Finance topics

Spain sold 4.13 billion euros ($5.9 billion) of three-year bonds and its borrowing costs fell after Portugal said it would seek a European Union bailout.

Spain sold the bonds at an average yield of 3.568 percent, compared with 3.592 percent when it sold debt of similar maturity on March 3, the Treasury said. Demand was 1.79 times the amount offered, compared with 3.04 times on March 3, and the amount sold compared with a maximum target of 4.5 billion euros.

The debt sale, hours after Portuguese Prime Minister Jose Socrates said he would ask the European Union for financial help, was a test of investor sentiment as Goldman Sachs Group Inc. said contagion from the sovereign debt crisis would stop at Portugal. Spain, in an attempt to distance itself from other so- called peripheral nations, is implementing the deepest budget cuts in at least three decades while trying to shore up savings banks suffering a surge in bad loans.

“The fact that Portugal seeks help early reduces contagion risk,” Mohit Kumar, a fixed-income strategist at Deutsche Bank AG in London, said by telephone. “The bonds have performed very well; any decline in Spanish bonds in the near-term is likely to come from their rich valuation rather than contagion concern.”

Yield Spread

The gap between Spanish and German 10-year borrowing costs was unchanged from yesterday after the sale at 180 basis points. That compares with a euro-era record of 298 basis points on Nov. 30 after Ireland became the second euro nation after Greece to seek a bailout. Spanish banking stocks rose, with Banco Santander SA (SAN) gaining 2 percent.

“We do not expect any other EMU sovereign to be in need of financial assistance,” Francesco Garzarelli, Goldman Sachs’s London-based chief interest-rate strategist, said in a report to clients payday loans. He expects the spreads between the yields of Italy, Spain, Belgium and those of AAA-rated economies like Germany to “slowly compress,” he said.

Bank of Spain Governor Miguel Angel Fernandez Ordonez said on March 5 that Portugal isn’t “very important” for Spanish banks. Spain has foreign claims amounting to $85 billion in Portugal, according to data from the Basel-based Bank of International Settlements. Portugal accounted for 9 percent of Spain’s global exports in 2010, according to Spanish Industry Ministry data.

Spain has overhauled labor and pension laws and pledged further measures to make its economy more competitive. It aims for a budget deficit of 6 percent of gross domestic product this year, compared with 9 percent last year when the shortfall was the third-largest in the euro region.

‘Right Things’

“Contagion to Spain will be extremely limited,” Guillaume Menuet, senior European economist at Bank of America Merrill Lynch, said in a telephone interview. “Spain has been doing all the right things and ticking all the boxes.”

Spain also adopted austerity measures including public-wage cuts earlier than Portugal’s Socialist Premier Socrates, who resigned on March 23 after failing to get parliamentary approval for his proposed budget cuts. Elections are scheduled in Portugal for June 5, making the negotiation of any EU bailout more difficult.

Spanish Prime Minister Jose Luis Rodriguez Zapatero has pledged to complete his four-year term. He announced on April 2 he won’t seek re-election, unleashing a leadership battle in the ruling Socialist Party after regional elections on May 22.

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Japan’s business confidence fell after last month’s tsunami disaster and the ensuing nuclear crisis, and manufacturers were feeling more pessimistic about the economy, the central bank said Monday.

The Bank of Japan’s closely watched “tankan” survey of business sentiment showed the main index for large manufacturers slumped to 6 after the March 11 earthquake and tsunami, down from 7 before the disasters.

The index of sentiment among big manufacturers in the next three months tumbled to minus 2 from 6. That among small-and mid-sized manufacturers in the coming three months also plummeted to minus 18 from minus 6.

The tankan figure represents the percentage of companies saying business conditions are good minus those saying conditions are unfavorable, with 100 representing the best mood and minus-100 the worst.

The central bank released a post-quake version of its March tankan survey to reflect the impact of the disasters and the nuclear crisis they spawned on the country’s business sentiment.

“The results underscored growing worries among all manufactures after the tsunami,” said Yoko Takeda, an economist at Mitsubishi Research Institute Inc. “Some companies lost their factories in the tsunami, while many others were forced to shut down production due to massive disruptions in supply chains.”

