Home sales fall; Fed freezes rates

Home sales fall; Fed freezes rates

WASHINGTON

Americans showed far less appetite to buy new homes last month after the government stopped offering a homebuyer tax credit. The news signaled a renewed housing slump that threatens the broader economy. Sales of new homes fell in May to their lowest level on record, plunging 33 percent from the month before. The bleak data followed a report earlier this week that sales of existing homes dipped, too.

The Federal Reserve, mindful of the fragility of the housing market, struck a more cautious tone Wednesday in its read on the economy. It said only that the recovery is “proceeding.” The Fed repeated its pledge to hold interest rates at record lows to fuel economic growth.

Subprime car buyers

DETROIT

General Motors Co. is looking to boost auto sales by lining up banks and other financial institutions to make loans and lease deals for buyers with poor credit.

The talks lessen the likelihood of GM’s trying to buy the auto finance business of Ally Financial Inc., its main lender. They also make it less likely that GM would start its own auto financing unit. GM considered both options earlier in the year because Ally was reluctant to fund loan and lease deals to buyers with subprime credit. Subprime buyers are customers with credit scores below 620 on a 300-to-850-point scale.

Viacom rebuffed

SAN FRANCISCO

A federal judge handed Google Inc. a major victory Wednesday by rebuffing media company Viacom Inc.’s attempt to collect more than $1 billion in damages for the alleged copyright abuses of Google’s popular YouTube service. The ruling by U.S. District Judge Louis Stanton in New York embraces Google’s interpretation of a 12-year-old law that shields Internet services from claims of copyright infringement as long as they promptly remove illegal content when notified of a violation.

Associated Press