Morning Market Roundup: Oil Above $105 in Asia, J.C. Penny Posts Million Dollar Loss

Here’s what’s important in the financial world this morning:

Oil & Asia: Oil prices rose to a fresh nine-month high above $108 a barrel Friday in Asia amid signs the U.S. economy “is improving” against a backdrop of elevated tensions in the Middle East over Iran’s nuclear program, the AP reports. Benchmark crude for April delivery was up 59 cents to $108.42 per barrel late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $1.55 to settle at $107.83 in New York on Thursday.

Brent crude was up 55 cents at $124.17 per barrel in London.

Traders brushed off evidence that crude demand in the U.S. remains weak. The Energy Department’s Energy Information Administration said Thursday crude inventories rose 1.6 million barrels last week and that oil demand has dropped 6.7 percent from a year ago.

“The ability of crude to post new highs in the face of what appeared to be a bearish EIA report attests to the underlying strength of this price advance,” energy trader and consultant Ritterbusch and Associates said in a report. “The oil market has evolved into somewhat of a self perpetuating cycle in which new highs beget new buying that forces new highs.”

Bank of America: BofA will “stop selling new home loans to Fannie Mae after a dispute over faulty mortgages. Starting this month, the second-largest U.S. lender by assets will deliver only loan modifications and refinancings to Fannie Mae, the bank said Thursday in its annual filing with securities regulators,” Wall St. Cheat Sheet reports.

The bank has been fending off legal disputes tied to faulty home mortgages since the financial crisis, according to Wall St. Fannie Mae has been among the biggest claimants. The bank’s 2008 acquisition of Countrywide Financial left it responsible for the lender’s shoddy loans, which cost Bank of America roughly $42 billion, the report adds.

“This decision will not affect the credit available to our customers, and we will rely on other sources of liquidity to continue to ensure we are lending to our customers and supporting the housing-market recovery,” said Jerry Dubrowski, a spokesman for the bank, in an e-mailed statement. “We remain focused on supporting our customers with loan modifications and refinancing through the Making Home Affordable program.”

Instead, BofA will sell new loans to Freddie Mac, or keep them on its balance sheet, according to a source with direct knowledge of the plans

J.C. Penny: The retailer reported a loss of $87 million in the fourth-quarter, citing restructuring and management transition charges as well as the financial impact of preparing for its new pricing strategy.

“While 2011 was a year of transition at J.C. Penney, 2012 will be a year of transformation,” CEO Ron Johnson, a former Apple executive, said in a statement. He joined the board last August and became CEO in November.

But he has moved quickly to shake up a company that has been a laggard in the department store sector. It is transforming everything from its simplified pricing approach to what it keeps in stock. With its new pricing plan that debuted shortly after the end of the fourth quarter, the company is embracing a three-tier strategy: everyday prices that are about 40 percent less than initial prices of a year ago, deeper promotions that last a month and clearance events the first and third Friday of each month.

U.S. Home Sales: Sales of new U.S. homes dipped in January but only after the government said the final quarter of 2011 was “stronger” than first estimated.

The Commerce Department says new-home sales fell 0.9 percent last month to a seasonally adjusted annual rate of 321,000 homes. That followed four straight months of gains in which home sales rose 10 percent.

The gains came after the government upwardly revised October, November and December’s figures. December’s annual sales pace of 324,000 was the highest in a year.

Higher sales at the end of last year should bolster the view that the housing market is starting to revive. Still, new homes are selling well below the 700,000-per-year rate that economists equate with healthy markets.

The Associated Press contributed to this report.