(08-14) 11:14 PDT Los Angeles (AP) —

Home sales in a six-county region of Southern California dipped to a 12-year low for July as a growing percentage of homes went on the market as a result of foreclosures, a research firm said Tuesday.

Foreclosure resales accounted for 8.3 percent of sales activity in July, up from 7.7 percent in June, according to DataQuick Information Systems.

In all, 17,867 homes and condominiums were sold last month in Los Angeles, Riverside, San Bernardino, San Diego, Orange and Ventura counties.

The total represents a 27.4 percent drop from July 2006 and an increase of 0.6 from sales in June, the firm reported.

Last month’s sales were the slowest for July since 1995, when 16,225 homes were sold.

DataQuick President Marshall Prentice said the region was experiencing a recession and people were leaving the area the last time Southern California saw home sales this slow.

“This time around we haven’t seen that. Sellers are holding out and we can only assume demand is building up,” Prentice said. “These are interesting times because the slowdown in home sales isn’t part of a broader economic slowdown, it’s a post-frenzy rebalancing act.”

Trends seen during the housing market frenzy several years ago have eased.

Financing with adjustable-rate mortgages and multiple mortgages has declined significantly, while “flipping” rates and non-owner occupied buying activity is flat, DataQuick reported.

Despite flagging sales, the median sale price of a home in the region reached $505,000, up 3.7 percent from $487,000 in July 2006, the firm said.

The median price of homes in Los Angeles County rose to $547,500 in July, up 5.3 percent on an annual basis. It was the strongest increase in the region.

Ventura County posted the largest annual decline, with its median price falling 5.1 percent to $582,500. It was followed by Riverside County, which had a drop of 3.9 percent to $399,000.

Orange County’s median price remained flat at $640,000, while the annual figure dropped 3.1 percent in San Bernardino County to $355,000, the firm said.

The median price in San Diego County was $489,000, down 2.2 percent from the year-ago period.

Northern California and statewide home sales figures for July were expected to be released Wednesday.

Microsoft Corp. introduced a redesign of its search engine Wednesday, joining a wave of Web sites that have revamped their results pages to get users the information they want more quickly.

The changes are Microsoft’s latest attempt to gain ground on Mountain View’s Google Inc., which dominates the search industry despite major investments by a raft of competitors.

As part of its effort, Microsoft refined its algorithm to show more relevant results, even when a query is misspelled, and offer suggestions for refining search terms. Users also will more frequently see images at the top of the results page and get instant answers when they seek factual information such as the “population of Uganda.”

Microsoft’s update leans heavily on expanding its search index by a factor of four, although the company declined to disclose the exact size of the index. The bigger size, executives said, will allow the engine, called Live Search, at msn.com or live.com, to provide more relevant results, particularly for more obscure queries.

Satya Nadella, a vice president who works on search and advertising for Microsoft, said Microsoft’s goal is to get existing users to search more frequently, rather than to lure users from other engines. The goal reflects the difficulty Microsoft has had in getting users to switch, three years after its search engine premiered.

Nadella said that with the upgrade, which will be rolled out over the next few weeks, Microsoft is now in a better position “to stay in the arms race,” adding that he believed the company’s engine is now on par with Google in terms of quality.

“We know that this is not one of those things where you achieve a milestone and you’re done,” he said.

Google led the U.S. search industry with 56.5 percent of the market in August, followed by Yahoo Inc. with 23.3 percent, according to comScore Inc. Microsoft was a distant third with an 11.3 percent market share.

Microsoft’s revamp follows recent redesigns at Google, which added videos, photographs and book excerpts to its main results. Ask.com underwent an even more radical transformation.

Yahoo plans to unveil an upgrade to its search engine in the coming weeks, according to sources familiar with the venture.

Greg Sterling, principal for Sterling Market Intelligence, said many of Microsoft’s changes are similar to what its rivals already offer.

Everyone, he said, seems to be moving in the same direction, much like in the automobile industry, where manufacturers appear to copy car designs from each other.

Search engines have moved away from their early results of 10 blue links to providing more immediate answers and images, helping users avoid a few clicks with their computer mouse.

Sterling agrees that Microsoft’s redesign succeeds in improving the relevance of its search results and offers a better layout, but he questioned whether the changes are enough to make much of a dent in Google’s hold.

In addition to making tweaks to its main search engine, Microsoft is adding search features for entertainment, shopping, health and maps.

Users who search a celebrity’s name will get more entertainment information and access to a feature called xRank, which tracks the buzz around a celebrity by showing the person’s ranking in daily searches against others in the klieg lights.

A new health search area also is available, following Microsoft’s acquisition this year of MedStory, which offers medical information from various sources. Search market

Google Inc. claimed more than half of the U.S. search industry market in August.

Google56.5 percent

Yahoo23.3 percent

Microsoft11.3 percent

Source: comScore Inc.

