NEW YORK – Wal-Mart Stores Inc. said Monday that it's scaling back the growth of its namesake discount stores in the U.S., while focusing on remodeling existing locations as the world's largest retailer navigates through a tough consumer spending climate.

Eduardo Castro-Wright, president and chief executive of Wal-Mart's U.S. division, told analysts gathered on the first day of the two-day annual investors' meeting at its headquarters in Bentonville, Ark., that the company plans to open 191 stores in fiscal 2009 and from 142 to 157 stores in fiscal 2010. That compares to 218 stores opened in fiscal 2008.

As a result, capital expenditures will be down to $5.8 billion to $6.4 billion for fiscal 2009 and from $6.3 billion to $6.8 billion in fiscal 2010. That compares with the $9.1 billion the company spent in capital expenditures in its last fiscal year.

Company officials are expected to offer the capital expenditures forecast for the entire company on Tuesday.

WASHINGTON (Reuters) –
Sales of newly constructed U.S. single-family homes rose in September and inventories shrank as builders slashed prices to their lowest level in four years to move property as a financial crisis deepens.

The annual sales pace of 464,000 homes was up 2.7 percent from the revised August figure of 452,000, originally reported as 460,000 homes, Commerce Department data showed on Monday. Economists polled by Reuters expected the new homes sales pace to dip to 450,000 from that original figure.

The median sales price of $218,400 was 9.1 percent lower than the year-ago point and the lowest since the $211,600 level reached in September 2004, when the housing market was on the upswing.

A five-year run-up in home values ended in 2006 and has turned into a housing bust of rising foreclosures and sinking home prices. September sales were off 33.1 percent from their already deflated levels of a year ago.

For the last two years, home builders have tried to find the highest price level that will entice buyers and help them burn off an overstock of homes.

The lower prices of September seem to have attracted some buyers since the housing inventory of 394,000 was the lowest since the 383,000 homes for sale in June 2004.

Markets were spurred higher after the news but had flattened by the late afternoon.

The 7.3 percent decline in inventory from August was the sharpest on record. At the current sales pace, it would take 10.4 months to clear the overstock of homes compared to the 11.4 months reported in August.

Still, analysts said high inventories would continue to pressure prices.

"The tremendous overbuild suggests that prices will remain under year on year pressure out at least through mid-2009," said T.J. Marta, rates strategist at RBC Barclays Capital Markets in New York.

Consumer mortgage rates are also being closely watched as a major factor on the minds of prospective buyers.

For months, borrowing costs have climbed amid a global credit crunch and Washington policy-makers have had only mixed success in tapping down the costs of home loans. Rates for 30-year mortgages hovered below 6 percent in mid September but have since climbed slightly above that mark.

Across the regions, the strength of markets varied greatly with sales down 21.4 percent in the Northeast and up 22.7 percent in the West. The Midwest was down 5.8 percent while the South was up 0.7 percent.

The pace of existing home sales rose sharply in September to a 5.18 million-unit annual rate to log the first year-over-year increase in sales in nearly three years, according to a report from the National Association of Realtors on Friday.

Also on Monday, data on building permits showed a more narrow decline than first reported for September.

The Commerce Department said that permit activity had declined by 6.1 percent -- compared to the 8.3 percent decline first reported.

(Reporting by Patrick Rucker; Additional reporting by Julie Haviv in New York, Editing by Andrea Ricci)

WASHINGTON (Reuters) –
More U.S. banks lined up for government cash and the Group of Seven expressed concern the soaring Japanese yen posed a threat to financial and economic stability as recession worries spread worldwide.

Countries in Europe and Asia took emergency actions to shore up their financial positions. South Korea cut interest rates, Australia intervened in the currency market, and the International Monetary Fund moved to help Hungary and Ukraine.

The credit crisis, which began with failing U.S. mortgages, has mushroomed into a worldwide rout as investors sell stocks and commodities, shun risky emerging markets and seek out only the safest government bonds and currencies.

But there were some promising signs that government efforts to revive credit markets were beginning to pay off as borrowing costs eased.