Last month’s magnitude-9.0 earthquake and ensuing tsunami decimated much of northern Japan, killing up to 25,000 people. More than 12,000 are confirmed dead, and another 15,500 are missing.

The March 11 disaster also destroyed many plants in the region, forcing a string of companies, including Toyota Motor Corp. and Sony Corp., to suspend output due to a shortage in components.

The quake and tsunami also damaged Tokyo Electric Power Co.’s nuclear plant in Fukushima, forcing it to cut its daily power supply in Tokyo and its environs. Power shortages forced many factories to suspend output.

The tsunami-wrecked Fukushima nuclear plant has continued to spew radiation which has made its way into vegetables, raw milk, tap water in Tokyo, and now the ocean.

Japan’s government has said the cost of the earthquake and tsunami that devastated the northeast could reach $309 billion, making it the world’s most expensive natural disaster on record.

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President Barack Obama offered to cut another $6.5 billion in government spending, a proposal rejected as inadequate by Republicans in negotiations over the federal budget and avoiding a government shutdown.

Michael Steel, House Speaker John Boehner’s spokesman, yesterday called the Obama proposal “little more than the status quo,” and said, “The American people have been clear that status quo spending in Washington is simply unacceptable.”

Don Stewart, a spokesman for Senate Minority Leader Mitch McConnell, was similarly dismissive, saying the Obama offer would “pay for two months of interest on the stimulus bill.”

House Republicans last month passed a plan to cut $61 billion from 2011 spending, which would mean reductions of 10 percent or more in hundreds of programs. Democrats, who control the Senate, have balked at that measure.

White House National Economic Policy Director Gene Sperling told reporters yesterday, “We are willing to cut spending further if we can agree on cuts and find common ground in a way that does not do harm to the economy in the short term or in the long term through gutting education, research, innovation — things that are critical to winning our economic future.” He didn’t identify which programs would be cut.

Congressional leaders of both parties met behind closed doors yesterday with Vice President Joseph Biden to begin negotiations. Afterward, Biden issued a statement saying “the conversation will continue.”

Attending the meeting with Biden were the four top congressional leaders — Boehner, of Ohio, House Democratic leader Nancy Pelosi of California, Senate Majority Leader Harry Reid, a Nevada Democrat, and McConnell, a Kentucky Republican — as well as White House officials including Budget Director Jack Lew and Obama’s chief of staff, William Daley.

Stopgap Funding

Obama signed a stopgap measure March 2 that cuts spending this year by $4 billion while funding most of the government at current budget levels until March 18. That gives lawmakers two weeks to decide funding levels for the fiscal year ending Sept. 30 or risk a shutdown.

Democrats have said extending current budget levels through Sept. 30 would amount to $41 billion in savings when compared with the 2011 budget request Obama released last year.

Sperling argued that combined with $4 billion cut in the stopgap measure and the $6.5 billion spending decrease administration now was offering, the total would amount to roughly half of the $100 billion Republicans had pledged last year to cut from the president’s 2011 budget request payday loan.

That request never advanced in last year’s Congress and the government has continued to be funded at 2010 levels.

‘Unacceptable’

House Majority Leader Eric Cantor, a Virginia Republican, rejected the Democrats’ math. “That’s unacceptable to our side,” he said. “It’s unacceptable to the American people.”

Cantor said his colleagues want the equivalent of $2 billion in cuts per week through Sept. 30. That would track with the $61 billion in cuts sought by the House bill.

White House spokesman Dan Pfeiffer said before the meeting Biden convened that “while there may be some disputes on math and some other things heading into this, we remain optimistic we’re going to be able to get this done.”

McConnell said that in the Senate version of a budget bill he would seek the $61 billion in cuts approved by the House, though he hasn’t endorsed that measure’s specific cuts. The bill’s provisions include spending reductions in programs affecting education, the environment, health care, energy, science and the arts. The Peace Corps budget would be cut by 20 percent and the maximum Pell college tuition grant would be slashed by 15 percent.

Some Senate Republicans say they won’t vote for any budget bill that contains less than the $61 billion in cuts. “I can’t under any circumstances vote for anything less than that,” said South Carolina Republican Jim DeMint.

Policy Disputes

The negotiations also must resolve a number of policy measures approved by the House, including a ban on funds for Obama’s health-care overhaul and for Planned Parenthood, which provides abortions. Democrats want those provisions deleted.

