Business Highlights

The Associated Press
Monday, March 21, 2011; 6:12 PM

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Home sales fell 9.6 pct. in February

WASHINGTON (AP) - Fewer Americans bought previously occupied homes in February and those who did purchased them at steep discounts. The weak sales and rise in foreclosures pushed home prices down to their lowest level in nearly nine years.

The National Association of Realtors said Monday that sales of previously occupied homes fell last month to a seasonally adjusted annual rate of 4.88 million. That's down 9.6 percent from 5.4 million in January. The pace is far below the 6 million homes a year that economists say represents a healthy market.

Nearly 40 percent of the sales last month were either foreclosures or short sales, when the seller accepts less than they owe on the mortgage.

One-third of all sales were purchased in cash - twice the rate from a year ago. In troubled housing markets such as Las Vegas and Miami, cash deals represent about half of sales.

The median sales price fell 5.2 percent to $156,100, the lowest level since April 2002.


Citi resumes dividend, will do reverse stock split

NEW YORK (AP) - Citigroup Inc., one of the worst-hit banks during the financial crisis, is taking more steps to get back in the good graces of shareholders.

The bank will reinstate a quarterly dividend, albeit just a penny per share, and reduce the amount of shares it has outstanding. This second maneuver, called a "reverse stock split," will lift the company's stock price and allow more institutional investors to own it.

Many large investors like pension funds and mutual funds are barred from owning stocks that trade below $5, which has been the case with Citi since early 2009. Under Citi's plan announced Monday, every 10 shares of its stock will be exchanged for one new share as of May 6. That will lift the price of each share of Citi stock by 10 times. Since there will be 10 times fewer shares outstanding, the overall value of the company will remain the same.

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