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COPYRIGHT 2007 Voxant, Inc.
Original Source: NIGHTLY BUSINESS REPORT
PAUL KANGAS, NIGHTLY BUSINESS REPORT ANCHOR: This summer could be a buyer`s market for new homes as sales fall again. We`ll look at the impact the housing market is having on the price of homes, as well as the overall economy.
SUSIE GHARIB, NIGHTLY BUSINESS REPORT ANCHOR: The world`s third largest software maker reported better-than-expected earnings after the bell today. We`ll tell you what helped Oracle beat the Street.
KANGAS: For the first time in a decade, all five members of the Securities and Exchange Commission testified on Capitol Hill today. They faced tough questions about being too business friendly.
GHARIB: And it looks like "The Wall Street Journal" may be one step closer to having a new owner. We`ll update you on the negotiations between the Dow Jones Company and media tycoon Rupert Murdoch.
KANGAS: I`m Paul Kangas.
GHARIB: And I`m Susie Gharib. This is NIGHTLY BUSINESS REPORT for Tuesday, June 26.
Good evening, everyone, a volatile and down day on Wall Street on more worries about the slumping housing industry and a loss of confidence by American consumers. Even though oil prices fell sharply today, a bigger than expected decline in sales of new homes last month concerned investors, as well as news that the consumer confidence index for June fell to the lowest level in almost a year. Suzanne Pratt reports.
SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: Americans are feeling skittish -- skittish about jobs, skittish about higher gasoline prices, and skittish about the declining value of their homes. That uneasiness showed up in the Conference Board`s consumer confidence index, which fell to 103.9 this month from 108.5 in May. Economists say declining confidence historically does not necessarily result in a drop in consumer spending. But Lehman Brothers economist Drew Matus believes this time could be different due to concerns about housing and escalating energy costs.
DREW MATUS, SR. MARKET ECONOMIST, LEHMAN BROTHERS: I think, when you add that up and combine it with some trepidation about the future of business activity in the country, people are just more likely to dial back a little bit in terms of their spending plans.
PRATT: People are buying fewer new homes. According to the Commerce Department, new home sales fell 1.6 percent in May to an annual pace of 915,000 units. That was the fourth drop in sales in five months and the previous three monthly readings were all also revised downward. Still, economist Bob Brusca says he`s not too concerned about the weakness in housing.
ROBERT BRUSCA, CHIEF ECONOMIST, FACT AND OPINION ECONOMICS: Median new home prices fell slightly, average new home prices are up by a sharp 6.5 percent year over year. So I think the sector is showing some signs of resiliency. I wouldn`t really say that it`s showing any signs of strength. It is showing signs of resiliency.
PRATT: Others, however, worry that housing is not even close to a bottom.
MATUS: The housing market is certainly something to watch out for and, because of the recent rise in mortgage rates, the risk of another leg to the housing downturn has increased substantially.
PRATT: Today`s weak economic data is helping to resurrect talk of a rate cut by the Federal Reserve. Tomorrow, the Fed begins its two-day policy meeting, when it will discuss the future of interest rates. Suzanne Pratt, NIGHTLY BUSINESS REPORT, New York.
KANGAS: The weak housing industry is also taking its toll on Lennar. The nation`s second largest home builder said today it sees no end to the housing downturn this year. The comments came as Lennar reported it swung to a loss of $1.55 a share in...
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