Some Democratic lawmakers said they don’t want to focus on spending cuts until Congress considers ways of raising more federal revenues through taxes, such as increases on those earning more than $250,000 a year or ending breaks for oil and gas companies.

“I’m not going to vote for anything unless there’s revenues in it,” said Senator Tom Harkin, an Iowa Democrat. “From now on, if there’s something that’s just cutting spending, I’m not for it. We’ve got to do both.”

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World stock markets were higher Friday as oil prices eased and Wall Street stabilized after two days of sharp losses amid a political revolt threatening to topple the government of OPEC-member Libya.

Oil prices hovered above $98 a barrel in Asia _ down from $103 the previous day _ after experts said the crisis in Libya may have cut crude supplies less than previously estimated. In currencies, the dollar was higher against the yen and narrowly up against the euro.

European bourses bounded upward in early trading as investors shook off caution over the events in Libya.

Britain’s FTSE 100 rose 0.4 percent to 5,940.75. Germany’s DAX was up 0.2 percent to 7,143.40 and the CAC-40 in Paris rose 0.3 percent to 4,021.59. Wall Street was set to gain, with Dow Jones industrial futures 0.4 percent higher to 12,080 and S&P 500 futures up 0.3 percent to 1,306.80.

Key indexes in Asia closed higher after struggling early in the day to find direction.

Japan’s Nikkei 225 stock average rose 0.7 percent to close at 10,526.76 and South Korea’s Kospi also added 0.7 percent, to 1,963.43. Hong Kong’s Hang Seng index jumped 1.8 percent to 23,012.37 and Australia’s S&P/ASX 200 was 0.6 percent higher at 4,836.50.

The benchmark Shanghai Composite Index was virtually unchanged at 2,878.57, and down 0.7 percent for the week, while the Shenzhen Composite Index edged up less than 0.1 percent to 1,280.30 in lackluster trading.

Huaxin Cement Co., which has seen strong gains recently on expectations of sustained strong demand for construction materials, hit the daily upward limit of 10 percent.

“With the annual session of the national legislature beginning next week, shares are trending with forecasts for the government’s plans. Since the government plans to build more than 10 million low-cost housing units, cement companies saw strong gains,” said Peng Yunliang, an analyst at Shanghai Securities in Shanghai.

Toyota Motor Corp. ended 2.1 percent higher. U.S. investigators closed an investigation into the Japanese automaker after it agreed to recall another 2.7 million vehicles to address accelerator pedals that could become trapped in floor mats or jammed in driver’s side carpeting. That satisfied the Transportation Department that Toyota’s recalls for pedal entrapment were sufficient.

Airline stocks that had sagged after the spike in the cost of crude regained their stride after the International Energy Agency said the rebellion in Libya may have cut oil production less than originally feared. Saudi Arabia also pledged to increase production to make up for any shortfalls. Cathay Pacific Airways Ltd. jumped 3.6 percent, Korean Air Lines vaulted 4.8 percent, and Qantas Airways Ltd. rose 2.1 percent.

But analysts cautioned that the end of the crisis was not yet in sight and that prices will likely spiral upward.

“I think oil prices are going to trade higher, even with Saudi assurances. I think OPEC wants to see higher oil prices,” said Tom Kaan of Louis Capital Markets in Hong Kong. “I am not optimistic on airlines or the transport sector.”

“Oil is pretty much unpredictable, but in the short term, I do not see oil trading back at $85 a barrel. I think the floodgates are open for oil prices” and they could go as high as $120, Kaan said.

Meanwhile, New Zealand’s benchmark retreated 0.1 percent three days after an earthquake in the second-largest city of Christchurch killed at least 113 people.

In New York on Thursday, investors were relieved to see oil prices fall for the first time in nine days.

The Dow Jones industrial average fell 37.28 points, or 0.3 percent, to 12,068.50. The broader Standard & Poor’s 500 index fell 1.30, or 0.1 percent, to 1,306.10. The Nasdaq composite rose 0.6 percent to 2,737.90.

The nation’s gross domestic product rose at a 3.2 percent annual rate in the October-December quarter. The U.S. Commerce Department will update its fourth-quarter estimate later Friday. Economists think the figure will be revised up slightly to 3.3 percent.

