Among U.S. homeowners with mortgages, 7.91 percent were at least 30 days late on payments in November, up from 7.76 percent in October, according to the monthly data the credit bureau provided exclusively to Reuters on Wednesday.

Delinquencies are an indication of future consumer bankruptcy filings, according to Equifax.

“(Consumers) spend a lot more during November and December and they get behind and can’t get to their payments,” said Myra Hart, senior vice president of Analytical Services at Equifax.

No real improvement is possible until unemployment levels come down, she said in an interview.

“We are about at the peak in terms of delinquencies,” Hart said. “Things probably won’t improve dramatically until jobs begin to be added. Delinquencies will stay at this level and may improve by small levels but we won’t see any real improvement till 2011.”

Delinquencies are worse than in previous years. Equifax data showed that 5.83 percent of mortgages were at least 30 days past due in November 2008, and 3.93 percent were past due in November 2007.

The numbers indicate that though the U.S. economy shows signs of improvement after the worst recession since the 1930s, Americans’ troubles are far from over.

In November, 42.06 percent of subprime mortgages were delinquent compared with 41.36 percent a month ago and 39.25 percent in June.

Still, Americans seem to be paying more attention to their bills.

Among credit card accounts, 4.62 percent were at least 60 days past due in November, up just 0.04 percent from a month ago and below the May 2009 peak of 4.79 percent, according to the data.

That shows that despite record-high unemployment, more people are attempting to pay off their monthly charges as they shop carefully for the holidays, buying only necessary items, or waiting for discounts on big-ticket items.

Data from the National Retail Federation showed that consumers’ holiday shopping so far is at a five-year low.

Also, card issuers have drastically reduced lines of credit to $803 billion and the number of accounts to 93 million, Equifax data show. Both numbers peaked in July 2008.

U.S. consumer outstanding consumer debt has dropped 5 percent or $575 billion from a year ago, data showed, as more Americans paid down debt where they could or got rid of debt through write-downs.

But whether consumers will remain frugal once the economy gains steam is a question.

“For some consumers there’s been a pretty big shock here,” Hart said. But, she added, “the shock is wearing off.”

(Reporting by Aarthi Sivaraman; Editing by Richard Chang)

The housing market slump, “we now believe, ended approximately in March 2009,” Toll said in a conference call, following its preliminary fourth quarter results a day earlier. “Basically, we think we’re working our way out of it. It will come in fits and starts.”

Toll Brothers said late Tuesday it expected fourth-quarter revenue to drop 30 percent, but that was still higher than Wall Street’s expectations, and its shares rose nearly 6 percent after markets closed.

The largest U.S. builder of luxury homes and apartments also said fourth-quarter net contracts rose 42 percent to 765 units, or 62 percent to $430.8 million — yet another positive sign for the housing market, which has been showing signs of improvement.

Other homebuilders also rose after Toll Brothers’ results. Lennar Corp <LEN.N> rose 6.4 percent, Pulte Homes Inc <PHM.N> was up 9 percent, KB Home <KBH.N> rose 6.3 percent and DR Horton Inc <DHI.N> was up 6 percent.

The summer months in the Unites States saw the housing market, including both resale and new homes, get a boost from a $8,000 federal tax credit for first-time home buyers.

The extension of home buyer tax credit and broader eligibility should help attract hesitant consumers, Toll Brothers said.

But potential home buyers were still worried about unemployment and the economy, a likely reason for volatile trends since Labor Day, Toll said in the call.

The company’s shares rose $3.02 or 16.4 percent, to end the day’s trade on the New York Stock Exchange at $21.42.

(Reporting by Aarthi Sivaraman, editing by Leslie Gevirtz)

Buffett’s move was a “positive statement … on what he
thinks about rails, and in particular, what he thinks about
western rails,” and underscored that “there is a great amount
of upside opportunity in the rails,” company executives said
during a Goldman Sachs conference on Wednesday, which was
monitored via a Webcast.

Though Union Pacific does some business with a few
Berkshire-owned companies, the deal would have “no material
impact either way” on Union Pacific, they said.

