Mortgage applications up; likely driven by investors

The number of people applying for a mortgage jumped last week. But analysts cautioned that the increase was likely driven by investors, not first-time homebuyers who are needed to help housing markets recover.

The Mortgage Bankers Association says its overall mortgage application index rose 16.1 percent from the previous week, the biggest jump since June. But the index is still far off where it was last spring and summer following four straight months of declines.

The refinance index rose 17.2 percent and the purchase index increased 12.5 percent, to the highest level so far this year. The refinance share of activity increased to 65.5 percent of all applications from 64.9 percent the previous week.

Mortgage rates have been at their lowest levels in decades, but that hasn’t helped home sales much.

 

Energy firm may seek bankruptcy protection

Dynegy Inc. said it may have to seek bankruptcy protection if it can’t meet certain earnings requirements by its creditors this year.

The power producer also announced Wednesday that it has elected four board members, two of whom were nominated by billionaire investor Carl Icahn’s company and one by Seneca Capital – one of Dynegy’s biggest shareholders.

Both groups have wrestled for more control over the company. A $665 million takeover offer from Icahn, which was opposed by Seneca, expired last month after it failed to get enough support from shareholders.

Dynegy has been hurt by lower power prices over the last two years.

The company owns power plants that burn natural gas, coal and oil. It sells electric energy and related services to grids and utilities in the Midwest, the Northeast and the West.

 

Allstate CEO took pay cut, but still earned $8.6 million

Insurer Allstate Corp. gave its CEO a pay package in 2010 that was worth $8.6 million, a cut of about 8 percent from 2009, according to a company filing made Wednesday with the Securities and Exchange Commission.

The decline came in a year when the Northbrook, Ill.-based property and casualty insurer’s net income rose 9 percent but its operating profit fell 18 percent.

CEO, Chairman and President Thomas Wilson received $9.4 million in 2009, according to an Associated Press analysis of the filing.

In 2010, Wilson, 53, earned a base salary of $1.1 million, down marginally from 2009. His annual base salary officially rose in March 2010, but the salary he actually received fell slightly from 2009, because that year’s salary included some of his 2008 earnings, the filing said.

 

Medtronic says warnings from FDA are resolved

Medtronic Inc., the world’s largest medical device company, said Wednesday it has resolved two warning letters from the Food and Drug Administration over lax oversight at two facilities, clearing the way for new product approvals.

The FDA cited the company in November 2009 and June 2009 over problems at facilities in Mounds View, Minn., and Juncos, Puerto Rico.

The violations involved unsatisfactory procedures for preventing and identifying problems with its devices, documenting those problems and notifying the FDA.

 

St. Patrick’s Day spending expected to rise in 2011

Retailers may be seeing more green this St. Patrick’s Day.

According to the National Retail Federation, 122 million Americans, or 52 percent, plan to celebrate the Irish holiday March 17, up from 45 percent last year and the most in the survey’s eight-year history.

Consumers also said they plan to spend slightly more than they did last year, an average of $33.97 compared with $33.05 in 2010. Total spending is expected to reach $4.14 billion.

 

Daimler, Rolls-Royce may partner to buy engine maker

Daimler AG and Rolls-Royce Group PLC said Wednesday they will jointly offer to buy German engine and components maker Tognum AG in a deal valued at 3.2 billion euros ($4.45 billion), strengthening their presence in a fast-growing market.

Daimler, the German car maker, and Rolls-Royce, the U.K. engine giant, had confirmed Monday they were in talks with Tognum, sending the firm’s stock price up 23 percent.

Daimler and Rolls-Royce said Wednesday they will offer Tognum shareholders 24 euros per share in cash. This represents a premium of 30 percent above Tognum’s closing price on March 4, the last trading day before the deal was rumored in the markets.