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Sales of new homes dropped to a record low last month, dimming prospects for a swift recovery for the housing market.

Overall, sales were down 2.2 percent, to a seasonally adjusted annual rate of 308,000, the Commerce Department said Wednesday. Economists had forecast a 1.9 percent rise.

Those numbers followed a similarly bleak report on Tuesday that showed sales of existing homes dropped last month, despite a generous government tax credit meant to lure buyers.

Taken together, the data resurrected concerns that the market could fall into another downturn, with new downward pressure on prices as the supply of houses increases but demand dwindles.

"It was dismal no matter how one tries to slice and dice it," Joshua Shapiro, an economist for MFR Inc cash advance no faxing. wrote.

Sales of new homes have fallen 23 percent since October. Sales rose at a rapid pace last fall as buyers rushed to take advantage of an $8,000 tax credit before its original expiration date. The credit has since been extended to April 30, but there has been no evidence of a buying frenzy.

The drop in February was partly the result of stronger results the previous month: the government said sales reached a rate of 315,000 units in January, better than the 309,000 rate originally forecast. Economists said a series of snowstorms in February may also have contributed to the decline.

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Adobe Systems Inc. is expected to post a drop in first quarter earnings to 37 cents a share from 45 cents last year, but that didn't deter at least one analyst from expecting "solid" financials on Tuesday.

Deutsche Bank analyst Tom Ernst Jr. kept his buy rating on San Jose-based Adobe (NASDAQ:ADBE), saying he expects to see 39 cents a share on $835 million in revenue.

The consensus number from analysts is for $827.4 million in revenue, compared to $786.4 million last year.

Ernst said he expects Adobe to benefit from an improving economy and in coming quarters should see a bump from the release of Creative Suite 5, the new version of the company's flagship software no teletrack payday loans.

Ernst raised his price target on Adobe shares to $46 from $44. Its shares dropped about 3 percent on Friday to $34.67, a few dollars below its 52-week high of $38.20.

Investors are watching to see how Adobe's acquisition of Web analytics company Omniture in October plays out, but Ernst said in his note to investors that he believes the launch of CS5 will return Adobe shares "to more typical premium levels".

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Google Inc. said in court documents unsealed on Thursday that Viacom Inc. was secretly uploading videos to YouTube at the same time it was complaining about copyright infringement.

Google (NASDAQ:GOOG) also said that Viacom tried to buy YouTube in 2006 before the search giant agreed to pay $1.65 billion for the popular video Web site.

The documents are part of the $1 billion copyright infringement suit brought by Viacom against Google in March 2007.

In a blog post on Thursday, YouTube Chief Counsel Zahavah Levine wrote, "For years, Viacom continuously and secretly uploaded its content to YouTube, even while publicly complaining about its presence there. It hired no fewer than 18 different marketing agencies to upload its content to the site. It deliberately 'roughed up' the videos to make them look stolen or leaked. It opened YouTube accounts using phony email addresses. It even sent employees to Kinko's to upload clips from computers that couldn't be traced to Viacom guaranteed high risk personal loans."

Google's charges of hypocrisy were matched by similar claims by Viacom.

Viacom said Google executives knew did little to curb illegal downloading on YouTube even though they were aware of the extent of illegally uploaded videos to the site.

"Google and YouTube were not just innocent and unwitting accomplices to infringement perpetrated by YouTube users," Viacom said in the court documents.

The claims were part of hundreds of pages of documents filed in the case, many of which have now been posted online. Here are some of the links:

Statement of undisputed facts.

YouTube summary judgment motion.

Viacom summary judgment motion.

YouTube Chief Counsel Zahavah Levine has also issued the following statement.

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Gasoline prices are continuing an upward trek, with the Florida average for a gallon of self-serve regular up 4 cents at $2.84 and Orlando-area prices up 5 cents at $2.78.

The nationwide average, meanwhile, is $2.78, up 4 cents from a week ago.

“Consumers in the Southeast are beginning to worry that retail gas prices will rise to $3 a gallon in the next week or two,” said Jessica Brady, manager of public and government relations for AAA Auto Club South.

However, Brady said, consumers are not fully confident that the economy and job market will soon improve, leading analyists to believe that fuel demand will be slow to rise.