Buffett’s deal to buy BNSF — the billionaire investor’s
biggest acquisition — was unveiled a day earlier. The news has
refreshed interest in the sector, and some analysts said it
could bring fresh money into it. [ID:nN03483590]

Berkshire held a 1.9 percent stake in Union Pacific,
according to Thomson Reuters data. The small size of the
holding was not expected to attract regulatory scrutiny and
Buffett has said he was not interested in buying Union
Pacific.

Union Pacific struck a deal with logistics company Pacer
International Inc <PACR.O> a day earlier, transferring
wholesale intermodal business to the railroad, and resolving
arbitration claims.

Union Pacific Chief Financial Officer Rob Knight said he
was “pleased” with the deal.

The company, which expects 2009 core pricing to increase at
about 5 percent over last year, expects “another year of solid
pricing gains” in 2010, Knight said.

Union Pacific shares closed down 26 cents at $59.15 while
BNSF shares closed up 0.1 percent to $97.10 on the New York
Stock Exchange.
(Reporting by Aarthi Sivaraman; Editing by Leslie Gevirtz,
Gary Hill)

Forty-eight percent of U.S.-based industrial manufacturers surveyed by PricewaterhouseCoopers in the third quarter said they were optimistic about the U.S. economy over the next year, while only 43 percent had said so in the second quarter.

The largest number of manufacturers polled — 45 percent — did not expect their businesses to regain strength until the second half of 2010, the survey showed.

Twenty-three percent said they expected business to pick up in the first half of 2010 but 17 percent believed their companies were unlikely to recover until 2011.

U.S. manufacturers have varied in their individual outlooks. Companies such as Honeywell International Inc <HON.N> and Ingersoll-Rand Plc <IR.N> have said they expect better conditions in 2010 after a year of sharp declines in earnings and sales.

Caterpillar Inc <CAT.N> forecast strong 2010 revenue growth, but United Technologies Corp <UTX.N> was uncertain about how its revenues would turn out.

In the survey, 57 percent expected positive revenue growth in the next year. That is an improvement from the prior quarter’s 43 percent, according to the survey.

Seventy-five percent said they were concerned about a lack of demand, down from 82 percent in the previous quarter, while 42 percent were worried about decreasing profitability — though that was 8 points down.

The small improvement in optimism extended to companies’ hiring and capital investment plans.

Of those surveyed, 25 percent said they plan to hire employees over the next 12 months — an improvement of 8 percentage points from the prior quarter. Technicians, white collar workers and sales and marketing professionals would be among the top hiring categories, according to the survey.

Though 28 percent planned to cut the number of full-time staff, that number declined from the 30 percent who said so three months ago.

Thirty-seven percent plan major new capital investments in the next year, compared with 27 percent last quarter.

PwC polled senior executives at 60 industrial manufacturers from mid-July to mid-October.

(Reporting by Aarthi Sivaraman; Editing by Gary Hill and Tim Dobbyn)

In question is a reauthorization bill for the Federal Aviation Administration passed in May by the U.S. House of Representatives, under which FedEx employees would be covered by the National Labor Relations Act instead of the Railway Labor Act. The bill is awaiting Senate approval.

“It is legislation written by UPS, for UPS and only benefits UPS,” said FedEx spokesman Maury Lane. “Everyone else suffers.”

The event, held at the Greater Albuquerque Chamber of Commerce, was the first time representatives from both companies talked face to face about the issue.

FedEx has maintained that as an airline, its staff should continue to be covered by the Railway Labor Act, which governs airlines and railroads. FedEx began as an express delivery airline about 36 years ago, before adding trucks.

FedEx has said switching its governing agency amounts to a bailout for UPS and would strip FedEx of its competitive edge.

FedEx has taken issue with a provision in the bill that would make it easier for its employees to unionize locally instead of having a nationwide vote.

UPS, meanwhile, argues that FedEx employees should be governed by the same law that most of its staff fall under — the NLRA’s — since FedEx also runs a ground delivery service much like UPS’s.

“The fact of the matter is packages are not delivered by airplanes, they are delivered by drivers and vehicles,” said UPS spokesman Malcolm Berkeley, after the debate.

“What is it about their express drivers that is so special that they should be under a different law than every other driver in the country?”

