April home sales break records

Washington

Existing homes were sold in April at the fastest pace in history as the nation’s red-hot housing market just kept getting hotter.

The National Association of Realtors reported Tuesday that existing single-family homes and condominiums were sold at a seasonally adjusted rate of 7.18 million units last month, a gain of 4.5 percent from a revised March sales pace of 6.87 million units.

The strength in sales, which was attributed to further declines in mortgage rates, put new upward pressure on prices. The median cost rose to a record $206,000, up 15.1 percent over a year ago.

That represented the biggest 12-month gain in prices since November 1980 and added to concerns that the housing industry could be experiencing a speculative bubble similar to the stock market bubble that popped in the spring of 2000.

The jump in home prices raised worries in financial markets that the Federal Reserve might be compelled to boost interest rates at a more aggressive clip.

However, some of those concerns were eased later in the day with release of the minutes of the Fed’s last interest-rate setting discussion on May 3. Those minutes showed that while Fed officials were worried about what high oil prices might do in terms of sparking broader inflation pressures, in the end they decided there was no need to raise rates more aggressively.

Mountain West purchases Zions branch

Mountain West Bank has completed the purchase of the Zions Bank branch in Bonners Ferry, bank officials announced today.

The new branch gives Mountain West a total of 17 offices, in Idaho, Washington and Utah, and assets of nearly $700 million. The bank will retain the six Zions employees who worked at the branch.

Mountain West is a wholly owned subsidiary of Glacier Bancorp, a publicly traded holding company based in Kalispell, Mont.

West Side drivers complain about tainted fuel

Seattle

Drivers in Western Washington are complaining that their cars are stalling and stuttering because of tainted gasoline from a Ferndale refinery.

ConocoPhillips officials said a batch of gas was contaminated with a chemical compound that clogs fuel injectors. It was then distributed to gas stations operating under the name 76 in as many as 14 counties in Western Washington.

ConocoPhillips spokeswoman Lara Dilley said none of the contaminated gas was distributed in Eastern Washington. “All of the gasoline in the Spokane area is serviced from the Billings refinery, and we have not had any problems with that refinery,” she said.

It was unclear how the compound got into the gas.

The company has promised to pay for repairs on vehicles with fuel injectors clogged by bad gasoline if they are taken to authorized dealerships. It also said that gasoline now for sale at service stations is not contaminated.

Union rejects labor agreement at Boeing plant

Kansas City, Mo.

Members of the largest union at Boeing Co.’s commercial aircraft division in Wichita on Tuesday turned down a labor agreement that Onex Corp. said was vital in its plan to buy the plant.

Members of the International Association of Machinists and Aerospace Workers rejected the proposal by 57 percent, said Lodge 70 President Steve Rooney. The union declined to say how many of its 5,300 members at the plant voted Tuesday.

“The membership has spoken,” Rooney said. “The next step is Onex’s.”

A spokesman for Onex didn’t return phone calls for comment. However, the company previously had said it would walk away from the deal if the union rejected the agreement.

Union members had been critical of the proposal, which required a 10 percent pay cut and other concessions.

Members were also angry after Onex sent notices to 800 employees at the plant over the weekend, notifying them that they would not be rehired and telling them not to come into work on Monday. Union officials said they didn’t know how many of those 800 workers belonged to the union.

Ladies’ Home Journal owner buys 4 magazines

Des Moines, Iowa

Meredith Corp., a major publisher of women’s magazines including Ladies’ Home Journal, is buying four magazines, including Child and Family Circle, from the German publisher Gruner + Jahr AG & Co. for $350 million.

The deal, which also includes the magazines Fitness and Parents, effectively marks the exit from the U.S. magazine market for Gruner + Jahr.

For Meredith, the deal beefs up the company’s already large presence in the women’s magazine field, especially with younger women, building on its 2002 acquisition of American Baby and its related publications.

Merrill Lynch analyst Karl Choi said in a note to investors that the deal would make Meredith a “powerhouse” in the women’s magazine field. Meredith also owns big women’s magazine titles including Better Homes and Gardens, Midwest Living and Traditional Home.

GM credit rating falls to junk status

New York

Fitch Ratings reduced its credit rating for General Motors Corp. to junk status Tuesday, citing sales declines and industry price competition.

GM shares and bonds fell on the news, which means the company will likely have to pay more to borrow and complicate its attempt to cut costs.

“Clearly GM has many challenges in North America, but the company is moving aggressively to address the challenges,” GM spokeswoman Gina Proia said. GM and its finance arm, General Motors Acceptance Corp., “have adequate cash and liquidity to fund their business for the foreseeable future,” she said.