“This makes it very likely the price of crude oil will further decline this week prolonging statewide increases and averages to $3 a gallon.”

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After a nearly 30 percent drop in January, foreclosures were back on the rise in Alabama last month.

RealtyTrac, a national tracker of foreclosures, said 2,291 properties were reported to be in some form of foreclosure in the state in February, or one foreclosure for every 942 households.

That’s a more than 27 percent increase over January and a more than 221 percent increase over the same month a year ago, said a news release.

Nationally, foreclosures decreased by more than 2 percent over the previous month, but increased more than 6 percent over February 2009, the smallest year-over-year increase since 2006.

“This leveling of the foreclosure trend is not necessarily evidence that fewer homeowners are in distress and at risk for foreclosure, but rather that foreclosure prevention programs, legislation and other processing delays are in effect capping monthly foreclosure activity – albeit at a historically high level that will likely continue for an extended period,” said James J free online credit report. Saccacio, CEO at RealtyTrac.

RealtyTrac said more than 60 percent of the national total of properties in some form of foreclosure were in six states – California, Florida, Michigan, Illinois, Arizona and Texas.

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Japan posted a current-account surplus in January as exports climbed for a second month, an indication overseas demand is sustaining the nation’s recovery.

The gap was 899.8 billion yen ($9.9 billion) from a year earlier, when it was deficit, the Ministry of Finance said in Tokyo today. The median estimate of 26 economists surveyed by Bloomberg News was for a 783.9 billion yen surplus.

The report highlights the role overseas shipments have continued to play in propping up the world’s second-largest economy. Further export gains in coming months will prompt businesses to boost spending on plant and equipment, helping support the rebound, according to economist Naoki Iizuka.

“Right now the economy is being pulled by exports and inventory adjustments,” Iizuka, a senior economist at Mizuho Securities Co. in Tokyo, said before the report was released. “Once we enter the second quarter, manufacturers’ capital spending will be a new contributor to the economy’s growth.”

Today’s data adds to signs of sustained expansion in the first quarter. Factory production rose at the fastest pace since May and the unemployment rate fell to a 10-month low in January. The Finance Ministry said last week capital spending also fell 18.5 percent in the three months ended Dec. 31. While that was the 11th straight decline, it was also the smallest drop in a year.

Shipments to China rose at the fastest pace since 1985 in January, while exports to the U.S. advanced for the first time in more than two years, customs-cleared trade data showed last month. Today’s figures don’t include regional breakdowns.

Favorable Comparison

The export rebound has been driven in part by favorable year-on-year comparisons. Shipments had plunged last year in the wake of a global credit crunch caused by the collapse of Lehman Brothers Holdings Inc. Japan posted its first current-account deficit in 13 years in January 2009 as a result.

Overseas shipments of Nissan Motor Co. cars rose 29.6 percent in January, while Mitsubishi Motor Corp. shipped more than double the amount of vehicles compared with the same month a year ago, according to the Japan Automobile Manufacturers Association.

The Cabinet Office will say the economy expanded at a revised 4 percent annualized pace last quarter, according to the median estimate of 27 economists surveyed by Bloomberg News. Preliminary figures showed 4.6 percent growth. The report is due on March 11 at 8:50 a.m. in Tokyo.

The current account tracks the flow of goods, services and investment income between Japan and its trading partners. It includes trade not shown in the customs-cleared balance.

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Europe’s recovery almost came to a halt in the fourth quarter of 2009 as companies continued to cut investment while consumers held back spending, countering a gain in exports.

Corporate investment dropped 0.8 percent from the third quarter, when it fell 0.9 percent, while household spending was flat, the European Union’s statistics office in Luxembourg said today. Exports gained 1.7 percent and imports rose 0.9 percent. Gross domestic product rose 0.1 percent from the third quarter, when it increased 0.4 percent.

European governments are struggling to contain the fallout from Greece’s budget crisis as they phase out the stimulus measures used to pull the economy out of a recession. Economic confidence in the region fell last month and unemployment held at an 11-year high in January. Still, the EU forecasts growth will accelerate in the first quarter.

“Today’s figures clearly demonstrate that the euro-region recovery is still very much made abroad and that private domestic demand has yet to recover,” said Martin Van Vliet, an economist at ING Group in Amsterdam. “We suspect that first- quarter growth might only be slightly better than the fourth quarter’s meager performance.”

