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Economy Briefs: Moody’s cuts ratings of 28 Spanish banks

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Moody's Investor Service on Monday cut its credit ratings on 28 Spanish banks, saying the weakening financial condition of Spain's government is making it more difficult for that country to support its lenders.

The banks are also vulnerable to losses from Spain's burst real estate bubble, Moody's said.

The announcement came on the same day that Spain formally asked for help from its European neighbors in cleaning up its stricken banking sector and on the day that Cyprus became the fifth eurozone country to request financial aid for its banks.

The island nation's government said in a terse statement that it required assistance after "negative spillover effects through its financial sector, due to its large exposure in the Greek economy."

NEW YORK

Facebook names 1st woman, COO Sandberg, to board

NEW YORK — Facebook's No. 2 executive, Sheryl Sandberg, has become the first woman on the social-networking company's board of directors.

Ms. Sandberg was lured from Google in 2008 to become Facebook's chief operating officer. Besides being the first woman, she is the first Facebook executive other than founder and CEO Mark Zuckerberg on the board.

There had been calls for the company to add women to its board ahead of its initial public offering of stock in mid-May.

ACQUISITION

Microsoft adds Yammer to technology toolbox

SAN FRANCISCO — Microsoft is paying $1.2 billion to buy Yammer, an Internet startup that has built a social network similar to Facebook for the business world.

The deal was announced Monday, nearly two weeks after word of Microsoft's negotiations with Yammer first leaked in published reports. Yammer provides ways for companies to create private social networks for their employees. It has more than 5 million corporate users.

The acquisition represents Microsoft's latest attempt to adapt to a major shift in the technology industry, one that is fueling demand for more Internet services and social-networking tools. That shift is threatening to weaken Microsoft's position as the world's largest software maker.

HOUSING

New homes sell at fastest pace in 2 years

Americans bought new homes in May at the fastest pace in more than two years. The increase suggests that a modest recovery is continuing in the U.S. housing market despite weaker job growth.

The Commerce Department said Monday that sales of new homes increased 7.6 percent in May from April to a seasonally adjusted annual rate of 369,000 homes. That is the best pace since April 2010, the last month that buyers could qualify for a federal home-buying tax credit.

Even with the gains, the annual sales pace is only about half the 700,000 that economists consider to be healthy.

AVIATION

FAA reversal to restore oxygen in jet restrooms

NEW YORK — Federal aviation officials will order airlines to put oxygen systems back in jet restrooms, reversing a decision last year to remove them because of fears that terrorists could use them to start fires during flights.

The Federal Aviation Administration said Monday that restoring the oxygen systems over the next three years will "eliminate a hazard that could jeopardize flight safety." The FAA used similar language to explain its 2011 order telling airlines to remove the systems.

The rule covers about 5,500 planes and will cost airlines $44.2 million to comply, the FAA estimates.

From wire dispatches and staff reports

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