By The Associated Press

Average U.S. rates on fixed mortgages have risen for a fourth straight week, remaining slightly above record lows. Cheap mortgages have helped fuel a modest housing recovery this year.

Mortgage buyer Freddie Mac says the rate on the 30-year loan increased to 3.66 percent, up from 3.62 percent last week. Four weeks ago, the rate fell to 3.49 percent, the lowest since long-term mortgages began in the 1950s.

The average on the 15-year fixed mortgage, a popular refinancing option, edged up to 2.89 percent. That’s up from 2.88 percent last week and from the record low of 2.8 percent four weeks ago.

The availability of low rates has lifted home sales higher this year. Prices also have increased, largely because the supply of homes has shrunk while sales have risen.

Builder confidence is also at its highest level since March 2007, according to a survey by the National Association of Home Builders.

The housing market’s recovery will likely add to economic growth in 2012 for the first time in seven years. Home purchases, construction and prices are gradually but consistently increasing, though they remain far below levels seen in a healthy economy.

Sales of previously occupied homes rose 2.3 percent in July from June to a seasonally adjusted annual rate of 4.47 million, the National Association of Realtors reported this week. Over the past 12 months, sales have jumped more than 10 percent.

New-home sales have been strengthening, too. Sales in the United States rose 3.6 percent in July to match a two-year high reached in May, the Commerce Department said Thursday. The seasonally adjusted annual rate last month was 372,000, though still well below the 700,000 pace that economists consider healthy.

Toll Brothers, a builder of high-end homes, is enjoying its most sustained demand in more than five years.

All of which is a big change for the residential real estate industry, which has been a major drag on the economy since the housing bubble burst more than five years ago.

Still, the housing market has a long way to go to reach a full recovery. The pace of home sales remains well below healthy levels. Many people are still having difficulty qualifying for home loans or can’t afford larger down payments required by banks.

Mortgage rates are low because they tend to track the yield on the 10-year Treasury note. A weaker U.S. economy and uncertainty about how Europe will resolve its debt crisis have led investors to buy more Treasury securities, which are considered safe investments. As demand for Treasurys increase, the yield falls.

To calculate average rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.

The average does not include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for 30-year loans was 0.7 point, up from 0.6 point last week. The fee for 15-year loans also increased to 0.7 point from 0.6.

The average rate on one-year adjustable rate mortgages fell to 2.66 percent from 2.69 percent last week. The fee for one-year adjustable rate loans was unchanged at 0.4 point.

The average rate on five-year adjustable rate mortgages rose to 2.8 percent from 2.76 percent. The fee held steady at 0.6 point.

By NBC News staff and wire reports

Americans purchased more new homes last month, the Commerce Department said Thursday, but put prices fell in July, offering mixed signals about the strength of a nascent recovery in the housing market.

The government said new home sales for July rose 3.6 percent to a seasonally adjusted 372,000-unit annual rate, matching a two-year high seem in April. Economists forecast a total of 365,000 annualized units. Compared to July last year, new home sales were up 25.3 percent.

“The data is modestly better than expected, so from that perspective it is a constructive report,” said Jacob Oubina, a senior economist at RBC Capital Markets in New York.

Still, home sales are bumping along at very low levels, he added, predicting a slowdown in home purchases after the summer.

The housing report showed prices dropped last month, with the median price of a new home down 2.5 percent in July from a year earlier to $224,200.

The government’s estimates for new home sales are prone to substantial revisions, and June’s sales pace was revised up to 359,000 units from the previously reported 350,000 units.

The July housing data follow a report Wednesday from the National Association of Realtors that showed more Americans purchased previously-owned homes last month, suggesting improvement in the beleaguered housing market over the summer.

Low interest rates and a modest improvement in the labor market helped home-buying conditions, the NAR said. Other trends that are helping housing include mortgage rates, which are at near-record lows, and housing prices that are down sharply from the mid-decade housing bubble period.

