Wednesday, Sept. 17, 2003 | 11:32 a.m.
Builder divides Vegas operation
M.D.C. Holdings Inc. of Denver, whose subsidiaries build homes under the Richmond American Homes brand, today announced that its Las Vegas operation has been split into two divisions: Las Vegas North and Las Vegas South. "The move was prompted by solid home order increases and the company's significant growth in the region," M.D.C. said.
Ernie Belair, executive vice president for the Las Vegas division, was promoted to president for the Las Vegas North division. Utah division President Chris Mandarich was named president of the Las Vegas South division.
Richmond American said it's on track to close more than 2,000 home sales in Las Vegas in 2003.
Insider named CEO
SANTA BARBARA, Calif. -- Tenet Healthcare, the troubled chain of for-profit hospitals, said on Tuesday that it had named Trevor Fetter as its chief executive. Fetter had been serving as acting chief executive since May, when investors pressured Jeffrey C. Barbakow, who had headed the company for a decade, to step down.
In North Las Vegas, Tenet owns Lake Mead Hospital, which it's trying to sell.
Rates steady
WASHINGTON -- The Federal Reserve retained its cautious outlook for the economy on Tuesday, leaving short-term interest rates unchanged at 1 percent.
The decision was not a surprise as Fed officials announced a month ago that they were prepared to keep the benchmark federal funds rate at its current low levels "for a considerable period."
Tobacco giant cutting jobs
CHARLOTTE, N.C. -- R.J. Reynolds Tobacco, the nation's second largest cigarette maker, will cut about 2,600 jobs, or 40 percent of its work force, the company announced today.
"Reynolds Tobacco is fundamentally changing the way it operates its business in order to deliver profit growth," said Andrew J. Schindler, chairman and chief executive officer of RJR.
Its shares rose more than 10 percent in morning trading on word of the restructuring.
The announcement comes as the major cigarette makers are facing increasing competition from lower-priced cigarettes. That has driven them to boost promotional spending such as offering two packs for the price of one to protect their brands.
In July, RJR said its profit fell 67 percent and sales dropped 16 percent in the April-June period in part because of higher promotional costs.
House construction declines
WASHINGTON -- Housing construction declined by 3.8 percent in August as higher mortgage rates made builders a bit cautious about breaking ground on new projects. However, the level of building activity was still considered fairly robust.
The Commerce Department reported today that builders broke ground on 1.82 million housing units at a seasonally adjusted annual rate last month. The level of housing construction in August was lower than the 1.84 million unit pace that analysts were predicting.
However, housing construction in July clocked in at a red-hot rate of 1.89 million units, according to revised figures. That was even stronger than previously reported and marked the highest level of housing construction seen in 17 years.
The housing market also is staying healthy despite a recent upswing in longer-term mortgage rates. In the middle of June, rates on benchmark 30-year mortgages slid to 5.21 percent, the lowest level in more than four decades. But shortly after that, they began a fairly steady rise. Last week, however, rates on 30-year mortgages dropped to 6.16 percent.
Factors contributing to the recent rise in mortgage rates include: signs that the economy is picking up speed and concern about swelling federal budget deficits, economists say. Those factors have pushed bond rates up, causing long-term mortgage rates to rise.
Economists expect sales of both new homes and previously owned homes to hit record highs this year, even if higher mortgage rates slow activity somewhat in the coming months.
In August, work on new single-family homes declined by 4 percent from the previous month to a rate of 1.48 million units. Construction of multifamily housing, including apartments and condos, also fell by 4 percent last month to a rate of 308,000.
Higher mortgage rates nipped home builders sales prospects a bit for September, but they still expressed optimism about sales over the next six months.
"Builders had one of the hottest summers ever this year in terms of housing demand, largely because of the incredibly favorable interest rates just before mid-year," said National Association of Home Builders President Kent Conine, a home and apartment builder from Dallas.
After longer-term interest rates went up, "it was to be expected we'd adjust our expectations accordingly. Even so, there is a strong current of optimism throughout our entire industry that today's very healthy activity is sustainable through at least the end of this year."
By region, housing construction plunged by 23.3 percent in the Northeast to a rate of 145,000. In the South, housing construction dropped by 2.7 percent to a pace of 851,000 and in the West, housing starts dipped by 1.8 percent to a rate of 436,000. But in the Midwest, housing construction increased 1 percent to a rate of 388,000.
In an encouraging note, housing permits -- a good barometer of current demand -- rose by 4.5 percent in August from the previous month to a rate of 1.89 million units, the highest level since December 2002. And, permits for single-family homes rose by 2.9 percent to a record high monthly rate of 1.48 million units.
archive
