Dec 16 - Summary of business headlines: Fitch says Europe debt solution ''technically and politically beyond reach''; U.S. regulators go after former Fannie, Freddie execs; Zynga shares fall in debut; Wall Street settles little changed, but down for the week. Conway G. Gittens reports.
Ratings agency Fitch is expressing doubt in Europe's ability to come up with a comprehensive solution to a two-year debt crisis, as a result it warned seven countries, including France, their credit ratings could be downgraded. Of AAA-rated France specifically, Fitch said the risk of a much worse than expected economic and fiscal situation "has materially increased." The U.S. Securities and Exchange Commission is going after former top executives at home financing companies Fannie Mae and Freddie Mac. According to civil charges, six former executives mislead investors about exposure to the risky home loans that helped lead to the 2008 financial crisis. An attorney for former Freddie Mac CEO Richard Syron called the lawsuit "without merit." Lawyers for ex-Fannie Mae CEO Daniel Mudd were not immediately available for comment. Consumer inflation was flat in November as Americans paid less for cars and gasoline. Economists say that could give the Federal Reserve room to stimulate the economy in the New Year. In market action - shares of Zynga closed below their $10 offering price. The company raised a billion dollars in its IPO, but some investors are worried Zynga's growth is already slowing. And U.S. listed shares of Research In Motion tumbled 11 percent. Investors did not respond well to RIM's delay of the latest BlackBerry and a weak outlook announced late-Thursday. Looking at the broader market, it was a choppy trading session with Wall Street ending close to opening levels. Blue chips lost 2.7 percent for the week and the Nasdaq lost 3-1/2 percent. Crude dropped 6 percent on the week, closing at more than $93 a barrel. European markets closed with modest losses before that warning from Fitch was announced. Conway Gittens, Reuters