Wednesday’s housing number was seen as the latest sign that the housing market, which is beginning to recover from the after-effects of the financial crisis, is perking up. Recent data show sales and prices are becoming stable.

On Wednesday, luxury homebuilder Toll Brothers reported higher quarterly profit and a strong increase in new orders.

“We are enjoying the most sustained demand we’ve experienced in over five years,” Douglas C. Yearley, Toll’s chief executive officer, said in a statement.

Reuters contributed to this report.

If recent campaign events by both the Democratic and Republican presidential candidates are any indication, energy policy is going to be a major political chip in the race for the White House.

President Obama and Mitt Romney have diametrically opposed views on energy security, efficiency, and innovation. That brings seemingly minute issues such as a wind tax energy credit (crucial to Iowans, coincidentally) to the forefront as well as more philosophical issues such as whether the government should subsidize companies researching and producing renewable energy sources.

But beyond the media blitz surrounding a few select issues in a few select politically important states, a host of other energy issues affecting America’s energy security and future remain hidden from public discourse.

Here’s a look at just a few prickly, but important, energy issues that few are talking about:

The coal industry. Though it might seem like a business from a bygone era, coal mining and its use to produce energy are still key issues for many states, including some that could go either way come the November election.

[Read: Wind Energy Tax Credit: More Hot Air or Key Job Creator?]

That isn’t lost upon Mitt Romney, who visited eastern Ohio in a campaign stop last week. Surrounded by some 75 miners, the Republican challenger pledged his support for the industry and dinged the Obama administration’s tight regulation of coal plants.

But regulation of coal plants isn’t the only thing that’s squeezing the industry. Plentiful natural gasreserves have made the United States the largest natural gas producer in the world, according to the Institute for Energy Research, and that’s made deposits of the resource in Texas, Alaska, and Wyoming increasingly attractive.

“Neither candidate’s position [on the future of the coal industry] has been terribly well defined,” says Mike Lynch, president and director of global petroleum service at Strategic Energy & Economic Research. “The big challenge right now is that coal is being clobbered by cheap natural gas not so much by regulation, and neither [Romney] nor Obama has addressed that.”

Although coal is relatively cheap, it hasn’t been able to compete with the flood of cheap natural gas recently. Coal is also harder to transport, dirtier, and the modern plants needed to produce electricity from coal are costly. A recent report also shows that carbon-dioxide emissions from the energy sector dropped to their lowest levels in 20 years, a feat many experts credit to the increased use of natural gas.

As a result, natural gas has been creeping up on coal’s market share of energy production, which is bad news for jobs supported by the coal industry in some swing states.

“Natural gas prices have shocked everyone,” Lynch continues. “I don’t think either candidate knows what they’re going to do about coal mining.”

Energy exports. Last December, the Energy Information Administration announced a milestone. The United States become a net exporter of refined petroleum products for the first time since 1949, thanks in part to declining domestic demand and new oil discoveries in North Dakota and Texas.

[Read: Rising Building Material Costs Could Crimp Construction Gains.]

But as oil production and refining has ramped up in the United States, supply has far oustripped demand in nearby domestic markets, dually dampened over the years by increasingly fuel efficient vehicles and more recently by a sickly economy. As a result, many times distributors often find better sales environments abroad in energy-hungry developing countries in South America and China.

“If exports of fuels refined in America continue as a trend rather than proving to be a one-time anomaly, it will be a positive development for American energy security,” Charles Drevna, president of the National Petrochemical & Refiners Association, said in a statement. “It will also result in more American jobs, more tax revenue for government at all levels, and a faster recovery for our nation’s economy.”

But oil isn’t the only energy source America could export. The nation’s vast supplies of coal and natural gas are valuable to growing nations abroad. Still, not everyone is keen on sending energy sources overseas. For starters, transporting coal to ports would involve some not-so-picturesque byproducts and environmental concerns.

“There’s some opposition in Oregon to building better ports [equipped to handle the increased volume of exports],” Lynch says. “It’s partly NIMBY as in ‘We don’t want more coal trains going through our backyards’ and partly environmental as in ‘We don’t want China burning more coal.'”