The euro pared declines against the dollar after the data, trading at $1.3681 at 12:33 p.m. in London, down 0.1 percent on the day. The yield on the German 10-year benchmark bond rose 0.1 basis point to 3.14 percent.

Government Spending

From a year earlier, euro-area GDP declined a seasonally adjusted 2.1 percent in the fourth quarter, the statistics office said today, confirming an initial estimate from Feb. 12. Government spending fell 0.1 percent from the third quarter, when it increased 0.8 percent, today’s report showed.

For the full year, GDP shrank 4.1 percent, compared with an earlier estimate of 4 percent. That compares with contractions of 2.4 percent in the U.S. and 5 percent in Japan last year, the statistics office said.

The German economy, Europe’s largest, stagnated in the fourth quarter after recording 0.7 percent growth in the previous three months, while Italian GDP fell 0.2 percent. France’s economic expansion accelerated to 0.6 percent from 0.2 percent. In Greece, the economy contracted 0.8 percent in the fourth quarter.

European companies are relying on exports to bolster sales as households in the region cut back spending. Consumer and executive confidence in the outlook worsened in February after unemployment held at 9.9 percent in January, the highest since November 1998.

European Environment

Carrefour SA Chief Executive Officer Lars Olofsson said on Feb. 19 that he doesn’t “see any change in the European environment for the next six months at least” after Europe’s largest retailer reported a 70 percent drop in 2009 profit free credit score.

The European Central Bank will probably keep its benchmark interest rate at 1 percent today, according to a Bloomberg survey. The ECB, which has started to phase out some of its stimulus measures introduced to fight the recession, will release its decision at 1:45 p.m. in Frankfurt.

“The phasing out of some unconventional measures should not be misinterpreted as a desire to remove policy accommodation,” ECB council member Athanasios Orphanides said in an interview on Feb. 12. “Policy accommodation continues to be needed in light of the very subdued inflation outlook and the unevenness and weakness of the economy.”

EU Forecasts

While euro-region GDP is seen rising 0.2 percent in the current quarter from the previous three months, the economy may fail to gather strength for most of 2010, according to EU forecasts on Feb. 25. In the year, the economy will probably expand 0.7 percent after shrinking 4 percent in 2009, the EU projects.

Europe’s governments face a growing dilemma as they seek to bolster recoveries at a time when rising sovereign-debt burdens threaten to hobble economic expansion. The euro has declined 8.1 percent against the dollar over the past three months amid concern Greece’s budget crisis will spread to other countries.

Greek Prime Minister George Papandreou’s government yesterday approved an additional 4.8 billion euros ($6.6 billion) in deficit cuts after EU officials said the nation’s financial woes pose a threat to the entire region. The country, which has pledged to lower the budget gap beneath the EU limit of 3 percent of GDP by 2012, today started a sale of 10-year bonds amid street protests in Athens against the cuts.

‘Slow and Patchy’

“The recovery in the euro-area economy as a whole in 2010 will be slow and patchy,” said Colin Ellis, an economist at Daiwa Securities in London. “It is hard to see a strong engine of domestic growth in the euro-area economy, consistent with our view that exports may have to do the heavy lifting.”

While the euro’s slide against the dollar is boosting some raw-materials costs for companies, it’s also improving the competitiveness of European exports just as the global economy gathers strength. Europe’s service and manufacturing industries expanded for a seventh month in February.

Volkswagen AG, Europe’s largest carmaker, is facing a “strong headwind” in Europe and a “tailwind” in the U.S. and China, CEO Martin Winterkorn said on March 1. BASF SE, the world’s biggest chemical company, last month forecast higher earnings this year.

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President Barack Obama needs to grasp Southeast Asia’s economic potential and help boost U.S. investment when he travels to Indonesia three weeks from now, economic ministers from the region said.

“There’s still a lack of awareness in the U.S., a misperception that we have to address,” Indonesian Trade Minister Mari Pangestu said in an interview in Putrajaya, Malaysia, where envoys from the Association of Southeast Asian Nations met at the weekend. “We have to keep up the momentum” to expand cooperation, she said.

