Business in brief: Credit-rating agency downgrades builders
Credit-rating agencies are betting that the housing downturn will deepen well into next year, dragging out home-builders’ woes.
Fitch Ratings on Tuesday slashed its issuer default ratings for eight home-builders, bumping three — Ryland Group Inc., D.R. Horton and Centex Corp. — into “junk” status.
Fitch said its ratings reflect its expectation that the housing slump will extend into next year and hurt prospects for a recovery in the home-building sector.
Oil imports push U.S. trade deficit higher
The trade deficit soared to the highest level in more than a year as an improvement in exports was swamped by record-high levels of imported crude oil. The deficit with China also rose sharply.
The gap between what the United States imports and what it sells abroad rose by 7.8 percent in April to $60.9 billion, the Commerce Department reported Tuesday. It was the largest imbalance since March 2007.
The higher deficit was driven by a $4.3 billion increase in crude oil imports, which jumped to a record $29.3 billion in April, as the average per-barrel price rose to an all-time high of $96.81.
Fines proposed for credit card practices
Federal officials are seeking more than $200 million in fines and restitution from CompuCredit Corp. and two banks that allegedly engaged in deceptive credit card marketing practices.
The Federal Trade Commission and Federal Deposit Insurance Corp. on Tuesday said CompuCredit and the banks failed to disclose up-front fees and other conditions adequately when marketing cards under the Aspire, FreedomCard, Tribute and other brand names.
The cards were largely marketed to individuals with weak credit histories, also known as the subprime market, regulators said.
Central America storms boost coffee futures
Coffee futures rose Tuesday as investors bet that recent storms in Central America may have damaged crops, hurting global supplies at a time of rising demand.
Heavy rain and wind lashed Honduras last week, knocking down trees and unleashing deadly floods. Some coffee growers reported that flooding wiped out coffee crops.
Arabica coffee for July delivery rose 4 cents to $1.3505 a pound on the Intercontinental Exchange in New York after earlier trading as high as $1.3585.
Crops in Brazil, the world’s largest producer, are expected to be strong this year but down slightly from 2007.
From wire reports