With natural gas exports, some opponents fear shipping more abroad could push up prices here in the States. But, Lynch doesn’t see much logic in that.

“Nobody says don’t send lobsters to Boston to keep the price low in Maine,” he adds.

Nuclear. Nuclear energy provides about 20 percent of the nation’s electricity–a bedrock part of the electricity grid, according to experts–but lately, there’s been a lot of uncertainty about the future of the industry, especially when it comes to disposing of spent fuel.

[Read: In Canada, China Sees Greater Opportunities to Secure Oil Reserves.]

With Yucca Mountain in Nevada eliminated as a candidate for a national repository for nuclear waste, nuclear power plants have no long-term option for storing waste. Instead, they now store the waste on site in pools or casks. Efforts are underway to identify a new site, but no time frame has yet been set.

A recent U.S. Court of Appeals decision ruled that a temporary solution is not good enough to meet federal environmental standards. As a result, the Nuclear Regulatory Commission has halted issuing new licenses for nuclear power plants, putting at risk the expansion of nuclear power in the United States.

Although the decision doesn’t immediately affect any power plants, the speed bump could push back application processing for a year or more.

“What the impact [of the court ruling on potential future plant licenses or renewals for existing licenses] will be is hard to say,” says David McIntyre, a spokesman for the NRC. “On new reactors, there are only three on schedule to be completed over the next couple of years and hopefully we’ll have resolved this issue by then.”

In the meantime, the NRC is focusing on addressing the court’s ruling, McIntyre stresses. The agency’s response, and hopefully more certainty for the industry, should be coming out soon.

Until then, new nuclear energy reactors–and the future of the industry–are on hold indefinitely.

Meg Handley is a business reporter for U.S. News & World Report. You can reach her at mhandley@usnews.com and follow her on Twitter at @mmhandey.

(Reuters) – Apple Inc’s market value climbed past $623 billion on Monday, surpassing the record set by Microsoft Corp during the heyday of technology stocks in 1999.

Apple shares rose 2.6 percent, bringing its gains this month to almost 9 percent as Wall Street bets on the September 12 rollout of the latest version of the iPhone, the device that revolutionized the mobile industry.

Microsoft, however, retains the title of history’s most valuable company if its 1999 peak value of about $621 billion were to be adjusted for inflation.

Apple’s stock usually rallies in the run-up to major product launches, among the most heavily watched events on the annual tech calendar. The iPhone is the company’s biggest product, yielding half or more of its sales.

Sources have said the company will take the wraps off a larger version of its iPhone on September 12. Some analysts also think it intends to announce a smaller iPad to safeguard its market share, as rivals from Google Inc to Amazon.com Inc begin selling cheaper, seven-inch tablets.

But Bernstein Research’s Toni Sacconaghi warned that questions remain about the availability of components for both the iPhone and the iPad, which in the past has constrained Apple’s product shipments.

“A key question for the launch will be Apple’s expected rollout schedule,” the analyst wrote on Monday. “Apple’s intention is to continue to ramp offerings as quickly as possible, but the company’s ability to do so remains a key near-term question.”

Apple’s shares have risen 64 percent in 2012. On Monday, they closed at a session high of $665.15, conferring on the Silicon Valley giant a capitalization of $623.5 billion, exceeding Microsoft’s 1999 value of $620.8 billion, according to data provided by S&P Dow Jones Indices.

But Microsoft’s value would rise to $853.7 billion after adjusting for rising prices, according to the Bureau of Labor Statistics’ inflation-calculator. (here)

POLAR OPPOSITES

Apple overtook Exxon Mobil to reach the No. 1 spot by market capitalization last year. Monday’s move means it has now entered the record books as the biggest company ever, in terms of market value.

“Everyone loves a winner; if you play the quick trade be careful,” said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices in emailed comments. “If you are an investor, check the fundamentals and business plans, and avoid the hype in your decision.”