While UPS drivers are represented by the Teamsters, FedEx drivers do not have union representation.

“It’s time to level the playing field in the package delivery industry,” Ken Hall, the Teamsters’ vice president and Package Division director, said in an emailed statement.

“No one company should get a special deal at the expense of U.S. taxpayers,” Hall said.

FedEx launched an Internet campaign at www.brownbailout.com in June tied to the bill.

(Reporting by Aarthi Sivaraman; Editing by Gary Hill)

Apollo, parent of the University of Phoenix, said on
Tuesday that it intends to cooperate with the U.S. Securities
and Exchange Commission’s inquiry, but did not give further
details. The scope, duration or outcome of the inquiry could
not be determined, Apollo said.

A spokeswoman for Apollo, Sara Jones, said the information
in the statement was all it had at the moment.

Apollo executives said in a conference call that the
company became aware of the inquiry last week, but Tuesday
seemed “the appropriate time” to reveal it since it reported
quarterly results and filed its annual report with the SEC.

Other education stocks like Corinthian Colleges Inc
<COCO.O> and Career Education Corp <CECO.O> also fell after
Apollo’s announcement.

“What is very disconcerting is that the SEC targeted Apollo
which is a large, publicly-traded, for profit institution,”
said Wedbush Morgan Securities analyst Ariel Sokol.

The inquiry could point to more than possible issues at
Apollo itself, Signal Hill analyst Trace Urdan suggested.

“It is either something related to Apollo and we just don’t
know what it is, or it is related to the industry, about how it
recognizes revenue related to student attendance, and they just
picked on Apollo because it is the biggest player in the space,
Urdan said.

NOT THE FIRST TIME

Apollo, which was founded in 1973, counts adults for half
of its students, 80 percent of whom work full-time. But this is
not the first time it has run into accounting troubles.

In 1999, the U.S. Department of Education completed a
year-long review of its accounting methods for student
enrollments, withdrawals and tuition payments. As a result of
the review, Apollo was required to pay the U.S. Department of
Education and other lenders about $650,000.

Also, the company’s former chief financial officer resigned
in 2007 after an investigation found errors in the way it was
accounting for stock option grants.

The for-profit education industry has faced a variety of
government probes and investigations over its accounting. The
SEC looked into allegations related to accounting, student
populations and placement data at Career Education last year,
but without taking action against it.

Minutes after Apollo’s news, rival DeVry Inc <DV.N>, which
also reported its quarterly results, said in a conference call
that DeVry had never had any issues with revenue recognition.

Revenue recognition errors are the second most frequently
cited reason for financial restatements, according to the
Government Accountability Office, behind cost or expense
related issues.

From July 2002 through September 2005, revenue recognition
issues accounted for 20 percent of all the restatements. Before
2002, revenue recognition errors accounted for almost 40
percent of restatements.

OVERSHADOWS QUARTERLY RESULTS

Apollo’s announcement about the inquiry overshadowed its
quarterly results. Though it posted a drop in fourth-quarter
profit, it topped Wall Street’s expectations.

Its net income fell to $91.5 million or 59 cents per share,
from $229.6 million or $1.43 per share a year earlier.

Excluding certain items, its earnings of $1.06 per share
were above the average analyst expectation for $1.04 per share,
according to Thomson Reuters I/B/E/S.

Revenue rose to about $1.08 billion from $831.4 million a
year ago, the company said.

Apollo said it expects British education company BPP
Holdings, which it acquired earlier this year, to be slightly
dilutive to 2010 earnings.

Its shares, which closed at $72.97 on the Nasdaq, fell
about 20.5 percent after markets closed. Corinthian Colleges
shares fell 6.5 percent in after-hours trade.
(Reporting by Aarthi Sivaraman; additional reporting by Emily
Chasan in New York; Editing by Bernard Orr and Carol
Bishopric)

Last year, Saks stunned consumers with drastic holiday discounts, up to 70 percent off at times, as it struggled to sell its luxury merchandise to frugal shoppers in the recession.

But the upscale retailer, which sells designer labels like Valentino, Ralph Lauren and Marc Jacobs, has slashed its inventory by 20 percent in 2009. That puts markedly less pressure on it to discount merchandise in order to clear store shelves.

