NATIONAL

JULY EXISTING HOME SALES SLOWED AFTER RATES ROSE

American sales of previously owned homes fell 2.9% in July from a record in June, the first drop in seven months, after mortgage rates rose, a private report showed. Resales declined to 6.72 million single-family houses at an annual rate, the third highest on record after a revised 6.92 million in June and 6.81 million in May, the National Association of Realtors said in Washington. The median sale price was $191,300, up 8.7% from July of last year. Rising mortgage rates in June, when many contracts for July resales were signed, may have deterred some buyers as economic expansion was cooling. The record-setting pace of sales growth set in the first half of 2004 couldn’t be sustained, economists said. “I’ve been looking for these numbers to fade for several months now, because they’ve been so incredibly high,” said the chief economist at Naroff Economic Advisors in Holland, Pa., Joel Naroff. “There’s almost no place to go but down.” Thirty-year mortgage rates averaged 6.29% in June, up from 6.27% in May and 5.91% in April after economic growth accelerated and payrolls surged in March through May.

– Bloomberg News

CALIFORNIA’S CREDIT RATING RAISED THREE LEVELS BY S &P

California, the most-populous American state, had the credit rating on $42.7 billion bonds raised three levels by Standard & Poor’s because of the state’s recovering economy and a bond sale that averted a cash shortage. The rating on California’s $32.8 billion of general obligation bonds was raised to A, the sixth highest of 10 investment grades, from BBB. The change follows a $12 billion bond sale that paid off maturing debt and the passage of a budget last month. “The budget will likely enable the state to avoid substantial further short-term borrowing to fund deficits through at least fiscal 2006,” Standard & Poor’s analyst David Hitchcock said in a statement. Moody’s Investors Service raised California’s credit rating in May, the first increase for the state since 2000. Governor Schwarzenegger in July signed a $105 billion annual budget for the current year that includes $7 billion in bonds, loans and internal transfers and cuts $5 billion in spending to close the state’s budget deficit. Standard & Poor’s also raised $7.3 billion of lease debt to A- from BBB- and $2.6 billion of tobacco bonds.

– Bloomberg News

INTERNATIONAL

BOEING TO GET SINGAPORE ORDER FOR 18 LONG-RANGE 777s

Boeing Co., the world’s second-largest commercial-aircraft maker, is set to win a $3.7 billion order from Singapore Airlines Ltd. for 18 long-range 777s, beating out Airbus SAS, said people familiar with the plan. The agreement will be announced today the sources said. General Electric Co. will supply the engines, in a $540 million order that would be its first from Asia’s most-profitable carrier.

Boeing’s victory in selling the twin-engine 777-300ER is a blow for the rival Airbus model. Singapore Airlines’ fleet already includes 53 777s and only five Airbus A340s. Singapore Airlines is luring more passengers as tourists and business travelers return to the Southeast Asian region after the severe acute respiratory syndrome outbreak emptied flights last year.

Singapore Airlines “obviously expects some pretty heavy traffic,” JSA Research analyst Paul Nisbet said. “They prefer the 777s. It’s probably more efficient on the longer routes.” Mr. Nisbet has a “buy” rating on Boeing’s shares, which he said he doesn’t own.

General Electric, the world’s biggest maker of engines, is the only supplier of engines for the 777-300ER, which with a range of 8,500 nautical miles is Boeing’s longest-range model. The engines list at $15 million each.

The order is a setback for Rolls-Royce Plc, whose engines power most 777 models. Rolls-Royce is the engine supplier for all of the 777s in Singapore Airlines’ current fleet.

– Bloomberg News

BRITISH AIRWAYS STAFF SHORTAGES DISRUPT FLIGHTS

British Airways Plc, Europe’s second-biggest airline, has canceled 80 flights since Monday, disrupting travel for more than 11,000 passengers passing through Heathrow Airport as staff shortages and sickness left check-in desks unmanned.

More than 2,000 travelers were stranded overnight at the airport. British Airways booked 500 people into nearby hotels, while some returned home and the rest slept in the terminals. The airline flies about 100,000 people each day.

British Airways has cut staff and plans to limit pay raises in a bid to reduce labor costs by 300 million pounds ($539.4 million) over the next two years amid competition from discount carriers and rising fuel prices.

“The high oil prices dwarves the staffing issue,” said an analyst at ABN Amro, Andrew Lobbenberg. “They had worse problems with the unofficial strikes last year. And for all the talk about how that would affect the BA brand, it didn’t happen.” Shares of British Airways gained 5.5 pence, or 2.5%, to 224.5 pence, giving the company a market value of 2.43 billion pounds.

The cancellations come after British Airways last week reached a pay accord with unions that included a clause to cut down on unscheduled absences. The agreement averted a strike planned for the U.K. holiday weekend starting Friday.

– Bloomberg News

IN THE COURTS

JAILED FINANCIER ARMSTRONG CHALLENGES DETENTION

Jailed financier Martin Armstrong filed a legal challenge to his more than 4 1 /2 years of detention for civil contempt and asked the court to release him on bail pending a decision. Armstrong, the former head of Princeton Economics International, has been imprisoned since January 2000 for refusing to turn over $15 million in assets, including gold bars, rare coins, and a bust of Julius Caesar.

He also faces criminal fraud charges for allegedly running an elaborate pyramid scheme that bilked Japanese investors out of billions of dollars. His trial is scheduled for March 2005.

Armstrong’s stay in jail for civil contempt is unusually long for a federal case. He has already complained that the detention violates his constitutional rights but has lost previous appeals.

In a statement, his lawyer, Thomas Sjoblom, said the latest filing, in the form of a petition for habeas corpus, comes at the suggestion for the U.S. Court of Appeals for the 2nd Circuit.

Armstrong was originally granted a $5 million bail package in the criminal case. But in January 2000 a federal judge overseeing the Securities and Exchange Commission’s civil fraud case deemed that Armstrong had violated two “turnover” orders and jailed him for contempt.

– Dow Jones Newswires

ADELPHIA ASKS COURT TO MAKE RIGASES REPAY $3.2 BILLION

Adelphia Communications Corp., which is trying to raise money to repay creditors, asked a bankruptcy judge to order founder John Rigas and his sons to hand over $3.2 bil lion the no. 5 American cable operator says they took from the company.

Rigas, 79, and son Timothy, 47, were convicted last month of conspiracy, bank fraud, and securities fraud for looting Adelphia and lying about corporate finances before it filed for bankruptcy protection. A U.S. jury in New York acquitted son Michael Rigas of conspiracy and wire-fraud. Another son, James, wasn’t charged.

The demand for immediate repayment by the Rigases, plus interest, comes just weeks before Adelphia was to begin preparations for asset sales to generate cash to pay back creditors.

“The Rigases, not Adelphia, had the use and enjoyment of over $3.2 billion of Adelphia funds and credit, and the Rigases not Adelphia, used Adelphia’s credit and its bank accounts to purchase assets and operate their own private ventures,” the company said in court papers. “In short, the Rigases have been enriched while Adelphia suffered.”

Adelphia originally sued the Rigases in federal court in 2002, accusing them of driving the company into bankruptcy. The U.S. Bankruptcy Court in New York later assumed jurisdiction over the lawsuit, as Adelphia seeks to reorganize or sell the company. The court will consider the company’s request for repayment in October. Greenwood Village, Colo.-based Adelphia filed for bankruptcy protection in 2002, citing more than $18 billion in debt. About 17,000 claims seeking more than $3 trillion have been filed.

– Bloomberg News