The news at a glance
Housing recovery gains speed; A dive on weak earnings reports; Apple unveils iPad Mini; Newsweek quits print; Google struggles with mobile ads
Real estate: Housing recovery gains speedThe housing market’s rebound is gaining momentum, said Alex Kowalski and Prashant Gopal in Bloomberg.com. New home construction surged 15 percent in September to its highest level since July 2008, a rise that could help boost job creation and economic growth. House prices also jumped 1.3 percent in the third quarter, the largest gain since 2006. Though existing-home sales dipped slightly in September from August, year-over-year sales increased for the 15th consecutive month. These figures offer clear evidence that the housing industry is “in the midst of a recovery,” said Larry Sorsby of New Jersey–based homebuilder Hovnanian Enterprises.
“Whether the worst is truly over” is anyone’s guess, said Neil Irwin in The Washington Post. But the latest figures on prices, sales, and construction activity are the “most solid evidence yet that the improvement is for real.” If the trends suggested by September’s numbers continue, the economy as a whole could get a much-needed shot in the arm from a resurgent housing market. A rise in residential investment from its recent level of 2.4 percent of GDP to the 4.1 percent average of the pre-bubble 1990s would add $262 billion in annual economic activity—“enough to finally put people back to work in a meaningful way.”
Markets: A dive on weak earnings reportsA slew of underwhelming corporate earnings reports this week rattled investors, sending markets sharply down, said Christina Rexrode in the Associated Press. Revenue fell at a number of blue-chip companies, including DuPont, 3M, UPS, and Xerox, signaling that the global “economy is far from healed, and that demand is weaker than a year ago.” The rest of the year may hold more bad news: Since July, 29 companies in the S&P 500 have updated their predictions for the fourth quarter; 23 have lowered their forecasts, while none expect results to improve.
Tech: Apple unveils iPad MiniApple debuted a smaller, cheaper version of its blockbuster iPad this week, in a bid to better compete with tablet rivals, said Poornima Gupta and Noel Randewich in Reuters.com. The 7.9-inch iPad Mini weighs less than a pound and is priced as low as $329. Apple initially resisted designing a smaller tablet, but the popularity of Amazon’s Kindle Fire and Google’s Nexus 7, which sell for $199, has proven that “demand for a pocket-sized slate exists.” All three companies are now “vying to get their devices on shopping lists” for the holiday season.
Media: Newsweek quits printAfter 79 years chronicling American life and global events, Newsweek will shutter its print edition at the end of the year, said David Folkenflik in NPR.org. The magazine’s 1.5 million subscribers—a 50 percent decrease since 2005—will be given access to a new, subscription-based digital publication called Newsweek Global. The announcement was a “bow to gravity” from editor Tina Brown, whose “unique blend of buzz and brio proved incapable of counteracting Newsweek’s plummeting circulation and advertising amid an accelerating news cycle.”
Companies: Google struggles with mobile adsGoogle is finding it harder to make money in the mobile world, said Claire Cain Miller in The New York Times. The price that advertisers paid Google per ad click fell for the fourth consecutive quarter, driven by the shift to cheaper mobile ads, according to the company’s “disappointing earnings report” last week. Overall, Google’s profits for the third quarter fell 20 percent from a year earlier. Those results, plus the inadvertent release of the earnings several hours early, caused the stock to drop 8 percent last week before trading was halted.