Moody’s cuts debt ratings on three of top U.S. banks

Three of the nation’s top 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 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.

The downgrades were widely expected after the ratings agency placed the three banks on review in June. The cuts also stem partly from new laws taking effect under the Dodd-Frank Wall Street Reform Act. The new law ended the possibility of the government bailing out a large financial firm and created a process that would allow a financially troubled bank to fail and liquidate its assets.

Foreclosures driving rise in sales of existing homes

The number of Americans who bought previously occupied homes rose in August. But the sales were driven by an increase in foreclosures, a sign that home prices could fall further next year and slow a housing recovery.

The National Association of Realtors said Wednesday that 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 worst sales level in 13 years.

For 18th year in row, Gates tops richest-Americans list

The nation’s economic woes don’t appear to be hurting Bill Gates, who tops Forbes’ list of the 400 richest Americans for the 18th year in a row.

The magazine said Wednesday that the Microsoft co-founder and philanthropist’s wealth amounts to $59 billion, ranking him ahead of all the other billionaires who make up this year’s list.

Gates’ fortune swelled by $5 billion from a year ago, outpacing the No. 2 on the list, Warren Buffett, whose net worth is $39 billion, Forbes said.

The Berkshire Hathaway Inc. chairman and CEO’s fortune decreased by $6 billion — the largest dollar-amount loss by anyone on the Forbes 400 this year, the magazine said.

Oracle CEO Larry Ellison rounds out the top three richest Americans with a net worth of $33 billion, $6 billion more than last year.

Major stock indexes lose 2 percent to 2.9 percent

The Dow Jones industrial average lost 283.82 points, or 2.5 percent, and closed at 11,124.84. The Standard & Poor’s 500 index fell 35.33, or 2.9 percent, to 1,166.76 The Nasdaq composite fell 52.05, or 2 percent, to 2,538.19.

Benchmark crude gave up $1 to finish at $85.92 per barrel in New York. Brent crude, used to price crude from foreign countries, fell 18 cents to finish at $110.36 in London.

In other energy trading, heating oil dropped 2.74 cents to end at $2.9342 per gallon, while gasoline futures lost 3.49 cents to finish at $2.6665 per gallon. Natural gas fell 6.8 cents to end at $3.73 per 1,000 cubic feet.

General Mills’ net income falls 14 percent in quarter

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. But adjusted results beat Wall Street’s expectations as revenue climbed on increased prices, solid consumer demand and new products.

The Minneapolis-based company that makes Cheerios cereal and Haagen-Dazs ice cream also reaffirmed its full-year adjusted earnings outlook. Its stock gained $1.26, or 3.4 percent, to $38.75. The shares have traded between $34.54 and $40 over the past year.

— From news service reports