Economy Briefs

CREDIT RATING

Moody’s to review bonds of five states

Moody’s Investors Service says it likely will lower the credit ratings of five states should it downgrade the U.S. government’s credit rating.

The credit rating agency said Tuesday that it has placed on review the triple-A bond ratings of Maryland, New Mexico, South Carolina, Tennessee and Virginia.

Last week, Moody’s placed the U.S. government’s credit rating under review, citing a small but rising risk that the government would default on its debt as Congress and the White House wrestle over raising the nation’s $14.3 trillion borrowing limit.

The firm’s review of the five states affects about $24 billion in obligations and related debt, combined.

INVESTMENT

Fears about debt send gold price to record

NEW YORK — Gold’s reputation as a safe place to put money sent the commodity above $1,600 an ounce for the first time.

Investors are worried about debt problems on both sides of the Atlantic, so they bid gold up $12.30 an ounce Monday to settle at $1,602.40. That is a record for the market price for gold, but below its 1980 peak after adjusting for inflation. An ounce of gold at that time cost $850, or about $2,400 in today’s dollars.

Gold is looking better by the day because debt problems in the U.S. and Europe are making two other so-called safe havens, the dollar and the euro, seem shaky. The U.S. could default on its debt on Aug. 2 if Congress and the White House don’t agree to raise the country’s borrowing limit. In Europe, investors worry that Greece may default. Countries including Italy, Spain and Ireland also are struggling to pay their bills. Defaults could mean losses for the banks that own bonds issued by those countries, and that could trigger widespread disruption in financial markets.

Some expect gold to rise to $1,800 by the end of 2012.

REAL ESTATE

Home building jumps after dismal spring

Builders broke ground on more single-family homes and apartments in June, helping the battered construction industry gain a little life after a dismal spring.

The Commerce Department said Tuesday that builders began work on a seasonally adjusted 629,000 homes last month, a 14.6 percent increase from May.

Still, that is roughly half the 1.2 million homes per year that economists say must be built to sustain a healthy housing market.

Much of the increase in June came from a surge in apartment construction, a volatile part of the industry. That sector jumped more than 30 percent last month.

AIRFARES

Southwest, AirTran put fall travel on sale

DALLAS — Southwest Airlines Co. and its AirTran subsidiary launched sales on Tuesday for travel during late summer and the typically slower fall season.

The sales were announced as an attempted fare increase led by United and Continental collapsed.

The Southwest and AirTran deals are being offered through Aug. 1, although seats are limited and not available on all flights.

The AirTran sale covers flights between July 30 and Nov. 16 for most cities, with the lowest prices on Tuesdays and Wednesdays.

Southwest’s sale also starts at $59 each way for some short trips and covers travel from Aug. 23 to Dec. 14 except Fridays and Sundays.

From wire dispatches and staff reports