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Business

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Briefs

Mortgage rates still climbing

Average U.S. rates on fixed mortgages rose for a third consecutive week as data showed a surprisingly strong pace of new-home sales last month. Rates still remain near historically low levels.

Mortgage buyer Freddie Mac said Thursday the average rate for the 30-year loan increased to 4.37 percent from 4.33 percent last week. The average for the 15-year mortgage rose to 3.39 percent from 3.35 percent.

A Commerce Department report Wednesday boosted expectations that the spring home-buying season will be solid enough to lift the overall economy.

Sales of new homes rebounded in January to the fastest rate in more than five years. The strength in purchases followed a slowdown that had been linked to higher mortgage rates and severe winter weather.

Yellen: Spending data, weather link unclear

Federal Reserve Chair Janet Yellen veered off script Thursday during remarks before the Senate Banking Committee – and that impromptu remark was the most important thing she said in eight hours (and counting) of congressional testimony this month.

Yellen began the biannual hearing with the same speech that she gave to the House Financial Services Committee two weeks ago. But when she got to the Fed’s outlook for the economy, she inserted this:

“Since my appearance before the House committee, a number of data releases have pointed to softer spending than many analysts had expected. Part of that softness may reflect adverse weather conditions, but at this point, it’s difficult to discern exactly how much,” she said.

“In the weeks and months ahead, my colleagues and I will be attentive to signals that indicate whether the recovery is progressing in line with our earlier expectations.”

Gap revises outlook after brutal quarter

Gap Inc.’s fourth-quarter profit dropped 12.5 percent as the retailer discounted heavily during the holiday shopping season.

The clothing chain, which operates Gap, Old Navy, Banana Republic and Athleta, also issued a profit outlook for this year that’s below analysts’ expectations.

The results issued Thursday come after Gap, like many retailers, finished a brutal holiday season marked by heavy discounting to help attract shoppers who’ve been cautious in a sluggish economy. Gap did its part by offering constant sales. Still, it’s faring better than rival Abercrombie & Fitch, whose fourth-quarter profit dropped 58 percent.

Best Buy exceeds 4th-quarter estimates

Best Buy Co., the world’s largest electronics chain, posted fourth-quarter profit Thursday that topped analysts’ estimates after it cut expenses and got more of its sales from the Internet.

Profit was $293 million, or 83 cents a share, in the quarter ended Feb. 1, compared with a loss of $409 million, or $1.21 a share, a year earlier, the Richfield, Minn.-based company said. Earnings from continuing operations were $1.24 a share. Analysts had projected $1.01 a share, the average of 24 estimates compiled by Bloomberg.

CEO Hubert Joly is working to cut $1 billion in annual costs, up from an earlier target of $725 million, by improving the company’s supply chain and reducing the number of products that get returned or damaged.

Domestic online sales jumped 26 percent last quarter, helping offset declines at brick-and-mortar stores.

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