Lowe’s second-quarter profit falls 19 percent; company scales back store openings
New York (AP) — No. 2 home-improvement retailer Lowe’s Cos. on Monday said second-quarter earnings fell 19 percent on weaker-than-expected sales, adding fresh fuel to doubts about the ability and willingness of consumers to lead the economy out of recession.
The company also plans to scale back store openings in its next fiscal year in response to the poor economy and consumer pullback.
Lowe’s results were a stark contrast to the prior quarter, when the company beat expectations as consumers stocked up on paints and plants as spring approached.
The No. 2 home-improvement retailer says profit fell to $759 million, or 51 cents per share, from $938 million, or 64 cents per share last year.
Revenue fell 5 percent to $13.84 billion from $14.51 billion last year.
Analysts predicted a profit of 54 cents per share on revenue of $14.35 billion. Lowe’s had forecast earnings of 51 cents to 55 cents per share.
Fed extends consumer lending program through March
Washington (AP) — The Federal Reserve has extended a program intended to spur lending to consumers and small businesses at lower rates, but the central bank will not expand the types of loans made.
The Fed on Monday extended its Term Asset-Backed Securities Loan Facility through March 31 for most of the types of loans it makes. The program was scheduled to end Dec. 31.
The TALF started in March and figures prominently in efforts by the Fed and the Obama administration to ease credit, stabilize the financial system and help end the recession. Under the program, investors use the funds to buy securities backed by auto and student loans, credit cards, business equipment and loans guaranteed by the Small Business Administration.
The program for commercial mortgage-backed securities was extended through June 30 because issuing new securities in that area “can take a significant amount of time to arrange,” according to a joint news release from the Fed and the Treasury Department.
Home builder sentiment index rises in August
New York (AP) — The National Association of Home Builders says its housing market index rose in August to the highest point in more than a year.
The Washington-based trade association said Monday the index rose one point to 18, a level not reached since June 2008.
The reading for current sales conditions was unchanged at 16, while traffic by prospective buyers rose three points to 16. The index for expected sales over the next six months jumped four points to 30, signaling that builders think the worst of the housing slump is over.
The report reflects a survey of 474 residential developers nationwide.
Index readings lower than 50 indicate negative sentiment about the market. The last time it was above 50 was in April 2006.
Fed survey: bank lending tight through mid-2010
Washington (AP) — The Federal Reserve said Monday most banks expect their lending to remain tight through the second half of next year, with the exception of mortgage standards, which are loosening a bit.
The Fed’s latest survey of loan officers found that about 20 percent of U.S. banks tightened their lending standards on prime home mortgages in the April-June quarter, down from around 50 percent in the previous quarter and a peak of about 75 percent a year ago.
Meanwhile, 45 percent of banks say they tightened standards on nontraditional mortgages, such as adjustable-rate loans with multiple payment options, down from 65 percent in the previous survey.
Around 35 percent of U.S. banks reported tightening their lending standards for credit cards, down from nearly 60 percent in the first quarter.