E-mail Verne Kopytoff at vkopytoff@sfchronicle.com.

Major stock indexes posted solid gains Wednesday as market sentiment was lifted by news the United Auto Workers and General Motors («www.businessweek.com») had reached a tentative contract agreement, ending a two-day strike. A news report that Warren Buffet and other parties were engaged in talks to buy a stake in Bear Stearns («www.businessweek.com») also cheered investors. Meanwhile, a plunge in August durable goods orders gave some ammunition to market players arguing for further rate cuts by the Federal Reserve.

On Wednesday, the Dow Jones industrial average climbed 99.5 points, or 0.72%, to 13,878.15. The broader S&P 500 index added 8.21 points, or 0.54%, to 1,525.42. The tech-heavy Nasdaq composite index rose 15.58 points, or 0.44%, to 2,695.34.

The broader market was strong as well. On the NYSE, 22 stocks rose in price for each 11 that fell. Nasdaq breadth was 18-12 positive.

GM shares gained over 9% Wednesday after the company and the UAW announced that they reached a tentative agreement on a new national labor contract, covering about 74,000 employees. The agreement is subject to UAW member ratification. The parties also agreed to create an independent retiree health care trust.

The strength in GM, along with a 6% rise in shares of Ford Motor Co. («www.businessweek.com»), helped send the S&P Autos index higher by 8%. Auto parts and equipment stocks gained as well. In addition, Ford was supported by news that S&P Ratings Services placed its credit ratings on CreditWatch with positive implications.

The S&P investment banking & brokerage index gained 2.8% Wednesday, led by a 7.7% jump in Bear Stearns after a New York Times report of the possible sale if an equity stake in the firm.

In economic news Wednesday, a government report showed that durable goods orders fell 4.9% in August after rising 6.1% in July, which was revised from a 6.0% increase. Transportation orders fell 11.2% in August, but after a cumulative gain of 21% two months prior. A drop in Boeing («www.businessweek.com») orders explain the August decline, with civilian aircraft down 41%. Excluding transportation, orders dipped 1.8%.

Market players were monitoring speeches by Federal Reserve officials. Philadelphia Fed President Charles Plosser said Tuesday night that last week’s interest-rate cut could cause inflation to accelerate and policy makers must be ready to reverse course if needed.

According to Roger Volz, chief technical strategist for Swiss American Securities in New York, the Street continues to look for more rate cuts, reinforcing thoughts of a consumer-led slowdown, and Fed funds futures are pricing in 25 basis-point reductions at the October and December Fed meetings. “Bad economic news is good news for rate cut hawks” wrote Volz in a note Wednesday.

Crude oil prices tumbled and then moved higher in a volatile session Wednesday. Prices initially moved lower on news of a build in supplies, only to shoot higher late in the session on forecasts of storm threat in Gulf of Mexico. November West Texas Intermediate crude oil rose 77 cents to $80.30 per barrel.

An Energy Dept. report showed crude oil stocks rose 1.8 million barrels to 320.6 million. Inventories are above the upper end of the average range for this time of year. Crude oil refinery inputs fell 339,000 barrels a day from the previous week’s average. (

Among stocks in the news Wednesday, Qualcomm («www.businessweek.com») said it anticipates fourth quarter pro forma revenues to be at or slightly above the high end of the prior guidance of approximately $2.15-$2.25 billion, with pro forma EPS to be approximately 52-53 cents, compared with 42 cents in the year-ago quarter.

Red Hat («www.businessweek.com») posted second quarter EPS (GAAP basis) of 9 cents, vs. 5 cents in the year-earlier quarter, on a 28% revenue rise.

Amgen («www.businessweek.com») says data from a Phase 2 study suggests extended dosing of Aranesp, paired with chemotherapy treatment (every two or every three weeks, depending on the chemotherapy regimen) appeared to be efficacious with respect to changes in hemoglobin, with no unexpected adverse events observed when compared to weekly dosing.

Timberland («www.businessweek.com») said it expects third-quarter sales to decline in the low double-digit percentage range and says it will close most of its specialty retail shops. The company says the shop closures will result in a $17 million charge, $7 million of which will be incurred in the third quarter.

European indexes moved solidly higher Wednesday, though gains ebbed late in the session. In London, the FTSE 100 index rose 0.56% to 6,433. Germany’s DAX index added 0.45% to 7,804.15. In Paris, the CAC 40 index climbed 0.87% to 5,690.77.

Asian indexes were mixed Wednesday. Japan’s Nikkei 225 index rose 0.21% to 16,435.74, while Shanghai’s benchmark index slumped 1.61%. Markets in Hong Kong were closed for a holiday. Treasury Market

Treasuries finished little changed Wednesday, recovering from early weakness on back of firm demand for a two-year note auction. The 10-year note edged down 01/32 in price to 100-30/32 for a yield of 4.63%. The 30-year bond firmed 01/32 to 101-18/32 for a yield of 4.90%.