Asean ministers plan to travel to the U.S. in May to meet with business executives. The association plans to showcase its position as an economic hub in competing for funds with China and India, the world’s fastest-growing economies.

Obama, who became the first U.S. leader to meet with the 10-member bloc in November, is aiming to increase trade with Asia to help meet a January pledge to double exports in five years. Southeast Asia was the third-biggest market for U.S. goods in 2008 behind Canada and Mexico.

The region is rich in coal, oil and precious metals as well as containing sea lanes vital to world trade. Asean aims to form an economic community modeled on the European Union, though without a common currency, by 2015. It has already signed free- trade accords with China, Japan, South Korea, Australia and New Zealand.

Economic Recovery

“It’s important that Mr. Obama look more to the East,” Thai Deputy Commerce Minister Alongkorn Ponlaboot said in an interview. “There has been a power shift toward this region after the financial crisis, and I hope Obama will have a clear message for Asean when he visits.”

Asia’s export-dependent economies are emerging from recession as global demand increases for the region’s computer chips, cars and commodities. In January, Detroit-based General Motors Co. received local funding to open a diesel-engine plant in Thailand, and Santa Clara, California-based Intel Corp. plans to start operations of a chip assembly and testing plant in Vietnam later this year.

Asean leaders will aim to make the U.S. “understand why we have been able to succeed and why we will continue to undertake the policies that would ensure that this economic recovery is not just a coincidence,” Pangestu said. “We’ve actually moved further than you think and the opportunity is there.”

Investment Programs

Foreign direct investment from the U.S. into Asean from 2006 to 2008 amounted to $12.8 billion, or 6.9 percent of the bloc’s total, down from 17 percent from 1995 to 2001. The EU invested $42.1 billion into Asean from 2006 to 2008 while Japan put down $28.7 billion, statistics show.

Economic disparity among Asean members has hindered the region’s ability to leverage its market of 584 million people guaranteed online payday loans.

The region’s four largest economies — Singapore, Thailand, Malaysia and Indonesia — account for almost 80 percent of all foreign investment into Asean. The Philippines, Brunei, Cambodia, Laos, Myanmar and Vietnam are the other members of the 10-nation group.

“There is a lot of unutilized potential” for joint investments between Southeast Asian countries, Mustapa Mohamed, Malaysia’s minister of international trade and industry, said in an interview. “We are underperforming in intra-Asean trade, so that’s a priority this year.”

Trade Initiative

Southeast Asian countries are split on Obama’s top trade initiative, the Trans-Pacific Partnership, which he aims to turn into a platform for economic integration in the Asia-Pacific region. Vietnam, Singapore and Brunei will join New Zealand, Chile, Peru, Australia and the U.S. for talks on the TPP later this year.

“The success of the TPP depends very much on the attitude and the viewpoint of the U.S.,” Vu Huy Hoang, Vietnam’s minister of industry and trade, told reporters.

Malaysia and Indonesia are both reviewing the TPP and haven’t decided whether to join talks. Thailand prefers a free- trade deal between the U.S. and Asean as a bloc, Alongkorn said.

“We have noted that investments from the U.S. have dropped,” Surin Pitsuwan, Asean’s secretary-general, told reporters yesterday after the meeting, which ran from Feb. 27 until today. “There is very keen interest in strengthening cooperation, but because of the differences and diversity among us we have not yet made a definite decision whether or not this is going to be a free-trade agreement.”

China Trade

Indonesia notified its partners in Asean earlier this year that it wants to revise the group’s free-trade agreement with China, which took force on Jan. 1 and scraps tariffs on about 90 percent of goods.

Textiles, food and electronics companies have said they will suffer from the inflow of cheaper Chinese goods.

China’s trade with Asean has jumped sixfold since 2000 to $193 billion in 2008. The country’s share of Southeast Asia’s total commerce increased to 11.3 percent from 4 percent in that time, whereas the U.S. portion fell to 10.6 percent from 15 percent, Asean statistics show.

“We don’t worry so much about having to compete with the U.S. in the way some sectors worry about having to compete with China,” Indonesia’s Pangestu said. “From the Asean-U.S. perspective of increasing trade and investment, it’s more like, ‘Hey guys, the U.S. is back.’”

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