Moody’s lowers debt rating of 3 top banks
NEW YORK — Three of the top U.S. banks are likely to start paying more to borrow money.
Moody’s Investors Service on Wednesday lowered its debt ratings for Bank of America, Wells Fargo and Citigroup. The ratings agency said it has become less likely that the U.S. government would step in and prevent the three lenders from failing in a crisis.
Bank of America Corp. was hit worst. Moody’s downgraded its key long-term debt ratings two notches, to Baa1 from A2. Wells Fargo & Co.’s long-term debt rating fell one notch to A2 from A1, while Citigroup Inc.’s rating remained at A3. Moody’s did downgrade Citi’s short-term debt.
Foreclosures driving home sales increase
WASHINGTON — The number of Americans who bought previously occupied homes rose in August. But sales were driven by an increase in foreclosures, evidence the housing market remains weak.
The National Association of Realtors says home sales rose
7.7 percent last month to a seasonally adjusted annual rate of 5.03 million homes. That’s below the 6 million that economists say is consistent with a healthy housing market.
Last month’s pace was slightly ahead of the 4.91 million sold in 2010, the weakest sales year in 13 years.
Homes at risk of foreclosure made up 31 percent of sales, up from 29 percent in July.
First-time homebuyers were unchanged at 32 percent of all sales. They normally make up 50 percent of sales in healthy markets.
In Augusta, home sales rose 7.2 percent, according to data from the Greater Augusta Association of Realtors. There were 467 homes sold in August, up from 433 in July.
SunTrust clears last hurdle from bailout
WASHINGTON — The government says it will sell warrants it holds in Atlanta-based SunTrust Banks Inc. today, the latest move to recoup costs from the $700 billion financial bailout.
The Treasury Department says the sales would cover
17.9 million warrants. A warrant gives the purchaser the right to buy SunTrust stock at a specified price.
The government will hold two sales because Sun Trust received two disbursements. One group would have the option to bid a minimum of $2; the second would bid at least $1.05.
Sun Trust received $4.85 billion from the Federal government in fall 2008, at the height of the financial crisis.
The bank repaid the money in March.
The sale of the warrants will sever the bank’s ties from the bailout fund.
In other news
JOHNSON & JOHNSON has resumed shipping Tylenol Cold & Flu Severe caplets, one of the many products it had recalled because of a variety of manufacturing deficiencies over the past two years.
GENERAL MILLS INC.’S fiscal first-quarter net income fell
14 percent as one of the nation’s biggest food companies continued to deal with high ingredient and energy costs. Adjusted results beat Wall Street’s expectations as revenue climbed.
– From staff and wire reports