Mortgage rates drop to lowest since 1960s

Mortgage rates began the year by dropping to their lowest levels since the early 1960s, with the average 30-year fixed-rate loan commitment falling to 5.85 percent, Freddie Mac said Thursday.

“Just when we were sure mortgage rates couldn’t possibly drop any lower, we were surprised yet again,” said Frank Nothaft, chief economist for the mortgage giant.

The 30-year mortgage rate fell from last week’s 5.93 percent average, with buyers paying an average 0.6 point. The comparable rate for 15-year fixed-rate mortgages also fell this week, while the average one-year adjustable-rate mortgage rose slightly to an average 4.06 percent this week, with an average 0.7 point.

Mortgage rates dropped sharply in 2002, spurring waves of refinancing activity.

Retailing

Home Depot lowers earnings outlook

Atlanta — The Home Depot cut its earnings per share estimate for the fiscal year ending in February, citing slowing sales during the holiday season.

The country’s largest home improvement chain revised its guidance Thursday from $1.57 per share to between $1.53 and $1.55 a share. It said sales declined as much as 10 percent during December, while the company had been expecting a drop of 3 percent to 5 percent.

The announcement came after the markets closed and sent Home Depot shares down 8.6 percent in after-hours trading. For the year, Home Depot said, it expects total sales growth of 10 percent and earnings per share growth of 21 percent to 23 percent on a comparable 52-week basis for fiscal 2002.

Fallout

Bank settles Enron suits

New York — J.P. Morgan Chase & Co. has reached an agreement with its insurance companies to settle a $1 billion dispute over failed trading pacts with the now-bankrupt Enron Corp.

The New York bank said that under the deal announced Thursday, the 11 companies would pay “approximately 60 percent of the amount of the surety bonds they wrote,” or about $655 million.

J.P. Morgan Chase officials said during a telephone conference with Wall Street analysts that the bank would take a pretax charge of $400 million in the fourth quarter in connection with the settlement.