Apple climbed even as fellow technology heavyweight Facebook Inc plumbed new depths. The No. 1 social network slid to a record intraday low of $18.75 in the morning before bouncing back to close just above $20 after Capstone upgraded the company’s stock to buy from hold.

Facebook’s stock has gone south in the past month as investors worried about its ability to make revenue grow. Last week, some early investors were given the go-ahead to sell for the first time since Facebook’s May 18 IPO. Several similar lockups will expire through the end of the year.

Facebook rebounded above $20 in afternoon trade after Capstone’s upgrade, based on a combination of a more attractive valuation since its decline, and good long-term advertising prospects.

“It seems to be down around levels that people who didn’t like the deal thought it was really worth. And now it seems to have stabilized,” said Eric Kuby, chief investment officer, North Star Investment Management Corp in Chicago.

It may have “found a level which seems more of a better price for people valuing the company in terms of the future.”

(Writing by Edwin Chan; Editing by Kenneth Barry, Steve Orlofsky, David Gregorio; and Phil Berlowitz)

It may not sound as flashy as social media, but healthcare is becoming a new star in Silicon Valley. Driven by the promise of enormous payouts, entrepreneurs are using the latest technology and design to help save lives, and make money.

“It’s risky,” said Nate Gross, co-founder of San Francisco, California-based Rock Health, an incubator for healthcare startups. “You have a few more cards stacked up against you.” For example, Gross said, investors’ hesitancy is one of the setbacks. “It’s easier to understand a general tech product you can use than an app for cancer patients that you can’t use,” he said, adding that making healthcare look “sexy” is crucial for startups looking for funding.

Borna Safabakhsh is one entrepreneur who managed to do just that. His company, Agile Diagnosis, has reportedly raised more than $2 million in seed investment. The Palo Alto, California-based startup develops software that helps doctors to provide more accurate diagnosis. Safabakhsh, a recent graduate of Rock Health and another accelerator called Y-Combinator, said it’s extremely important to show the investors that you’re very familiar with your users.

“Understanding the context of a doctor is the hardest part,” Safabakhsh said, who has no academic background in medicine. “Whether it’s primary care setting, ER setting or urgent care setting, things are all different,” he said. For better feedback and interactions, Safabakhsh and his partners decided to work with medical students first, who, he said “have the greatest need and are willing to grow with” the company.

“To be able to provide informational value to an expert, we have to be much more sophisticated and mature than we are right now,” Safabakhsh said.

Even if your product is designed for consumers, not doctors, it could still be baffling to figure out the demand. M. Jackson Wilkinson is the co-founder of Kinsights, an online community that connects parents to answer each other’s health questions about their children. Although married to a pediatric doctor, Wilkinson doesn’t have kids.

“It helps living with a doctor,” Wilkinson said. “But there’s definitely a learning curve.” With previous experience in a consulting firm, Wilkinson said he knows how to “beef up” knowledge on different industries. But in healthcare, “the stakes are much higher.”

Except for the special needs of their users, healthcare entrepreneurs may have to study FDA regulations as well, something mass-audience developers don’t have to worry about.

For Geoff Clapp, the co-founder of Health Hero Network, a remote health monitoring business acquired by Bosch Healthcare five years ago, he had to study up on FDA regulations when developing his business. Once a product involves collecting health data for clinical analysis, the FDA requires “medical device” approval, which includes a process called 510(k) clearance and a privacy protection framework called HIPPA.

However, said Clapp, the regulators are still catching up with the latest technology that would, say, turn a smart phone into a blood pressure monitor, or a laptop into an X-ray scan reader. “It’s extremely cloudy right now,” Clapp said. “There’s really no case law yet.”

Despite the challenges of launching a product in a highly-regulated, and quickly evolving industry, Clapp believes more regulations are not necessarily anti-innovation. Instead, he said, clearly written rules may be helpful to improve product quality and keep the industry healthy. “You have a responsibility as a healthcare entrepreneur, “Clapp said. “When the iTunes store is full of snake oil … our market dies.”

