Mexico searches for 7 missing in boating accident (AP)

TIJUANA, Mexico – Mexican rescuers scoured the Gulf of California for seven missing U.S. tourists whose boat capsized two days ago, saying they were extending the search because the castaways could still be alive in the warm, calm waters.

One American has been confirmed dead in the accident, which came after a flash storm upended the boat before dawn Sunday, spilling dozens of tourists and crew members into the water. The identity of the dead man was not released.

By early Monday, 19 of the tourists and all 16 crew members had been picked up by the navy or other fishing boats after clinging to coolers, rescue rings and life vests for more than 16 hours.

Mexican Navy, army and state officials met late Monday to discuss the search and there were reports they would call off rescue efforts. But instead they announced the search would continue over an extended area.

Mexican navy Capt. Benjamin Pineda Gomez said that with the warm weather and water temperature in the Gulf of California, it's still possible that the missing tourists are alive.

"A person who casts away can survive many days. That sea is calm," he said.

The U.S. Coast Guard offered Mexico help in the search and rescue operation and said it will continue its operations.

The 115-foot (35-meter) vessel, the Erik, sank about 60 miles (100 kilometers) south of the port of San Felipe around 2:30 a.m. PDT (5:30 a.m. EDT; 0930 GMT) Sunday, the second day of a weeklong vacation fishing trip the group had organized for several years each Independence Day holiday.

The boat capsized less than two miles (three kilometers) from shore, but the navy extended its search 60 miles (100 kilometers) deeper into the gulf later Monday after searching the area by helicopter and airplane and finding nothing, Pineda said.

Most of the 27 men on the fishing excursion are from Northern California and had made the trip before.

"I'm beyond concerned," said Kristina Bronstein, who is engaged to missing tourist Mark Dorland of Twain Harte, California.

She heard about the accident Monday morning from a trip organizer's wife, who told her Dorland, 62, was one of the first people to fall into the water. He wasn't wearing a life vest.

The couple are to be married next month.

Charles Gibson, a police officer with the Contra Costa Community College District, said people on the boat were awoken by other passengers and the crew as it began to sink.

Most "were in the water for over 16 hours," said Gibson, who had gone on the fishing trip twice before. "We hope that the information is getting to our families that we are here and that we survived."

Another survivor, Lee Ikegami, called his wife in San Martin, California, and told her he survived by clambering into a life raft when the boat overturned.

"There was an angel sitting on his shoulder," his wife, Murphy Ikegami, said.

Murphy Ikegami said the fishermen made the trip every year but would only make day trips out tosea to fish and stayed in hotels along the coast at night. This year, she said, they decided they wanted to sleep on the boat.

Those rescued were in good condition with a few scrapes after bobbing in the intense sun and Gulf waters that were about 77 degrees Fahrenheit (25 degres Celsius), according to the Mexican navy weather analysis. Photos released by the Mexican navy showed several sunburned fishermen in T-shirts and Bermuda shorts waiting to get on a bus.

The Erik has been on the Gulf of California, known in Mexico as the Sea of Cortez, since 1989, according to the website of the company Baja Sportfishing Inc. It was built in Holland and was equipped with stabilizers to handle the turbulent North Sea.

The California Secretary of State website says Baja Sportfishing's business license has been suspended. It doesn't state a reason or give a date.

"We have been working with Mexican Navy authorities and the U.S. Coast Guard in the search and rescue," Baja Sportfishing Inc. said in a brief statement e-mailed to The Associated Press. "Right now our main concern is making sure that everyone is accounted for."

The company didn't respond to an interview request. It said in an announcement posted on its website Monday afternoon that all trips have been canceled.

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Associated Press writers Olga R. Rodriguez in Mexico City, Paul Elias in San Francisco, California, and Phuong Le in Seattle contributed to this report.

Homebuilders missing out on economic recovery (AP)

WASHINGTON – For homebuilders, it hardly feels like an economic recovery.

Nearly two years after the recession ended, the pace of construction is inching along at less than half the level considered healthy. Single-family home building, the bulk of the market, has dropped 11 percent in that time.

Builders are struggling to compete with waves of foreclosures that have forced down prices for previously occupied homes. The weakness is weighing on the economy: Though new homes represent a small portion of overall sales, they have an outsized effect on jobs.

The Commerce Department said Tuesday that new-home construction plummeted in April to a seasonally adjusted rate of 523,000 homes per year. A major drop in volatile apartment building pulled down the monthly figures. And strong tornadoes and flooding also disrupted construction projects throughout the South.

Still, through the first four months of this year, the pace of new-home construction is barely ahead of 2009's — the worst year on records dating back a half-century.

"There are very few signs of recovery in residential construction," said Celia Chen, senior director at Moody's Analytics. "Absent evidence of stronger demand for housing, homebuilders will remain reticent to put up new homes."

The disappointing construction data contributed to a sell-off on Wall Street. The Dow Jones industrial average fell more than 110 points in mid-day trading.

Stocks also fell after Hewlett Packard lowered its earnings outlook for the rest of the year, and the Federal Reserve said temporary parts shortages out of Japan led to the first decline in factory output in 10 months.

The April drop in new-home construction was largely because apartment and condominium building plunged more than 28 percent. Single-family home construction, which makes up roughly 80 percent of the market, fell about 5 percent.

Building permits, a gauge of future construction, fell 4 percent.

"The underlying trends, as far as we can tell, are about flat, at a very low level," said Ian Shepherdson, chief U.S. economist at High Frequency Economics.

High unemployment and tighter lending standards have greatly reduced the number of potential buyers who could qualify for a mortgage. And those who are eligible have more incentive to buy a previously occupied home.

The median price of a new home was about 34 percent higher in March than the median price for a re-sale. That's more than twice the markup in healthy housing markets.

In some cities, prices are half of what they were before the housing market collapsed in 2006 and 2007. Many potential buyers who could qualify for loans are worried that prices will fall further. Others are hesitant to put their own homes on the market when prices are dropping.

The housing market has traditionally powered economic recoveries. Each new home built creates an average of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.

In previous recessions, housing accounted for 15 to 20 percent of overall economic growth. In the first post-recession year, between 2009 and 2010, housing contributed just 4 percent to the economy.

Harsh weather has hampered construction this year. Violent tornados and flooding along the Mississippi River were major factors in a 23 percent drop in building throughout the South, analysts said. Reconstruction efforts might lead to a "bounce back in May," according to Paul Dales, senior U.S. economist at Capital Economics.

Home Depot and Lowe's Cos, the nation's biggest home improvement retailers, both said bad weather led to lower revenue during the February-April quarter. The worsening housing market and higher gas prices also cut into their sales.

Home construction activity was uneven across the rest of the country. It fell nearly 5 percent in the Northeast but rose almost 4 percent in the West and nearly 16 percent in the Midwest.

On Monday, the builders' trade group said its survey of homebuilder sentiment was unchanged at 16. That's the same level it has been for six of the past seven months. Any reading below 50 indicates negative sentiment about the market. The index hasn't been above that level since April 2006.

And when asked about where they see sales of single-family home heading over the next six months, the builders surveyed offered their most pessimistic outlook since September.