So, if consumers are waiting for last year’s low prices in coming weeks, they are likely in for disappointment, Saks Chief Executive Steve Sadove said in an interview.

“You are just not going to see what you saw last fall,” Sadove said.

“It’s just the math. You see the inventory levels, there is just that much less product around. If they decide they want to gamble and wait to see whether it’s there, they are playing roulette as to whether or not the product will be there.”

That could mean anything from running out of specific sizes to the entire product line.

“That’s what luxury retailing is about. It is about limited distribution (and) limited availability,” Sadove said.

Having excess inventory was one of U.S. retailers’ biggest headaches in the 2008 holiday season — the worst in nearly 40 years as shoppers slashed spending and hunted for discounts in the recession.

While 2009 U.S. holiday sales are expected to decline 1 percent, that is less than last year’s drop of 3.4 percent, according to the National Retail Federation.

For the second half of 2009, Saks has said it expects a mid- to high-single-digit decline in sales at stores open a least a year. But Sadove said the aim is for the decline to be smaller in the fourth quarter, which includes the holidays.

Saks is not taking any chances as it works toward that goal. Store associates are already giving customers a heads-up about limited supply, Sadove said.

“They are already saying, ‘Hey, you can wait it out but there is just not as much around,’” Sadove said.

Saks has taken other steps like putting lower-priced items in stores to woo luxury shoppers who still want to own designer labels, but are not ready to fork over too much money.

“Your average price of a pair of shoes is coming down within the brands … within a Prada, within a Gucci,” Sadove said.

Saks shares were down 5 cents to $6.15 on the New York Stock Exchange.

(Editing by Gary Hill)

The relatively modest version of the Neiman catalog is the
latest sign that the world’s most extravagant shoppers may not
have as much cash to burn on gifts.

“That catalog is the equivalent of having their own temple
of luxury — something that is above and beyond,” said Milton
Pedraza, chief executive of the Luxury Institute, a research
firm. “That extreme level now has been brought down to earth.”

A year ago, Neiman Marcus proffered a $1 million
custom-designed golf course and $10 million horse farm within
weeks of a global financial markets collapse. No takers
emerged, but a $275,000 collection of vinyl records of top rock
and pop music hits did find a home.

Past offerings from Neiman have also included a $20 million
submarine, mummy cases containing an actual mummy, and a
mermaid suit that could be used while swimming.

“So many wealthy people were living above their means,”
said Pedraza. “The economy reset their value and they’ve had to
reset their minds.”

The 2008 holiday season was one of the worst in decades.
U.S. holiday sales in 2009 are expected to fall 1 percent
according to the National Retail Federation, as consumers
continue to shun unnecessary items, and focus on necessities.
[ID:nN05375558]

Even holiday “hot toys” are skewed toward price tags under
$100, in line with consumers’ frugality. [ID:nN30235456]

The message is not lost on Neiman Marcus, though its gifts
have not lost their outlandish flavor.

More than 40 percent of the retailer’s roughly 400 holiday
items are under $250, the company said in a statement. Its most
expensive offering is the $250,000 Icon A5 sports plane.

For car lovers, there is a $105,000 limited edition Jaguar.
And the $73,000 Mission One electric motorcycle — called the
world’s fastest electric sports bike — is sure to call out for
those with a need for speed.

In contrast, the cupcake car designed by artist Lisa
Pongrace travels at a top speed of 7 miles per hour.

If you relish intellectual delights, Neiman will arrange a
private dinner party with some of the world’s sharpest minds.
The $200,000 round table event at New York City’s Algonquin
Hotel includes dinner and conversation with people like Henry
Louis Gates Jr., Christopher Buckley and George
Stephanopoulos.

The catalog, which began as a Christmas card for shoppers
in 1915 and became more regular from 1926, showcases the latest
in high fashion, shoes and luxury items from jewelry to
wallets.

Perhaps this year’s standout — the $8,500 artwork whose
focal point is a preserved African Flower Beetle signed by
artist Mike Libby.

(Reporting by Aarthi Sivaraman; Editing by Michele
Gershberg and Richard Chang)