Mortgage rates tumble to lowest level on record

Mortgage rates fell to the lowest level in the history of Freddie Mac’s weekly survey, with 30-year fixed-rate home loans being offered this week at an average of 4.15 percent, down from 4.32 percent last week.

The mortgage giant said in its weekly report Thursday that loans with variable interest rates also hit record lows, as did shorter-term fixed-rate loans. The 15-year fixed-rate loan, a popular choice with people refinancing their homes, was being offered at an average rate of 3.36 percent, down from 3.50 percent last week.

The rates, available to the lucky folks who have weathered the recession and housing debacle in solid financial shape, are the lowest since Freddie Mac’s survey began in 1971.

Gap’s profit falls 19 percent as production costs climb

Deep discounting and escalating production costs pushed Gap Inc.’s second-quarter profit down 19 percent, raising concern about how it will fare for the critical fall and holiday shopping seasons.

Gap, which operates stores under its namesake, Old Navy and Banana Republic, also reiterated its full-year profit forecast that was slashed in May as the nation’s largest clothing chain was struck with faster-than-expected increases in costs to make its clothing.

Gap said Thursday it earned $189 million, or 35 cents per share, in the three months ended July 30. That compares with $234 million, or 36 cents per share, a year ago.

Revenue rose 2 percent to $3.38 billion. The chain’s revenue at stores opened at least a year fell 2 percent during the quarter.

AIG pays back $2.15 billion to federal bailout program

American International Group Inc. paid the federal government $2.15 billion this week after selling off a life insurance subsidiary, trimming its financial bailout balance to roughly $51 billion.

The Treasury Department said Thursday that the repayment comes from AIG’s sale of its Nan Shan Life Insurance Co. in Taiwan. AIG has now paid back $11.4 billion of the $68 billion it received from the government at the height of the 2008 financial crisis.

The government sold 200 million AIG shares in May. That cut the government’s stake in the company from 92 percent to 77 percent. Treasury officials have said they expect to recoup the full amount of the bailout.

Latest dose of uncertainty drives gold to new record

The price of gold hit its latest record high, near $1,830 an ounce, as investors spooked by the prospect of a return to recession sought out safety Thursday in the precious metal.

Gold prices have more than doubled since the Great Recession began in late 2007. They’ve risen about 19 percent since the beginning of June, as European leaders struggled to keep the debt crisis from infecting the region’s major economies and U.S. politicians nearly drove the country to the brink of default.

While gold has hit a series of record highs over the past two months, the Standard & Poor’s 500 has dropped about 15 percent. The dollar, a traditional safe haven during periods of market turbulence and fear, is flat against a group of six major currencies.

Oil prices drop below $83 on concerns about demand

Oil fell sharply Thursday along with a broad sell-off in stocks triggered by worries about the global economy.

Investors concerned about a drop in demand for petroleum pushed the price of benchmark West Texas Intermediate crude for September down $5.20, or 5.9 percent, to $82.38 per barrel on the New York Mercantile Exchange.

Brent crude, used to price many international oil varieties, dropped $3.61 to end at $106.99 per barrel on the ICE Futures exchange in London.

— From news service reports