In currencies, the dollar rose to 81.94 from 81.77 yen late Thursday. The euro slipped slightly to $1.3802 from $1.3807 following a sharp rise over the past 10 days.

Analysts said the gains in previous days were probably due to expectations that European interest rates would be raised before Federal Reserve Chairman Ben Bernanke does the same in the U.S. Higher rates typically support a currency’s value.

Benchmark crude for April delivery was up $1 to $98.28 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 82 cents to settle at $97.28 a barrel on Thursday.

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More people bought previously occupied homes in January. But the increase was driven by rising foreclosures and all-cash purchases by investors, while the number of first-time buyers shrank.

Prices sank to their lowest levels in nearly nine years, a troubling sign for the struggling housing sector.

Sales of previously occupied homes rose slightly to a seasonally adjusted annual rate of 5.36 million, the National Association of Realtors said Wednesday. That’s up 2.7 percent from 5.22 million in December.

Still, the pace remains far below the 6 million homes a year that economists say represents a healthy market. And the number of first-time home-buyers fell to 29 percent of the market _ the lowest percentage of the market in nearly two years. A more healthy level of first-time home-buyers is about 40 percent, according to the trade group.

Foreclosures represented 37 percent of sales in January. All-cash transactions accounted for 32 percent of home sales _ twice the rate from two years ago, when the trade group began tracking these deals. In places like Las Vegas and Miami, cash deals represent about half of sales.

Millions of foreclosures have forced down home prices, and more are expected this year. The median price of a home sold in January was $158,800. That’s a decline of 3.7 percent from a year ago and the lowest point since April 2002.

“Home prices continue to languish,” said Steven Wood, chief economist for Insight Economics. “Any recovery will be difficult to sustain given the still-large supplies of homes for sale and distressed properties.”

A major barrier for first-time home-buyers is tighter lending standards adopted since the housing bubble burst. These have made mortgage loans tougher to acquire. Banks are also requiring buyers put down a larger down payment. During the housing boom, buyers could purchase a home with little or no money down.

And some potential buyers who could qualify for loans are hesitant to enter the market, worried that prices will fall further. High unemployment is also deterring buyers. Job growth, while expected to pick up this year, will not likely raise home sales to healthier levels.

With mortgage rates rising, mortgage applications have been volatile. They’re now near their lowest levels in 15 years. Economists say it could take years for home sales to return to healthy levels.

Last year, home sales fell to 4.9 million, the lowest level in 13 years. And even that number, some say, was overstated.

CoreLogic, a real-estate data firm in Santa Ana, Calif., said it’s found that 3.3 million homes were sold last year, far fewer than the National Association of Realtors’ 4.9 million figure. CoreLogic has suggested that the Realtors figure is inflated.

Since 1968, the Realtors group has produced the monthly report on the number of previously occupied homes sold. The group serves as chief advocate and lobbying arm for real estate agents. It says it’s reviewing its 2010 yearly estimate.

One obstacle to a housing recovery is the glut of unsold homes on the market. Those numbers fell to 3.38 million units in January. It would take 7.6 months to clear them off the market at the January sales pace. Most analysts say a six-month supply represents a healthy supply of homes.

Analysts said the situation is much worse when the “shadow inventory” of homes is taken into account. These are homes that are in the early stages of the foreclosure process but have not been put on the market yet for resale.

For January, sales were up in three of the four regions of the country led by an 7.9 percent rise in the West. Sales rose 3.6 percent in the South, 1.8 percent in the Midwest and down 4.6 percent in the Northeast.

The January increase was driven by a 2.4 percent rise in sales of single-family homes. It pushed activity in this area to an annual rate of 4.69 million units. Sales of condominiums rose 4.7 percent to a rate of 670,000 units.

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The Federal Reserve earned $13 billion in interest and fee income on its liquidity programs from August 2007 until December 2009, according to the New York Fed.

The facilities generated $20 billion in interest and fees before taking into account the $7 billion cost of funds, Michael Fleming and Nicholas Klagge, staff members at the New York Fed said in a paper released today. The period between August 2007 and December 2009 represents the time the facilities were used the most, the paper said.

The central bank’s payments to the U.S. Treasury rose 65 percent last year to a record $78.4 billion on increased income from mortgage and Treasury securities it bought to boost economic growth. The figure was based on preliminary unaudited results and released last month. The Fed remitted $47.4 billion in 2009.

