Business briefs for March 24, 2005

Thursday, March 24, 2005 | 11:28 a.m.

New home sales rose 9.4 percent in February

U.S. new-home sales surged 9.4 percent in February, the biggest increase in more than four years, as job growth and the prospect of higher mortgage rates spurred buying. Prices were a record.

The larger-than-expected rise brought sales to 1.226 million houses at an annual rate, from a six-month low of 1.121 million in January, the Commerce Department said today in Washington. The median sales price increased to $230,700 from $210,400, which was the lowest since March 2004.

Forecasts for higher mortgage rates are based on expectations that Federal Reserve policymakers will keep raising the benchmark U.S. interest rate this year to keep inflation in check.

Kmart shareholders approve Sears-Kmart acquisition

HOFFMAN ESTATES, Ill. -- Kmart Holding Corp. shareholders approved the acquisition of Sears, Roebuck and Co. today in an $11 billion deal executives hope will create a retail powerhouse while helping to reverse years of lagging sales.

The Kmart shareholders meeting at Sears headquarters in suburban Chicago was perfunctory, lasting just five minutes. Sears shareholders were scheduled to vote on the deal later Thursday.

Kmart Chairman Edward Lampert unveiled the proposed pairing of longtime industry rivals four months ago. Barring a last-minute hitch, Sears' sprawling headquarters will now house a new retail titan named Sears Holdings Corp. with $55 billion in revenue, 3,800 stores and an uncertain future.