Mortgage Headlines
Mortgage Rates Edge Up, Treasuries Stable
U.S. Treasury securities prices shaved early losses to end little-changed on Friday, while mortgage rates rose slightly, as traders stepped back to mull another jump in crude oil and eyed erosion in stocks after a huge jury award against a giant U.S. drug-maker.
A renewed surge in crude oil prices reminded traders of the inflationary potential of higher energy costs, especially on the heels of Wednesday's unexpectedly strong rise in producer prices. Oil's strength undermined early firmness in key stock gauges, although firms such as Exxon Mobil continued to benefit from the runup that saw crude oil futures hit a record high of more then $67 a barrel a week ago.0Crude Oil Jumps Again
NYMEX September crude oil futures on Friday rallied $2.08 a barrel to $65.35 on supply concerns linked to production cuts in Ecuador and Nigeria. Some analysts also cited nerves over Mideast tensions after militants fired rockets at a U.S. Navy ship in Jordan. Earlier, two brokerages had raised their price forecasts for oil.
For much of the session, stocks held onto small gains, underpinned partly by a series of brokerage firm upgrades to large-cap stocks such as Coca-Cola and Delphi.
Jury Award Hits Stocks
But late in the afternoon, shares of embattled drug-maker Merck suddenly slid sharply after a Texas jury found the company liable for the death of a 59-year-old athlete after he took the painkiller Vioxx. The jury awarded his widow $239 million in damages, a verdict Merck vowed to appeal.
The late-day slump in Merck, which ended down $2.35 or 7.73 percent at $28.06, dragged down other pharmaceutical companies asl well. It also weighed on the Dow as concern surfaced that this could be just the tip of large jury awards, similar to those which have hit the tobacco firms, in the pharmaceutical industry. Merck alone faces dozens of similar lawsuits across the nation.
At closing:
The Dow 30 Industrial Index firmed 4.30 points or 0.04 percent to 10,559.23; the Nasdaq Composite index dipped 0.52 point or 0.02 percent to 2,135.56, and the benchmark Standard & Poor's 500 Index added 0.69 point or 0.06 percent to 1,219.71.
The 30-year Treasury bond firmed 1/32 in price with the yield sticking at 4.41 percent, unchanged from Thursday's close.
The 10-year Treasury note slipped 1/32 in price with the yield also staying at 4.20 percent, unchanged from Thursday's close.
The 5-year Treasury note dipped 2/32 in price with the yield firming to 4.07 percent from 4.06 percent at Thursday's close.
AVERAGE mortgage rates (zero discount points) based on rates collected nationwide were:
The 30-year Conventional Fixed-Rate Mortgage was at 5.671 percent from 5.659 percent at Thursday's close.
The 15-year Conventional Fixed-Rate Mortgage was at 5.293 percent versus 5.271 percent at Thursday's close.
Coming Up:
Monday again presents a void of key economic data, but on Tuesday the National Association of Realtors reports July existing home sales. They are expected to slip to an annual rate of 7.25 million units. On Wednesday, a report on July orders for U.S. durable goods, big-ticket items intended to last three or more years, is expected to show a decline of 0.6 percent. Also on Wednesday, the market will see the Commerce Dept.'s July data on new home sales, expected to dip to a 1.325 million unit annual rate.
Given Friday's stability at the closes, rates on many mortgage products likely will remain stable over the weekend as the market waits for more motivation. Laura Jacobs
ljacobs@interest.com
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