WASHINGTON (AP) - The Bush administration has hammered out an agreement to freeze interest rates for certain subprime mortgages for five years to combat a soaring tide of foreclosures, congressional aides said Wednesday.

The aides, who spoke on condition of anonymity because the details have not yet been released, said the five-year moratorium represented a compromise between desires by banking regulators for a longer time frame of up to seven years and mortgage industry arguments that the freeze should last only one or two years.

Another person familiar with the matter said the rate-freeze plan would apply to borrowers with loans made at the start of 2005 through July 30 of this year with rates that are scheduled to rise between Jan. 1, 2008, and July 31, 2010.

The administration said President Bush will speak on the agreement at the White House on Thursday, and the Treasury Department announced that Treasury Secretary Henry Paulson and Housing and Urban Development Secretary Alphonso Jackson would hold a joint news conference Thursday afternoon with mortgage industry officials.



WASHINGTON (AP) -- Orders to U.S. factories rose unexpectedly in October although much of the gain reflected higher energy prices.

The Commerce Department reported that orders advanced by 0.5 percent in October, far better than the flat reading that was expected. However, much of the strength came from a big jump in the cost of petroleum and other energy prices, which pumped up orders at oil refineries and chemical plants. The orders figures are not adjusted for changes in prices.

Orders for nondurable goods such as petroleum products rose by 1.3 percent, helping to offset a 0.2 percent drop in demand for durable goods. The 0.5 percent overall rise in factory orders was the best showing since a 3.4 percent jump in July.

In other economic news, the Labor Department reported that worker productivity roared ahead at an annual rate of 6.3 percent this summer while wage pressures dropped sharply.



NEW YORK (AP) -- Wall Street resumed its rally Wednesday after new data showed the overall economy is holding up but isn't too strong to prevent the Federal Reserve from cutting interest rates. The Dow Jones industrial average rose nearly 200 points.

Stocks turned around following two sessions of losses after a report showed hiring in the U.S. private sector expanded at a faster pace in November. ADP Employer Services said 189,000 jobs were added during the month -- an increase that bodes well for consumer spending.

The report raised hopes for a strong November jobs report from the Labor Department on Friday. Investors were also encouraged Wednesday after the department reported worker productivity advanced by an annual rate of 6.3 percent in the summer, the fastest pace in four years, while wage pressures eased.

Still, there is enough uncertainty in the economy to bolster the argument for lower rates. The financial sector is still struggling from months of credit problems, and the Institute for Supply Management reported Wednesday that service sector growth slowed in November.



NEW YORK (AP) -- Oil futures fell Wednesday to their lowest level in six weeks after a mixed government inventory report failed to offset a belief that supplies are growing faster than demand.

Investors shrugged off OPEC's decision to keep production levels steady, a possible sign prices have peaked for the year, analysts said.

In its weekly inventory report, the Energy Department's Energy Information Administration said crude supplies plunged by 8 million barrels last week, much more than the expected 700,000 barrel decline. That caused oil prices to jump briefly above $90 a barrel, but other aspects of the report weighed on prices as the day wore on.

Crude supplies grew at the closely watched Nymex delivery terminal in Cushing, Okla. Inventories of heating oil rose when analysts had expected a decline, and gasoline supplies rose more than expected.

Earlier Wednesday, Organization of Petroleum Exporting Countries ministers meeting in Abu Dhabi, United Arab Emirates, said the cartel would leave output unchanged 'for the time being' because the world was 'well supplied' and crude reserves are at comfortable levels.



WASHINGTON (AP) -- Fannie Mae warned investors Wednesday that its losses would mount next year from bad home loans, even as the mortgage finance company took steps to stabilize its finances.

A day after announcing it would sell stock and slice its dividend, Fannie Mae also disclosed in a regulatory filing that its mortgage investments declined by $9 billion in November, compared with the prior month, as it sold some off to raise capital.

Fannie and its smaller government-sponsored rival Freddie Mac have been forced to set aside billions of extra dollars to account for bad loans, eroding their profits at a time when home prices are falling and foreclosures are rising on high-risk mortgages made to borrowers with weak credit histories. Fannie said it expects U.S. home prices to fall by 10 percent to 12 percent from their peak before the housing market can rebound.

In 2008, Fannie expects to lose money on eight to 10 out of every 1,000 mortgages held on its $2.4 trillion book, the company said Wednesday. That would be a steep increase from 2007, when it expects four to six out of every 1,000 mortgages to be money-losers.



PHILADELPHIA (AP) -- Shares of Comcast Corp., the nation's largest cable operator, tumbled to a 20-month low Wednesday after it disclosed that this year's cable revenue growth and cash flow will come in lower than expected. It said consumers were balking at increasing their spending in a slowing economy and phone companies had stepped up competition.

Meanwhile, Comcast also raised its capital spending to push advanced digital set-top boxes and its digital services.

Cable stocks have struggled in 2007 on worries of stricter regulations, a slowing economy and competition from phone companies as they lured customers with their video services. Cable had enjoyed an advantage of being able to deliver video, Internet and phone services through one provider.



WASHINGTON (AP) -- A panel of government advisers said Wednesday Genentech drug Avastin should not be approved for expanded use in breast-cancer patients.

After weighing evidence on whether the drug meaningfully improves life for patients with advanced breast cancer, Food and Drug Administration advisers voted 5-4 against recommending approval. FDA is not required to follow the recommendations of its panel, though it usually does.

San Francisco-based Genentech Inc. asked the FDA to approve the drug for use alongside chemotherapy for breast cancer patients.

Before the meeting, FDA scientists said that while Avastin slowed the progression of cancer, it did not improve patients' life spans overall. Scientists questioned whether the drug should be approved for the new use, considering side effects, which include heart attack, hypertension and blood clots.



NEW YORK (AP) -- Homeowners started losing hold of their homes years before spiking foreclosures and the housing slump slammed the economy.

Piece by piece, some gave away their homes by tapping equity to take cash out to pay for cars, weddings and vacations. Others never owned one brick. During the country's most recent housing boom, the term 'homeowner' became a misnomer as lenders offered financing of 100 percent or more to some buyers.

Now, slipping home prices threaten to further erode the value of many Americans' single largest asset, curbing consumer spending and jeopardizing retirement assets.

Thanks in large part to mortgage-related tax deductions and a drumbeat of advice that everyone should own their home, the U.S. homeownership rate rose steadily in recent decades. It peaked at 69.2 percent in 2004 before backing down to 68.2 percent at the end of the third quarter, according to the Census Bureau, which has collected the data since 1965.



By The Associated Press

The Dow rose 196.23, or 1.48 percent, to 13,444.96, resuming the big recovery it launched last week following a mostly dismal November.

The Standard & Poor's 500 index added 22.22, or 1.52 percent, to 1,485.01, while the Nasdaq composite index rose 46.53, or 1.78 percent, to 2,666.36.

Light, sweet crude for January delivery fell 83 cents to settle at $87.49 a barrel on the New York Mercantile Exchange, oil's lowest close since Oct. 24. Prices continued drifting lower in after-hours trading, dipping below $87.

Other energy futures were mixed. January gasoline fell 3.47 cents to settle at $2.217 a gallon on the Nymex, and January heating oil fell 2.25 cents to settle at $2.4893 a gallon. January natural gas rose 3 cents to settle at $7.185 per 1,000 cubic feet on the Nymex.

In London, December Brent crude fell $1.04 to settle at $88.49 a barrel on the ICE Futures exchange.



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