Morning Business Memo:
A comeback for the greenback. The U.S. dollar is at a six-month high against a basket of foreign currencies, and that strength is one reason for the latest drop in oil and gas prices. Global crude is quoted in U.S. dollars. Cheaper foreign oil is good news for U.S. consumers. A strong dollar plus abundant sources of U.S. natural gas and oil help put the brakes on inflation. The Japanese yen is now close to a four and a half year low against the dollar. The euro is at a three-month low, and with Europe's economic problems, its currency might face more weakness in the coming months. The recent surge in U.S. oil and gas production might be a big plus for the economy. "The Department of Energy expects net oil imports to account for just 32 percent of consumption next year, down from a peak of 60 percent - of a larger amount - in 2005," says this morning's Wall Street Journal.
The broad-based big stock index, the S&P 500, is now just 11 points shy of an all-time high. The Dow Jones rose again Wednesday for the ninth day in a row. That's the longest winning streak since 1996. Retailers were among the winners Wednesday after a strong retail sales report from the government. Best Buy and Kohl's were up more than 3 percent, the drug store chain Walgreens up 4 percent.
What's behind the staying power of the U.S. consumer? One reason is the recent improvement in the housing market. Very low interest rates have encouraged many homeowners to refinance their mortgages, paying less each month. "People are now feeling more comfortable about redeploying their refinancing dollars," economist Diane Swonk of Mesirow Financial in Chicago said. Many homeowners can spend more. "That's a very important trade off that was really absent during the entire recovery," she added. Housing prices were going down but now that has changed. "Housing prices rising are a real game-changer for the U.S. consumer," Swonk said.
The latest report on foreclosures from listing firm RealtyTrac shows they're down. The number of U.S. homes repossessed by lenders fell 11 percent from January, and the total was down 29 percent from the year before. But there are big regional differences. Washington, Wisconsin and Iowa saw sharp increases in foreclosures in February.
More signs of housing strength. Prices in southern California are surging. "Most every gauge shows prices are up significantly over the past year, even after adjusting for changes in the types of homes selling," says DataQuick President John Walsh. The research firm says average home prices in the six-county region rose nearly 21 percent last month, compared to the previous year.
Richard Davies Business Correspondent ABC NEWS Radio ABCNews.com twitter.com/daviesabc