In addition to learning hurdles and regulatory issues, competing with the big players in a lucrative market is also inevitable. “A lot of the powers are satisfied and satiated in their current revenue models,” Nate Gross of Rock Health said. “But the startups are here to disrupt that a lot of the times.”

But it’s tough to grab a share from the big companies, which are dominant in certain fields in healthcare, such as Electronical Medical Records, or EMR, where doctors store and manage patients’ digital health data.

“I see a whole bunch of people try to create stand-alone, personal health records, and they universally don’t do well,” said Dan Imler, a pediatric physician at Boston Medical Center who has been involved with several healthcare startups. “The more the technology is integrated into the workflow that a doctor is used to, the more likely it’s going to be accepted,” Imler said, adding that the big companies that create those EMR systems usually monopolize the market, leaving very little space for startups to squeeze in.

“It may sound cliché, but people want to create positive changes and build things that matter,” Borna Safabakhsh said, explaining why entrepreneurs entered this industry despite all the challenges.

And the payback, if succeeded, could be abundant too. According to the Center For Venture Research at University of New Hampshire, 30 and 19 percent of angel investment went to healthcare in 2010 and 2011 respectively, making it one of the top markets. In addition, a report released by the Centers for Medicare and MedicAid Services suggests that the national healthcare spending was nearly 18 percent of the country’s GDP in 2011 and is expected to grow by 4.2 percent this year.

“Social media is not one fifth of our economy,” Gross said. “The opportunity to make a difference in healthcare is tremendous.”

(The author is a Reuters contributor)

(Editing by John Peabody and Brian Tracey)

* Speculators bet on fall in S. Africa platinum output
    * Charts show platinum near overbought territory
    * Gold-platinum spread narrows after platinum rally

    By Frank Tang
    NEW YORK, Aug 20 (Reuters) - Platinum prices jumped nearly 2
percent on Monday, hitting a two-month high after deadly
violence at a mine in top producer South Africa triggered heavy
speculative buying on supply worries.
    Gold edged up 0.3 percent as inflow into the holdings of the
world's largest bullion-backed exchange-traded fund boosted
sentiment, and silver jumped 2 percent as platinum's rally
triggered short-covering.
    Investors bought platinum on worries that mines in South
Africa may produce less of the metal after 44 people were killed
during a strike at the Marikana mine owned by Lonmin 
, which accounts for 12 percent of global platinum
output. 
    The metal soared 7 percent in the past three sessions,
bringing its year-to-date gain to 7 percent, which means
platinum has outperformed gold, silver and copper so far in
2012. On technical charts, platinum's relative strength index is
at 69.8, just a hair below 70 which is seen as overbought.
    "Markets that are overbought can very easily get a lot more
overbought before they go down," said Adam Sarhan, CEO of Sarhan
Capital.
    Momentum buying should further underpin platinum after it
climbed to a two-month high and on its outperformance in the
metals complex, Sarhan said.
    Spot platinum rose 1.8 percent to $1,491.49 an ounce,
after hitting a high of $1,491.99 an ounce which marked its
highest since June 18.
    Last week, platinum posted a 5 percent rally, its biggest
weekly rise since February.
    Speculative fervor in platinum futures was evident even as
about a third of the workforce trickled back to work at Lonmin
on Monday. Analysts said the lost platinum production due to the
work stoppage at Lonmin has been negligible so far.
    Deutsche Bank said in a note that platinum market's expected
surplus for 2012 "could easily be wiped out" if labor violence
prolonged at Lonmin or if the unrest spread to other mines.
    Platinum's climb also benefited sister metal palladium
, which rose to an eight-week high at $608.50 an ounce in
early trade. It was up 0.2 percent at $603.60.

