- - Wednesday, July 27, 2011

GOLD

Price drops amid risk aversion

NEW YORK — Gold fell Wednesday after hitting record highs near $1,630 an ounce, as a broad sell-off of riskier assets prompted bullion investors to take profits amid mounting fears of a U.S. debt default.

Gold initially benefited on news a vote on a deficit reduction plan offered by House Speaker John A. Boehner was pushed back to Thursday from Wednesday amid stiff opposition by his fellow Republicans and Democrats.

Trading volume just part way through the session was the highest since May and was on track to be one of the heaviest trading days of the year as investors focused on the gold market as a safe haven on looming risks of a U.S. default.

COURTS

Fannie/Freddie regulator sues UBS for mortgage losses

NEW YORK — The regulator for Fannie Mae and Freddie Mac sued UBS AG, accusing the Swiss bank of misleading the housing agencies into buying risky mortgage debt, resulting in more than $900 million of losses.

The lawsuit by the U.S. Federal Housing Finance Agency is the latest effort by Washington to prop up the government-sponsored enterprises (GSEs), whose September 2008 federal seizure has so far cost taxpayers more than $135 billion.

The regulator said Wednesday that more lawsuits are planned to recover losses by Fannie Mae and Freddie Mac in private-label debt.

The GSEs in 2010 guaranteed 70 percent of single-family mortgage-backed securities issued, and provided $1.03 trillion of market liquidity that year, an FHFA report issued to Congress in June shows.

MICHIGAN

Whole Foods to open store within city

DETROIT — Whole Foods Market Inc. plans to open its first store in Detroit, which would make it the only national grocery chain operating in the city limits.

The 20,000-square-foot supermarket in the Midtown neighborhood, slated to open in 2013, will employ about 75 people, Whole Foods executive operations coordinator Red Elk Banks told the Associated Press.

Detroit has struggled to replace retailers who have steadily left the city over the past three decades, and residents have complained for years about the few options available for fresh fruit, vegetables and produce. Many say they must drive outside Detroit for quality groceries.

Whole Foods and city officials began discussions in 2007 to bring a store to Detroit. Talks regarding the Midtown site got under way last year, store officials said.

RECALL

Poultry maker expands chicken recall to nuggets

GREELEY, Colo. — A voluntary recall of thousands of pounds of ready-to-eat chicken was expanded over concerns that the meat could be contaminated with bacteria that can cause food poisoning.

Colorado-based Pilgrim’s Pride said Tuesday the recall now includes about 7,000 pounds of Pilgrim’s Pride Brand Fully Cooked Chicken Breast Nuggets that were shipped to 57 Dollar General Market stores in West Virginia, Tennessee, Virginia, Ohio, Kentucky, Indiana, Georgia, Florida and Alabama.

Dollar General spokeswoman Tawn Earnest said smaller stores in the chain aren’t affected.

The recall began last week over fears that more than five tons of ready-to-eat chicken was potentially tainted by Listeria monocytogenes.

The Centers for Disease Control and Prevention classifies listeriosis as a serious infection that primarily affects older adults, pregnant women, newborns and adults with weakened immune systems.

Pilgrim’s Pride spokesman Gary Rhodes said Wednesday that he wasn’t aware of any illnesses related to the recall.

GREECE

Country suffers new credit downgrade

ATHENS — Standard and Poor’s on Wednesday relegated Greek government bonds to the deeper end of junk status, cutting the debt-crippled country’s credit rating by 2 notches to “CC,” with a negative outlook.

The international ratings agency said a proposed restructuring of Greece’s heavy debt load under a second international bailout deal worth $157 billion would amount to a selective default. Both of the other major ratings agencies have said much the same.

A Standard and Poor’s statement also said the possibility of a future Greek default is likely to remain high.

Under the debt relief deal struck in Brussels last week, banks and other private investors will contribute some $72 billion to the rescue package until 2014 by swapping Greek bonds that they hold for new ones with lower interest rates or slightly lower face value

From wire dispatches and staff reports