Business News: Carbon limits may raise prices

photo Pollution tile

Carbon limits may raise prices

An EPA plan to regulate carbon emissions from fossil fuel power plants will boost electricity rates by up to 18 percent in Tennessee, according to a study prepared by a business group funded by the coal, railroad and manufacturing industries.

An analysis released Thursday by NERA Economic Consulting projects that the Obama administration's Clean Power Plan would push up electricity rates by double-digit levels in 43 states, including Tennessee, Georgia and Alabama.

Mike Duncan, a former chairman of the Tennessee Valley Authority who is now CEO of the American Coalition for Clean Coal Electricity, said the proposed EPA carbon controls are "plaqued with problems" and would be "exorbitantly expensive," costing more than five times as much as the Clean Air Act adopted in 2010.

"I have one thing to say to the president -- pull this rule before irrevocable consequences hit American people and businesses," Duncan said.

The EPA rules are intended to cut emissions of carbon dioxide, which studies indicate may contribute to global climate change.


Mortgage rates hit 16-month low

Average U.S. mortgage rates tumbled this week. The 30-year loan hit its lowest level since June 2013 as Treasury bond yields marked new lows amid concern over global economic weakness.

It was the fourth straight week of declines for mortgage rates, making it more affordable to borrow to buy a home.

Mortgage company Freddie Mac said Thursday that the nationwide average for a 30-year loan dipped to 3.97 percent from 4.12 percent last week. The average for a 15-year mortgage, a popular choice for people who are refinancing, fell to 3.18 percent from 3.30 percent.

Mortgage rates often follow the yield on the 10-year Treasury note. The 10-year note traded at 2.13 percent Wednesday, down from 2.34 percent a week earlier. It traded at 2.11 percent Thursday morning. Bond yields rise when bond prices fall.


BASF sells textile unit

Chemical and oil company BASF SE says it is selling its textile chemicals business to Swiss-based Archroma for an undisclosed amount.

BASF, headquartered in Ludwigshafen, Germany, said Thursday that the deal requires antitrust approval and is expected to close in next year's first quarter. The business is based in Singapore and the transaction involves some 290 employees, 230 of them in Asia.

Archroma supplies specialty chemicals to the textile, paper and emulsions industries and has about 3,000 employees.

The president of BASF's performance chemicals division, Hans W. Reiners, said in a statement that "a critical mass is necessary to grow the business successfully" as the industry consolidates and BASF sees good growth prospects for the unit with Archroma.


Builders have less confidence

U.S. homebuilders' confidence fell in October after four months of gains which had pushed the indicator to the highest point in nine years.

The National Association of Home Builders/Wells Fargo said Thursday that its index dropped to a reading of 54 after climbing to 59 in September, the highest level since November 2005, right before the housing bubble burst.

Readings above 50 indicate more builders view sales conditions as good rather than poor.

Analysts said readings in the mid-50s were in line with the current modest pace of recovery in housing. Sales of new homes did jump in August to the fastest pace since May 2008. But activity is still being held back by sluggish wage growth and a price surge that has put homes out of reach for many Americans.

The latest sentiment index showed that builders' views on current sales, their outlook for sales over the next six months and traffic by prospective buyers all fell in October.

Economists said the small decline did not alter their views that housing prospects remained favorable in coming months.

"Historically low mortgage interest rates, steady job gains and significant pent up demand all point to continued growth of the housing market," said David Crowe, chief economist for the home builders.


Factory output up in September

U.S. manufacturing output rose in September, led by gains for aerospace products, furniture, clothing and plastics.

The Federal Reserve said Thursday that factory production rose 0.5 percent in September after falling 0.5 percent in August. Over the past 12 months, manufacturing output has increased 3.7 percent.

The continued pace of manufacturing output will likely be a bellwether for the broader economy. Job growth has been solid for much of 2014, yet the stock market has been hammered over the past week over concerns about Europe's financial footing, the slowdown in China's economy and Ebola outbreaks across three continents. Stalled growth -- if not the risk of recession -- in much of Europe could cut into demand for U.S. exports.

Total industrial production surged 1 percent last month, as output from mines and utilities both increased.

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