    PLATINUM DISCOUNT NARROWS
    Platinum's rise narrowed its discount to gold to less than
$130 an ounce from above $230 an ounce a week ago. 
    Platinum's rally has lifted gold and silver, which have been
recently trading in a range on speculation about whether the
Federal Reserve and the European Central Bank could launch more
gold-friendly monetary stimulus.
    Spot gold was down 0.3 percent at $1,620.99 an ounce
by 12:33 p.m. EDT (1633 GMT). 
    U.S. December gold futures for December delivery
climbed $4.30 an ounce to $1,623.70.
    Silver gained 2.2 percent at $28.64 an ounce.
    Buying by central banks, a major support to bullion prices
this year, was evident again last month, after Russia's central
bank said on Monday that it added another 18.7 tonnes of gold to
its reserves in July. 

 Prices at 12:33 p.m. EDT (1633 GMT)                           

                               LAST      NET    PCT     YTD
                                         CHG    CHG     CHG
 US gold                    1623.70     4.30   0.3%    3.6%
 US silver                   28.590    0.588   2.1%    2.4%
 US platinum                1497.00    23.90   1.6%    7.0%
 US palladium                606.80     1.70   0.3%   -7.5%

 Gold                       1620.99     5.40   0.3%    3.7%
 Silver                       28.64     0.61   2.2%    3.5%
 Platinum                   1491.49    26.99   1.8%    7.1%
 Palladium                   603.60     1.30   0.2%   -7.5%

 Gold Fix                   1615.00    -0.25   0.0%    2.6%
 Silver Fix                   28.10   -10.00  -0.4%   -0.3%
 Platinum Fix               1462.00     8.00   0.5%    5.9%
 Palladium Fix               598.00     3.00   0.5%   -6.0%

(Reuters) – Apple Inc became the most valuable public company of all-time on Monday when the combined value of its shares exceeded a previous record set by Microsoft.

Apple traded at $664.74 to give it a market value of $623.14 billion, above the record set by Microsoft of $620.58 billion set in 1999 at the height of the tech bubble, according to data provided by S&P Dow Jones Indices.

(Reporting By Edward Krudy; Editing by Kenneth Barry)

(CNN) — More details about the presumably imminent release of the next iPhone have emerging, if the typically anonymous spate of Internet sources are to be believed.

iMore, the first blog to publish reports that Apple plans to unveil its latest iteration of the smartphone on September 12, is now sayingthat pre-orders will begin that day and that the phone will be released nine days later, on September 21.

Both reports from the blog cite “sources that have provided iMore with accurate iPhone related launch dates in the past.” Several other blogs later cited their own sources saying the September 12 date is likely correct.

International launches in Europe and elsewhere will begin the first week of October, iMore said, possibly October 5.

Apple, to date, has made no official announcement.

iPhone speculation has focused on a handful of expected new features, including a slightly larger screen, a smaller dock connector and NFC technology that would make it easier for shoppers to make payments through their phones.

There are also varying opinions as to whether CEO Tim Cook might also unveil a smaller “iPad Mini” at the event. Once considered a no-go because of late CEO Steve Jobs’ statements that a smaller tablet wouldn’t work, observers increasingly think Apple could offer one to compete with emerging competitors like Amazon’s Kindle Fire and Google’s Nexus 7.

Current iPhone owners seem convinced that a rollout is imminent.

Last week, Ebay reported that it was seeing a surge in the number of people using the site for trade-in offers on their smartphones.

The site’s “Instant Sale” feature, which offers a pre-determined amount for electronics based on what someone else has offered, saw its number of phone trade-in offers jump 70% between July 30 and August 1. That’s when the September 12 release-date rumors began circulating.

On Tuesday, a working, 32GB iPhone 3GS got an instant $91 offer; a 16GB iPhone 4 would bring in $176; and the top-end iPhone 4S, the 64GB model, would get $371.

(Reuters) – Foxconn Technology Group is to set up an operation in Indonesia with plans to invest $5-10 billion over five to 10 years and starting with the assembly and production of 3 million handsets per year, Indonesia’s Trade Minister Gita Wirjawan told reporters on Tuesday.

The first investment will start in October and in phase two of the project, starting in July 2013, Foxconn will build a plant and increase output to 10 million units per year.