The Obama administration projected in its budget that the Fed’s payments to the U.S. government will peak this year and decline each of the next four years, approaching levels from before the financial crisis.

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U.S. mortgage rates jumped to the highest level since April, reducing affordability for homebuyers as the housing market struggles to recover.

The average rate for a 30-year fixed loan rose to 5.05 percent in the week ended today from 4.81 percent, Freddie Mac said in a statement. The average 15-year rate climbed to 4.29 percent from 4.08 percent last week, according to the McLean, Virginia-based mortgage-finance company.

Mortgage rates are rising along with yields on the benchmark 10-year Treasury note, which a reached a nine-month high this week. The increase in borrowing costs from record-low levels in November has already shown signs of reducing demand for home purchases and refinancing.

“Higher mortgage rates have clearly dampened activity,” Paul Dales, senior U.S. economist for Capital Economics Ltd. in Toronto, wrote in a note to clients yesterday after a drop in home-loan applications. “With demand for mortgage borrowing still so weak, it is hard to see housing activity strengthening much this year.”

Mortgage applications fell for the second time in three weeks, the Mortgage Bankers Association’s index showed yesterday. The group’s gauge of purchases decreased 1.4 percent in the week ended Feb. 4, and its refinancing measure dropped 7.7 percent.

The Obama administration is expected to present a report as soon as Friday with three options on how the government can phase out its involvement in the mortgage market, two people familiar with the plan said this week. One option would eliminate Freddie Mac and fellow mortgage-finance company Fannie Mae and their government-backed guarantee of mortgages. Another option would adhere more to the present system.

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China’s manufacturing expanded and input costs climbed, underscoring the case for more interest- rate increases to tame inflation pressures in the fastest- growing major economy.

A reading of 52.9 for a purchasing managers’ index released by China’s logistics federation on its website exceeded the 50 level dividing expansion and contraction. A PMI from HSBC Holdings Plc and Markit Economics rose to 54.5 from 54.4.

A rebound in input costs shown by the logistics federation survey underscored why companies from Baoshan Iron & Steel Co. to Starbucks Corp. have raised prices. The central bank may boost benchmark interest rates immediately after a Chinese Lunar New Year holiday, which begins tomorrow and ends Feb. 8, BNP Paribas SA. said.

“Intensifying inflation pressure shows the government may need to strengthen policy tightening,” said Isaac Meng, a Beijing-based economist at BNP Paribas. Economic growth may moderate “which may be desirable for policy makers as they seek to control inflation and asset bubbles,” he said.

The yuan strengthened for the first day in four, trading at 6.5924 per dollar as of 11:36 a.m. in Shanghai. The Shanghai Composite Index of stocks rose 0.2 percent.

The central bank has raised benchmark interest rates twice since mid-October and pushed banks’ reserve requirements to the highest in more than two decades to drain away cash that could stoke inflation. The government last month expanded measures to cool the real-estate market, including by raising minimum down- payment requirements for second-home purchases.

Property Prices

Home prices rose 1 percent in January, the biggest month- on-month gain in half a year, property website owner SouFun Holdings Ltd. said today.

“The strong growth momentum leaves room for Beijing to fully focus on checking liquidity and inflation pressure,” said Qu Hongbin, the Hong Kong-based chief China economist for HSBC. “Quantitative tightening in the form of reserve requirement ratio hikes will remain the most effective policy tools.”

The PMI released by the Beijing-based logistics federation and the National Bureau of Statistics gives an indication of manufacturing activity by surveying more than 820 companies in 20 industries, including energy, metallurgy, textiles, automobiles and electronics.

The HSBC/Markit study is of more than 400 businesses.

Below Estimates

The reading for the logistics federation’s PMI was below the 53.9 level in the previous month and the median estimate of 53.5 in a Bloomberg News survey of 13 economists. A measure of employment slid to 49, the lowest reading since March 2009, as migrant workers returned home ahead of the holiday payday loan lenders.

An input-price index rose to 69.3 from 66.7 in December as food costs climbed.

Bank of America Merrill Lynch economist Lu Ting said the data in the study were heavily distorted by the holiday and there are “no big worries on growth.”

