30-year mortgage drops to record 3.67%

WASHINGTON » Average U.S. rates on 30- and 15-year fixed mortgages this week fell to record lows for the sixth straight week. Cheap mortgages continue to help boost prospects for home sales this year.

Mortgage buyer Freddie Mac says the average rate on the 30-year loan dropped to 3.67 percent. That’s down sharply from 3.75 percent last week and the lowest since long-term mortgages began in the 1950s.

The 15-year mortgage, a popular refinancing option, declined to 2.94 percent, down from 2.97 percent last week.

Bernanke remains optimistic on economy

WASHINGTON » Slumping job growth has alarmed some economists who fear the U.S. economy is in trouble.

Ben Bernanke doesn’t appear to be one of them.

The Federal Reserve chief sketched a hopeful outlook in testimony to a congressional panel Thursday and sent no signals that the Fed will take further steps soon to aid the economy.

Bernanke acknowledged that Europe’s debt crisis poses risks to U.S. financial markets. He also noted that U.S. unemployment remains high at 8.2 percent. And he said the Fed is prepared to take steps to boost the U.S. economy if it weakens.

Spain’s banks at heart of eurozone chaos

MADRID » Spain is under increasing pressure to find a quick way to save its troubled banking sector from collapse.

Politicians and investors around Europe are worried that the economically battered country will not find the money to cover the toxic property loans weighing its banks down.

The expectation now is that Spain’s government will have no choice but to seek an international bailout to help bolster its lenders.

The concerns have sent Spain’s borrowing costs on the international bond markets to worrying levels — close to the points where most market-watchers say a country cannot maintain its debt.

Spain, previously rated A by credit-rating agencies, might need as much as 100 billion euros ($126 billion) to bolster its banking system, compared with an earlier estimate of about 30 billion euros, U.S. credit rating agency Fitch said Thursday. Fitch went on to downgrade the country to BBB, two notches above junk, and warned that Spain faced further downgrades. In its most recent debt auction Thursday, Spain managed to raise 2 billion euros ($2.52 billion) — but at much higher rates than in previous bond sales.

Fewer folks filing for jobless benefits

WASHINGTON » The number of people applying for unemployment benefits fell last week for the first time in five weeks. But the drop suggests only modest job growth after three months of weak hiring.

The Labor Department said Thursday that applications for weekly benefits dropped by 12,000 to a seasonally adjusted 377,000.

That’s down from an upwardly revised 389,000 the previous week.

The four-week average, a less volatile measure, rose by 1,750 to 377,500, the highest level in a month.

Stocks help lift U.S. household wealth

CHICAGO » A burst of stock gains and the first rise in home values in six years helped Americans regain more of their wealth in the January-March quarter.

But since then that effort has hit another bump. Stock prices sank in May on fears about Europe’s debt crisis and a weaker U.S. economy. That eroded the first quarter’s gains in wealth.

And there’s scant evidence of a sustained recovery in the housing market despite an uptick in home equity.

Consumers cut back on credit card use

WASHINGTON » U.S. consumer borrowing increased at a slower pace in April, restrained by a sharp reduction in credit card debt.

The report suggests Americans may be resisting their credit cards after seeing employers pull back on hiring this spring.

The Federal Reserve said Thursday that consumers increased borrowing by $6.5 billion in April. That’s just half the March gain.

Pfizer will divest animal health business

TRENTON, N.J. » Drugmaker Pfizer Inc. said Thursday that it’s taking the first steps to spin off its animal health business into a separate company, a long-anticipated move that’s part of an ongoing makeover to divest nonpharmaceutical businesses and boost returns to frustrated shareholders.

Pfizer said it is preparing to submit a regulatory filing for a possible initial public offering of a minority stake in the new company, to be called Zoetis. New York-based Pfizer said it will provide more details when it reports its second-quarter results, likely during the first week of August.

Pfizer said the spinoff should be complete by July 2013, a deadline it previously set.

ON THE MOVE

The International Brotherhood of Electrical Workers Local 1260 has announced its leadership team:

» Amy Ejercito as senior assistant business manager and general counsel for the local union.

» Michael Brittain as business representative as well as the union’s director of the strategic membership development.

» Russell Takemoto has been promoted to assistant business manager and strategic researcher.

» Russell Yamanoha as the union’s assistant business manager and director of communications.