with management's performance. In a letter on Friday, activist investor Jeffrey Smith urged Yahoo Inc. to buy another fallen Internet star, AOL Inc. and take steps to reduce the future taxes on the company's lucrative stake in China's Alibaba Group. He also chastised Mayer for spending $1.3 billion to acquire an Internet blogging service and more than two dozen other startups during the past two years with little to show in return so far. To bolster his arguments, Smith says he has built a "significant" stake in Yahoo through Starboard Value LP. The size of the stake wasn't quantified in Friday's letter and hasn't yet been divulged in regulatory filings.
EU PROPOSES DEAL TO ENSURE UKAINE GAS SUPPLIES
BERLIN (AP) -- Ukraine would repay $3.1 billion in debts to Russia in exchange for guaranteed gas deliveries through the harsh winter months under a proposal unveiled Friday after talks brokered by the European Union. The proposed deal, which would expire next spring, is aimed at averting a supply crisis in Ukraine and the EU over the winter but wouldn't resolve a deeper dispute over what price Kiev should pay for past and future deliveries. An arbitration court in Stockholm is expected to rule only next year on that. He said there is a good chance of the deal being signed next week, when he plans to get the two countries' energy ministers and top gas executives back together in Berlin. Those officials will now consult with governments in Kiev and Moscow.
Correction: Movie Drones story
WASHINGTON (AP) — In a story Sept. 25 about the Federal Aviation Administration granting permits for drones to be used in moviemaking, The Associated Press reported erroneously that ConocoPhillips was the only company previously granted a permit for commercial drone fights. BP also had been granted a permit. A corrected version of the story is below:
The government granted six movie and television production companies permission to use drones for filming, an important step toward greater use of the technology by commercial operators, Transportation Secretary Anthony Foxx announced Thursday. Dozens of other industries are lined up to follow Hollywood's lead. Until now, the Federal Aviation Administration, which is part of the Transportation Department, had banned commercial drone operations with the exception of two oil companies in Alaska. The FAA permits come with limitations, including that the unmanned aircraft be used only in a restricted area, that they be flown under 400 feet in altitude and that flights last no more than 30 minutes at a time. Nighttime flights are prohibited, and reality television shows or other unscripted events won't qualify for the permits.