Zhang Liqun, a senior researcher at the State Council’s Development Research Center, said that companies face “difficulties” as cost pressures intensify and new orders grow at a slower pace. He commented in a statement released with the logistics organization’s survey.

Domestic demand is stable, a slowdown in industrial output may be “bottoming out,” and inflationary pressure appears to be rebounding, the federation said in another statement. Slower output growth in real-estate related industries such as furniture, textiles, glass and cement needs attention, it said.

Outpacing U.S.

The World Bank estimates that China’s economy will expand 8.7 percent this year, three times the pace of the U.S., as developing economies continue to outperform richer nations. China’s expansion was 9.8 percent in the fourth quarter.

UBS AG estimates that China’s inflation exceeded 5 percent last month after slowing to a 4.6 percent annual pace in December. November’s 5.1 percent rate was the highest in 28 months.

The central bank indicated in a Jan. 30 report that capital inflows and higher labor and resource costs may add to inflation pressures. Tools for reining in liquidity and credit growth include interest rates, bill sales and reserve requirements, the People’s Bank of China said.

Policy makers aim to hold growth in M2, the broadest measure of money supply, at about 16 percent this year. Last year, the actual 19.7 percent gain compared with a target of 17 percent. Local-currency lending totaled 7.95 trillion yuan ($1.2 trillion) in 2010, exceeding the government’s 7.5 trillion yuan ceiling.

The latest measures to cool the property market include increasing down-payment requirements for second homes to 60 percent from 50 percent and trials of property taxes in Shanghai and Chongqing.

–Li Yanping, with assistance from Marco Lui, Belinda Cao, Huang Zhe and Jay Wang. Editors: Paul Panckhurst, Ken McCallum.

To contact Bloomberg News staff for this story: Li Yanping in Beijing at +86-10-6649-7568 or yli16@bloomberg.net

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Homebuilding probably dropped in December and sales of existing houses struggled to rebound from a post-tax credit slump, reflecting a market trying to regain its footing more than a year into the economic recovery, economists said before reports this week.

Builders began work on 550,000 houses at an annual rate, down 0.9 percent from November, according to the median estimate of 61 economists surveyed by Bloomberg News before Commerce Department data Jan 19. Other reports may show purchases of previously owned homes rose for a second month and a gauge of the economic outlook climbed.

KB Homes is among builders concerned unemployment stuck above 9 percent and a lack of confidence in the expansion may keep dissuading buyers. Federal Reserve policy makers have said they will go ahead with a second round of quantitative easing that will pump another $600 billion into financial markets by June in a bid to keep borrowing costs low.

“The main reason we’re not in a more typical booming recovery after a deep recession is that typically housing at this point would be growing very rapidly,” said Dean Maki, chief U.S. economist at Barclays Capital Inc. in New York. “It does not appear likely that it’s going to be a large contributor to growth anytime soon.”

Homebuilders have underperformed the broader stock market. The Standard & Poor’s Supercomposite Homebuilder Index climbed 2.3 percent last year, compared with a 13 percent gain for the S&P 500 Index. The builder gauge rose 3 percent to close at 288.46 on Jan. 14.

Home Construction

The projected drop in starts would follow a 3.9 percent increase in November that was the first gain in three months.

Builders had little incentive to take on work when house purchases slumped in mid-2010 following the expiration of a tax incentive of as much as $8,000, which required contracts to be signed by April 30 of 2010 and closed by the end of September.

Building permits, a sign of future construction, probably rose 2 percent to a 555,000 annual pace in December, economists project the construction report will also show.

A gain in permits, combined with a rising stock market, improving consumer expectations and fewer initial jobless claims helped buoy prospects for the world’s largest economy, a Conference Board report may show on Jan. 20. The New York-based group’s index of leading indicators rose 0.6 percent in December, the sixth straight gain, according to the Bloomberg survey median.

Credit’s Influence

While housing remains a weak link of the economy, sales of existing homes have begun recovering from their July 2010 slump that pushed them to the weakest rate in a decade’s worth of record keeping. Purchases of previously owned houses rose 3.8 percent in December to a 4.86 million annual pace from the prior month, economists forecast in the Bloomberg survey no fax payday loan. The National Association of Realtors will release the figures on Jan. 20.