London interbank lending rates moderated somewhat and the U.S. Federal Reserve set the terms for its program to buy commercial paper, bolstering a market that is vital for funding companies' day-to-day business activities.

U.S. stocks reversed early losses. The Standard & Poor's 500 index was up 0.8 percent in mid-afternoon trading amid hopes of a credit market thaw.

Financial companies including Comerica Inc, SunTrust Banks Inc and State Street Corp agreed to sell stakes to the U.S. Treasury Department as part of the $700 billion rescue plan approved by Congress earlier this month.

The U.S. government was also considering at least $5 billion in aid to facilitate a merger between hobbled auto makers General Motors and Chrysler, according to a source familiar with Treasury's thinking.

Loews Corp, a conglomerate run by the billionaire Tisch family, said it would inject up to $1.25 billion of new capital into its CNA Financial Corp commercial insurance unit after bad investments drove up losses.

In the U.S. housing market, the root of the global crisis, government data released on Monday showed that sales of newly constructed single-family homes rose in September and inventories shrank as builders slashed prices to their lowest level in four years.

The U.S. central bank is almost certain to trim short-term interest rates at its policy-setting meeting later in the week, and British Prime Minister Gordon Brown hinted that central bank action may be more widespread. European Central Bank President Jean-Claude Trichet also signaled that a rate cut was coming, perhaps next week.

"I consider possible that the Governing Council will decrease interest rates once again at its next meeting on November 6," he said in a speech at a banking conference in Madrid. "It is not a certainty, it is a possibility.

While Wall Street pared losses, world financial markets reacted sharply to the twin perils of financial crisis and global recession.

MSCI's main world stock index was down 2.6 percent, closing in on a 50 percent decline for the year to date. Its emerging market counterpart was down 3.7 percent, having earlier hit a four-year low.

The FTSEurofirst 300 index closed down 1.7 percent.

Oil was trading up slightly, near $65 per barrel.

COOLING THE YEN

The financial market turmoil has put the focus of the U.S. presidential election firmly on the economy, which has helped to push Democrat Barack Obama ahead of Republican John McCain in opinion polls. The election is next Tuesday.

Volatility has surged across financial markets as investors are forced to sell assets -- often bought with borrowed money -- to repay creditors or cover margin calls as asset prices fall and credit limits are breached.

The upheaval has most recently hit currency markets.

A brief G7 statement focused on the yen, fanning speculation the Bank of Japan would intervene in currency markets for the first time in four years.

"We are concerned about the recent excessive volatility in the exchange rate of the yen and its possible adverse implications for economic and financial stability," said the group, comprising the United States, Japan, Germany, Britain, France, Italy and Canada.

The yen's rapid ascent against the dollar and euro is making Japanese exports much more expensive at a time when the country's overseas customers are lurching toward recession.

The dollar, however, was rising against major currencies except for the yen, so there was skepticism about whether any coordinated action on the currency would be forthcoming.

The U.S. currency was up against a basket of major currencies on Monday..

The Reserve Bank of Australia intervened in the currency market, buying Australian dollars for U.S. dollars in Europe.

FOR RICHER OR POORER

Mitsubishi UFJ Financial Group, Japan's biggest bank, said it would raise up to $10.6 billion to replenish a capital base depleted by a plunging stock market and its investment in Morgan Stanley.

South Korea resorted to a record interest rate cut as policymakers grappled with the 15-month-old crisis that has shattered investor confidence, and threatens a deep recession.

The crisis was also taking a heavy toll on emerging markets as investors withdrew funds and commodity-based economies struggled with falling prices for everything from corn to copper.

The IMF said it had reached an agreement with Hungary to provide a "substantial financing package" in the next few days that would include funding by the European Union and some individual European governments.

It agreed on a $16.5 billion loan for Ukraine on Sunday.

"The focus has shifted to vulnerabilities in emerging markets, and policy initiatives aimed at reducing the impact of dysfunctional global credit markets on emerging market countries will be key in the short-term," said Goldman Sachs analyst Jens Nordvig.

(Additional writing and reporting by Jeremy Gaunt in London and Kevin Plumberg in Hong Kong; Editing by Steve Orlofsky, Brian Moss and Philip Barbara)