Business Blog Posts

The Commerce Department said sales dropped 8.1 percent to a 283,000 unit annual rate after an upwardly revised 308,000 unit pace in September.

Analysts polled by Reuters had forecast new home sales rising to a 310,000 unit pace in October. Compared to October last year, sales were down 28.5 percent.

Housing remains one of the weak spots in the economy, which is showing some strength. With unemployment stuck at an uncomfortably high 9.6 percent, homeowners are struggling to hang on to their houses, keeping the foreclosure wave high and stifling the sector's recovery. Data on Tuesday showed a drop in the sales of previously owned homes last month.

October's weak sales pace pushed up the supply of new homes on the market to 8.6 months' worth from 7.9 months' worth in September. However, there were 202,000 new homes available for sale in October, the lowest since June 1968.

The median sale price for a new home dropped a record 13.9 percent last month from September to $194,900, the lowest since October 2003. Compared to October last year, the median price fell 9.4 percent, the largest drop since July 2009.

(Reporting by Lucia Mutikani; Editing by Neil Stempleman)

The Commerce Department said on Wednesday spending rose 0.4 percent after climbing by an upwardly revised 0.3 percent in September.

Economists had expected spending, which accounts for about 70 percent of U.S. economic activity, to increase 0.5 percent last month after a previously reported 0.2 percent gain in September.

The Federal Reserve's preferred measure of consumer inflation -- the personal consumption expenditures price index, excluding food and energy - was flat for a second straight month.

But in the 12 months through October, the core PCE index rose 0.9 percent, the smallest since records started in 1960 and well below the U.S. central bank's 1.7 percent to 2 percent comfort zone.

Though spending rose last month, it was still not robust. Concerns about low inflation and slow economic growth prompted the Fed this month to pump more money into the economy through additional purchases of $600 billion worth of government debt.

The asset purchasing program, also known as quantitative easing in financial markets, is intended to drive already ultra low interest rates further down and boost domestic demand.

Spending was lifted by a 0.5 percent rise in incomes after being flat in September. The rise incomes, which was flagged by October's employment report, was a touch above market expectations for a 0.4 percent gain.

Spending adjusted for inflation increased 0.3 percent after rising 0.2 percent in September. The sixth straight month of gains suggested consumers would continue to support the economy in the fourth quarter as the boost from inventory growth earlier in the year wanes.

Spending grew at a 2.8 percent annual pace in the third quarter, the fastest rate since the fourth quarter of 2006.

With real disposable income rebounding 0.3 percent, the saving rate edged up to 5.7 percent from 5.6 percent in September. Savings rose to an annual rate of $651.1 billion.

(Reporting by Lucia Mutikani; Editing by Neil Stempleman)

"Even though SAP may appeal the judgment, the huge amount should be negative for the stock price and, will weaken SAP's position in the U.S.," said Jacques Abramowicz, analyst at Silvia Quandt research.

"Oracle will use the decision as a marketing tool, wielding the moral cudgel every time new contracts are negotiated," he added.

SAP shares fell 1 percent to 35.83 euros by 1105 GMT (6:05 a.m. ET), one of the biggest losers in Germany's blue-chip index DAX, which was up 0.3 percent.

Commerzbank analyst Thomas Becker added: "The $1.3 billion is higher than we expected and marks an all-time high with respect to software patent infringement cases.

Based in the small town of Walldorf, near Heidelberg, SAP said it is considering appealing the decision, which was announced by a U.S. district court jury in Oakland, California on Tuesday.

"This judgment is a shock to SAP who had argued that the intellectual property theft (to) which it had admitted was worth only around $40 million," Abramowicz said and added that it is also 10 times more than SAP has set aside.

SAP has acknowledged that its TomorrowNow subsidiary in the U.S. had wrongfully downloaded millions of Oracle's files.

With the admission of liability, the issue before the jury was how much was owed in damages. SAP said no more than $40 million, while Oracle sought at least $1.65 billion.

"The decision is disappointing and we will now examine all options," a SAP spokesman said, adding that there will be no impact on the company's outlook.

"There may be some reputational damage to sales, and government agencies in the U.S. may be particularly sensitive to the trial's outcome," UBS analyst Michael Briest said.

NO APOTHEKER

Testimony in the trial wrapped up last week without a hoped-for appearance by former SAP chief and current Hewlett-Packard CEO Leo Apotheker.

During the trial, Oracle linked Apotheker to the operations of TomorrowNow. But it did not appear to produce evidence to prove he knew of the theft.

Oracle CEO Larry Ellison has publicly charged Apotheker with overseeing an "industrial espionage scheme" to steal Oracle software. But both SAP and HP characterized the Apotheker issue as a sideshow and said Oracle offered no proof to back up its allegations.

The three-week courtroom drama, which captivated Silicon Valley, featured testimony from such top executives as Oracle's Ellison -- whom SAP's lawyers accused of plucking damages numbers "out of the air" -- and President Safra Catz.

The artillery barrage on Tuesday, one of the most serious incidents on the divided peninsula since the end of the Korean war in 1953, boosted other safe haven assets, with gold holding most of Tuesday's gains and Japanese government bond futures gaining.

Korean bond futures rose and the won currency fell 2 percent. Market reactions to tensions with prickly North Korea tend to be short-lived, and data showed foreign investors were net buyers of South Korean stocks and bond futures.

"Korea trades at a discount to the region on a valuation basis ... If you look back at the last five years when we've had scares they were all seen as buying opportunities," said Todd Martin, Asia equity strategist with Societe Generale.

"The rule among hedge funds and long-only funds is that you let the market sell off and watch for your entry point to get involved."

The euro and global equities markets had already been under pressure as investors feared a rescue package for Ireland may not stop a debt crisis from spreading to other euro zone countries.

Tokyo's Nikkei .N225, which did not trade because of a holiday on Tuesday, fell 1.5 percent and the benchmark index in South Korea .KS11, where the trading day was ending when news of the North Korean attack broke, fell 1.2 percent.

MSCI's index of Asia Pacific shares outside Japan .MIAPJ0000PUS fell 0.4 percent. U.S. share markets had fallen on Tuesday, with the S&P 500 index .SPX dropping 1.4 percent.

The euro, which had tumbled 1.9 percent overnight, steadied a little to trade around $1.34. The dollar surged to 1,170 won from around 1,125 on Tuesday, and was later changing hands around 1,153.

Benchmark Japanese government bond futures rose 0.24 point and the 10-year yield edged down 1 basis point.

Spot gold edged down 0.2 percent to $1,372.95 an ounce, after touching a 1- week high of $1,382 in the previous session, and U.S. crude oil futures rose 15 cents to $81.40 a barrel.

(Editing by Kim Coghill)