WASHINGTON – SUPPLY SHRINKING: Declining home prices have helped reduce the glut of foreclosures in the nation's hardest hit housing markets. The combined supply of homes in Miami, Tampa, Las Vegas, Phoenix and Detroit has shrunk by 13 percent over the past year. Economists say that's key first step for any housing recovery.
PRICES FALLING: Home prices in each of those battered metro markets are at or below 2002 levels, according to the Standard & Poor's/Case-Shiller home price index released Tuesday.
FORECLOSURES A WORRY: Few economists see home prices rebounding this year. Most caution that a second wave of foreclosures could throw the housing market back into turmoil.
An eight-day rally in silver prices ended Tuesday as traders wait for the Federal Reserve to deliver its assessment on how the U.S. economy is doing.
Silver fell 4.5 percent, a day after pushing close to $50 an ounce. Other commodities were mixed as oil, copper, wheat and soybeans fell while corn, gasoline and heating oil rose.
The Fed is expected to signal Wednesday that it will allow a $600 billion bond-buying program to end in June as planned. In addition, Chairman Ben Bernanke has scheduled a news conference after the meeting ends.
A strong rally in commodity prices began in late August after Bernanke hinted that the central bank may buy government bonds to help stimulate the economy. The program began in November.
The Fed's low interest rates have kept the dollar's value low as other central banks begin to raise interest rates because of inflation fears. Since commodities are priced in dollars, a weak dollar makes them more of a bargain for buyers who use other currencies.
Investors turn to silver and gold during uncertain economic times because they are considered relatively stable assets.
Silver is a thinly traded market, which means price swings are more exaggerated. Silver is also cheaper than gold so it's more accessible to investors to trade in than gold is.
Spencer Patton, founder and chief investment officer for hedge fund Steel Vine Investments LLC, attributed Tuesday's price drop to investors taking profits because they are uncertain about what Bernanke and the Fed may announce.
Silver for May delivery fell $2.099 to settle at $45.05 an ounce while June gold fell $5.60 to settle at $1,503.50 an ounce.
Other metals were mixed. May copper rose 1.6 cents to settle at $4.319 a pound, July platinum fell $22.70 to $1,805.40 an ounce and June palladium fell $5.10 to $755.70 an ounce.
Corn rose after the U.S. Agriculture Department said about 9 percent of the crop had been planted for the week ending April 24. That compared with 46 percent planted during the comparable week a year ago and 23 percent on average over the past five years.
Farmers have been delayed from getting into the fields by wet, cool weather and flooding, which may affect the number of acres planted this year, analysts have said. Corn supplies are tight globally.
In contracts for July delivery, corn rose 4.25 cents to settle at $7.7275 a bushel, wheat fell 14.25 cents to $8.47 a bushel and soybeans fell 7.25 cents to $13.8925 a bushel.
Benchmark crude for June delivery fell 7 cents to settle at $112.21 per barrel on the New York Mercantile Exchange.
In other Nymex trading, heating oil rose 2.84 cents to settle at $3.2273 per gallon, gasoline rose 2.87 cents to $3.3072 per gallon and natural gas fell 0.2 cent to $4.387 per 1,000 cubic feet.
Associated Press Economics Writer Jeannine Aversa contributed to this report.
NEW YORK – The euro rose to another 16-month high against the dollar Tuesday as traders awaited a key announcement from the Federal Reserve and comments from Fed Chairman Ben Bernanke that could shake perceptions of the direction of U.S. interest rates.
Higher interest rates tend to support a currency's value, because they give investors bigger returns. The Fed has kept its key rate near zero since December 2008 and launched a $600 billion bond-buying program to keep rates low. Many analysts expect that the Fed will keep rates low for a long time despite rising gas and food prices.
Central banks overseas have already begun raising rates to combat inflation. The difference between the benchmark U.S. rate, which many investors expect the Fed to keep near zero, and rising rates abroad have helped drive the dollar 6.5 percent lower this year against a basket of six major currencies. That measure hit its lowest level since August 2008 on Tuesday.
Still, Treasury Secretary Timothy Geithner fought back criticism that the Fed's policies have weakened the dollar, giving a boost to U.S. exports. A weaker currency makes U.S. goods cheaper than those of countries with stronger currencies.
"I want to make it clear that our policy has been and will always be...that a strong dollar is in the interests of our country," Geithner said in remarks Tuesday to the Council on Foreign Relations in New York. "We will never embrace a strategy of trying to weaken our currency to gain economic advantage at the economic expense of our trading partners."
The Fed began a two-day meeting Tuesday. Bernanke's statements on Wednesday — the first-ever scheduled press conference by a Fed chief after an interest-rate policy meeting — will be studied for hints on when the Fed could change its low rate policy. The $600 billion bond buyback program is set to expire in June.
Any "hawkish" language from Bernanke on Wednesday, such as a hint at when the bank might adjust its policies, could boost the dollar, said Win Thin, currency strategist at Brown Brothers Harriman in New York. A hawkish central banker tends to be more concerned with inflation and would be more likely to raise interest rates to counter rising prices. Thin doesn't expect any such statement from the Fed chief. Bernanke has said the recent increase in oil and food prices will likely have only a temporary, mild effect on broader inflation.
The euro rose to $1.4632 late Tuesday from $1.4585 late Monday after earlier peaking at $1.4657. The dollar dipped to 81.63 Japanese yen from 82.24 yen, but the British pound dropped to $1.6475 from $1.6505.
The dollar also hit its most recent record low against the Swiss franc and fell to a more than 27-year low against the Australian dollar. The Australian dollar, which began trading freely in December 1983, shot up this year as commodity prices rose. Australia is a major exporter of raw materials and its currency tends to benefit when commodity prices climb.
The Canadian currency has likewise gained from the surge in commodity prices, climbing 4.5 percent against the dollar this year. The dollar slipped Tuesday to 95.31 Canadian cents from 95.44 Canadian cents.
AP Business Writer Pallavi Gogoi in New York contributed to this report.