Foxconn, which is based in Taiwan, is the main supplier for Apple Inc and has been in talks with the Indonesian government for some time.

(Reporting by Yayat Supriatna; Writing by Matthew Bigg; Editing by Greg Mahlich)

(Reuters) – Retail sales rose in July for the first time in four months as demand climbed for goods ranging from cars to electronics, a sign that consumers could drive faster economic growth in the third quarter.

Sales rose 0.8 percent last month, the largest gain since February and well above analysts’ expectations, Commerce Department data showed on Tuesday.

A separate report showed U.S. producer prices increased in July at the fastest pace in five months even as energy prices fell.

The broad-based expansion in retail sales bolstered the view that the slowdown in economic growth during the second quarter will prove temporary.

“Here comes the U.S. consumer,” said Harm Bandholz, an economist at UniCredit in New York.

Consumer spending drives the U.S. economy, and the report could give some relief to President Barack Obama, whose November re-election bid against Mitt Romney, the presumptive Republican nominee, has been imperiled by a weak recovery.

But after a dismal spring, summer has brought more reassuring signs for the economy.

Hiring accelerated in July despite an uptick in the jobless rate, and Tuesday’s data added to uncertainty that the Federal Reserve will implement a third round of bond-buying, or quantitative easing, to stimulate growth.

“Today’s retail sales data further reduces the likelihood of QE3 in September, but does not take it off the table,” said Michelle Meyer, an economist at Bank of America in New York.

Fed policymakers meet next on September 12-13.

Economists polled by Reuters had expected retail sales to rise 0.3 percent. U.S. stocks climbed on the data, as did yields on U.S. government debt. The dollar rose against the yen.

CAUTIOUS CONSUMERS

Pointing to a strong increase in consumer spending in July, the so-called core measure of retail sales – which excludes autos, gasoline and building materials – rose 0.9 percent. That was the biggest gain since January.

Stronger consumer spending would help corporations doing business in the United States. Home Depot Inc, the world’s largest home improvement chain, reported a quarterly profit that beat Wall Street views on Tuesday and raised its earnings outlook for the fiscal year.

Economic growth in the United States cooled to a 1.5 percent annual rate in the second quarter from a 2 percent pace in the first three months of the year, and economists are now banking on an acceleration.

In the retail report, the government said sales contracted more than previously thought in June, further darkening the view of the second quarter.

The Commerce Department said in another report that sales at all businesses slipped in June by the most since March 2009, which economists said should curb some enthusiasm over the jump in retail sales.

“Given that sales are only marginally higher since the start of the year, households clearly remain cautious,” said Amna Asaf, an economist with Capital Economics in Toronto.

And with good reason. Dark clouds continue to loom over the economic outlook.

The euro zone’s debt-ravaged economy shrank in the second quarter after flat-lining in the first, a report showed on Tuesday.

Europe’s travails have fueled economic uncertainty, and appear to be choking hiring in the United States.

U.S. small business sentiment fell for a third straight month in July as owners worried about sales revenue, according to a survey by the National Federation of Independent Business.

SOFTER ENERGY PRICES

By undercutting global growth, the debt crisis in the euro zone has also pushed oil prices lower since March.

While the Labor Department’s index of producer prices, which measures prices received by farms, factories and refineries, climbed 0.3 percent last month on higher costs for consumer goods and food, the gain was muted by a drop in energy prices.

Still, core inflation at the wholesale level accelerated in July. The core measure has held at higher levels even as a sharp drop in energy prices over the past year has pulled overall producer prices lower.

Some policymakers at the Fed worry that further moves to lower borrowing costs could fuel inflation, though the central bank has said it was ready to do more to help the economy if needed.

“This report suggests core inflation will persist despite price swings in food and energy,” said Cooper Howes, an economist at Barclays in New York.

(Additional reporting by Lucia Mutikani in Washington and Gertrude Chavez-Dreyfus and Wangfeng Zhou in New York; Editing by Neil Stempleman, Tim Ahmann and Leslie Adler)