In brief: Index shows home price rise in June
LOS ANGELES – A closely watched national index showed Tuesday that home prices rose in June, the last month that a federal tax credit probably boosted sales. Many experts predict a drop in values in coming months without the popular government stimulus.
Prices of previously owned single-family homes rose a modest 1 percent in June over May and 4.2 percent over June 2009, according to the Standard & Poor’s/Case-Shiller index of 20 metropolitan areas.
Federal tax credits of up to $8,000 drove sales during the spring as first-time buyers flooded into the real estate market, boosting sales of entry-level homes. Sales have been falling since the expiration of those credits, with sales of previously owned homes plunging 27.2 percent in July and sales of new homes falling 12.4 percent that month.
Tuesday’s home price report encompasses sales data from April, May and June. Future reports will show the slackening sales demand in July.
Los Angeles Times
SEC says it won’t charge Moody’s
WASHINGTON – The Securities and Exchange Commission has declined to seek fraud charges against Moody’s Investors Services over its ratings of risky investments that led to the financial crisis.
But the SEC said it decided against seeking civil charges only because it determined it lacked authority to charge a foreign affiliate of Moody’s.
Instead, in a report on its investigation, the SEC warned all credit rating agencies that they could face charges if they mislead investors with deceptive ratings.
Investors rely on the statements these agencies make in their applications and reports to the SEC, Robert Khuzami, the SEC enforcement director, said in a statement.
The warning is the latest step by the SEC to address the conduct of major financial firms that contributed to the Wall Street meltdown. Goldman Sachs & Co. agreed in July to pay $550 million to settle civil fraud charges related to its sales of mortgage investments. And Citigroup Inc. agreed to pay $75 million to resolve charges it misled investors about billions of dollars in potential losses from subprime mortgages.
From wire reports
• A federal judge confirmed auto parts supplier Visteon’s reorganization plan Tuesday, clearing the way for the company’s emergence from bankruptcy. Visteon, a major supplier of parts to Ford Motor Co., said that it expects to emerge from Chapter 11 bankruptcy by Oct. 1. The company, based in Van Buren Township, Mich., filed its case in May 2009 as the auto industry was battered by sharply lower sales and the financial crisis. The plan gives bondholders a roughly 95 percent stake in the new company in exchange for buying back $300 million of stock, and raising another $950 million by backing a stock rights offering.
• Electronic Arts is bringing its popular “Madden” football game to Facebook. “Madden NFL Superstars” launches as a free application Tuesday. The game lets players create fantasy teams and compete against other players on Facebook. Electronic Arts Inc. plans to make money from the game by letting players pay nominal amounts of money for better players and other game content. Those microtransactions are expected to add up.
• The Obama administration, under congressional pressure to take a tough stance on Chinese trade policies, determined Tuesday that Beijing unfairly subsidized $514 million in aluminum products last year. The Commerce Department stopped short of making a stronger ruling on claims by U.S. leaders and manufacturers that an undervalued Chinese currency gives Beijing’s exporters a lopsided price advantage. The preliminary finding means that some Chinese aluminum importers must post cash deposits or bonds at a rate set by U.S. officials.
• Harley-Davidson Inc.’s main ad agency for more than three decades has dropped the struggling motorcycle maker in favor of new business. Ad agency Carmichael Lynch, a unit of Interpublic Group, said the Milwaukee-based motorcycle maker has slashed its marketing spending in recent years amid slumping sales.