Purchases reached an almost three-year high 6.49 million pace in November 2009, the month the tax credit was originally due to expire. The incentive was subsequently extended.

Foreclosures may weigh on the inventory of unsold homes, discouraging construction and hurting prices. The number of homes receiving a foreclosure filing will climb about 20 percent in 2011, reaching a peak for the housing crisis, as unemployment remains high and banks resume seizures, RealtyTrac Inc. said this month.

KB Home, the Los Angeles-based builder that targets first- time homebuyers, last week reported an unexpected fourth-quarter profit after cutting costs and said its outlook is “cautious.”

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Toshiba Corp. is hoping to lure consumers to its new tablet computer by including a screen that is slightly larger than the iPad and offering a version of Google Inc.’s Android mobile operating software geared toward such devices.

Tentatively called the Toshiba Tablet, the device will include a touch screen that measures 10.1 inches diagonally _ compared with 9.7 inches on Apple Inc.’s iPad. Toshiba’s device will also have the forthcoming version of Android, called Honeycomb.

It will be more optimized for tablets than current, smart-phone-focused versions of Android, by letting applications adjust to take advantage of the tablet’s larger screen.

The Japanese computer and flat-screen TV maker is set to unveil the tablet at the annual International Consumer Electronics Show in Las Vegas this week. It won’t be the only one: A handful of tablets were released in 2010, but many more are expected to be shown off at CES and hit store shelves later this year.

Since Apple unveiled its iPad last January, consumers have been clamoring for the sleek computing device, and manufacturers have started churning out competing products in an effort to capitalize on the iPad’s popularity.

Toshiba’s Tablet won’t be the company’s first, nor its first Android tablet, but it will be the first time Toshiba is releasing such a product in the U.S.

Toshiba expects to roll out the tablet by the end of June. A price has not yet been set, but the company believes it will be competitive with the iPad, which costs $499 to $829, depending on its memory capacity and wireless capabilities.

Showing off a nonworking prototype of the tablet to The Associated Press in December, Phil Osako, Toshiba’s director of product marketing, said the device will be the first in a family of tablets the company plans to release. That device has a black, glossy face and rubberized back.

The Tablet’s screen will be able to show high-definition videos in 1080p resolution, the highest offered on current TVs, and it includes an HDMI port to connect it to a high-definition television. It will also play Flash videos _ something Samsung Electronics Co.’s Galaxy Tab can do as well, but the iPad cannot.

Although details of Honeycomb have not yet been announced by Google, Google’s mobile head, Andy Rubin, said at a December conference that Honeycomb will enable applications to have multiple views and present information differently depending on whether they’re running on a phone or a tablet faxless payday advance.

The Tablet will have an Nvidia Tegra 2 mobile processor and a 2-megapixel front-facing camera for video chatting and a 5-megapixel rear camera.

Osako said it will include Wi-Fi for getting online but won’t initially have the ability to access wireless carriers’ data networks, as the Galaxy Tab and the more expensive version of the iPad can. Toshiba may eventually work with carriers to add their wireless service to the device, he said.

The Tablet will have GPS and Bluetooth technologies and include a USB port, mini USB port and SD memory card slot.

Besides supporting Google’s Android Marketplace for downloading apps, the Tablet will include access to Toshiba’s own online market, Toshiba Places, for downloading content such as games, movies and music. It will have the Toshiba BookPlace e-reader and BookPlace marketplace for buying e-books.

Toshiba expects the tablet to be slightly more than half an inch thick and weigh less than 1.7 pounds. This would be a hair chubbier than the iPad, which is half an inch thick and weighs slightly less at 1.5 pounds or 1.6 pounds, depending on the model.

Osako said the company is looking to include a battery that provides seven hours of video playback. The iPad, by comparison, promises as much as 10 hours of Web surfing over Wi-Fi or video watching.

Over the past few years, Toshiba has been a player in the market for netbooks _ small, low-cost, portable laptops with less computing power than standard laptops _ and Osako doesn’t believe the Toshiba Tablet signals the demise of that category.

He said tablets are a quick, easy way to access entertainment content. But tablets have on-screen keyboards, and the regular keyboard on a netbook makes it better suited for more text-intensive things such as writing lots of e-mails and instant messages, he said.

“I think this is going to grow the market for mobile devices rather than taking away from it,” he said.

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