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BUSINESSWednesday 30 December
Pep Boys heads for new highs on latest offer from Icahn
NEW YORK (AP) — Shares of from Japanese tiremaker the exit of CEO Mike Odell ing for more action from from just last year, accord-
Pep Boys are heading for Bridgestone turned into a and the arrival of three Bridgestone. About an hour ing to Dealogic.
their highest point in eight fight for control with Icahn, new board members who before the opening bell, It is the first time that take-
years after the company who boosted his bid for the were nominated by a huge shares were hitting levels overs have exceeded the
received yet another offer Philadelphia auto chain on stakeholder in the compa- not seen since the middle $5 trillion level, fueled by
from activist investor Carl Monday to $18.50 a share in ny. The company’s tire busi- of 2007. extremely low interest rates.
Icahn, putting the deal in cash. That’s up $2 per share ness has been under pres- The fight over Pep Boys is The Federal Reserve raised
the neighborhood of $1 bil- from Icahn’s earlier bid and sure and it has sought new a small part of an unprec- interest rates for the first
lion. its $1.50 better than the lat- ways to generate cash. edented year in mergers time in nearly a decade
Shares of the auto parts est from Bridgestone Corp. Shares have jumped 78 and acquisitions. The val- less than two weeks ago.
and services retailer have The initial offer from Bridge- percent from this time last ue of buyouts proposed Pep Boys has about 800
been ratcheting steadily stone was for $15 per share. year and are up 6 percent and completed this year outlets selling auto parts
higher over the past two Rumors of a sale rose more in premarket trading Tues- has reached a staggering and offering vehicle
months as a takeover bid than two years ago with day and investors are wait- $5.03 trillion, up 37 percent maintenance.q
American home prices climb, helped by solid job market
strengthened confidence rate — what banks charge
in the economy.
“The U.S. housing market each other to lend over-
as a whole made great
progress in 2015, as the big night — remains low at 0.25
and occasionally volatile
bounce off the bottom percent to 0.5 percent,
we experienced from 2012
through 2014 gave way to such that mortgage rates
a more stable and sustain-
able environment,” said are unlikely to return to their
Svenja Gudell, chief econ-
omist at the real estate firm historic averages.
Zillow.
Rising demand, however, When the Fed previous-
hasn’t been met with an in-
crease in sales listings, caus- ly hiked this rate from 1
ing prices to rise much fast-
er than inflation or wages percent to 5.25 percent
this year. This could limit the
number of first-time buy- through the middle of 2007,
ers coming into the market
next year. Still, many buyers mortgage rates increased
are also benefiting from 30-
year, fixed-rate mortgages a mere 0.75 points.
averaging less than 4 per-
cent, making it cheaper to “These data suggest that
borrow for a home. Mort-
gage rates have historical- potential homebuyers
ly been closer to 6 percent.
Borrowing costs are ex- need not fear runaway
pected to rise shortly after
the Federal Reserve this mortgage interest rates,”
month raised a key short-
term interest rate for the said David Blitzer, chairman
first time in nearly a de-
cade. Yet the federal funds of the index committee at
S&P Dow Jones.
But the gains have been
uneven. San Francisco,
Denver and Portland, Or-
A sign indicates a site has been sold in a new home development in Nashville, Tenn. Steady job egon led with reported
growth, low mortgage rates and tight inventories helped fuel rising U.S. home prices in October,
according to a report released Tuesday. increases of 10.9 percent
(AP Photo/Mark Humphrey) over the past year. Prices in
Chicago and Washington,
District of Columbia rose
JOSH BOAK Case-Shiller 20-city home pace during much of 2015, less than 2 percent. The
Associated Press price index rose 5.5 per- as strong hiring has bol-
WASHINGTON (AP) — cent in the 12 months end- stered a real estate market 20-city index remains 11.5
Steady job growth, low ing in October, up from a still recovering from a hous-
mortgage rates and tight 5.4 percent pace in Sep- ing bust that triggered a percent below its peak in
inventories helped fuel ris- tember, according to a re- recession eight years ago.
ing U.S. home prices in Oc- port released Tuesday. Home sales have increased July 2006, with metro ar-
tober. Home values have climbed this year as the 5 percent
The Standard & Poor’s/ at a roughly 5 percent unemployment rate has eas such as Cleveland,
Detroit, Miami, Minneapolis
and Tampa still significantly
below their pre-recession
highs.q
Healthy job market lifts consumer confidence in December
AP Economics Writer consumers’ assessment est rate it controls for the “U.S. consumers regained cans’ mood — the Univer-
of the current state of the first time since 2006. a bit of their swagger in sity of Michigan’s consumer
WASHINGTON (AP) — A economy remains posi- Hiring has been healthy in December,” Jennifer Lee, sentiment index — rose this
tive, particularly their as- 2015. Employers are add- senior economist at BMO month to the highest level
stronger job market lifted sessment of the job mar- ing an average of 210,000 Capital Markets, wrote in a since July. The Michigan in-
ket,” said Lynn Franco, the jobs a month through No- research report. She noted dex rose to 92.6 in Decem-
consumer confidence group’s director of eco- vember. Unemployment that confidence rebound- ber from 91.3 last month. It
nomic indicators. More has stayed at a seven- ed the most among young has averaged 92.9 in 2015,
in December, a busi- than two-thirds of consum- year low 5 percent for two households (those headed the highest annual aver-
ers said they expected in- straight months. Confi- by someone younger than age in 11 years. The Michi-
ness group said Tuesday. terest rates to rise over the dence had dipped unex- 35), potentially a sign that gan survey finds that Ameri-
next year, highest share pectedly in November and more first-time homebuy- cans are pleased with low
The Conference Board’s since August 2013. On Dec. this month remained below ers are ready to enter the inflation, including low gas-
16, the Federal Reserve readings around 100 from housing market. oline prices, which boosts
consumer confidence in- raised the short-term inter- August through October. Another gauge of Ameri- their purchasing power. q
dex rose to 96.5 this month
from November’s revised
92.6. Americans were more
optimistic about current
conditions and about the
future.
“As 2015 draws to a close,
