Housing Market, Standard & Poor's | featured news

Standard & Poor's Corp. helped cause the financial crisis by misleading investors with falsely high credit ratings on bonds backed by toxic subprime mortgages, federal officials alleged Tuesday in announcing a civil suit against the company.

The Justice Department and state prosecutors plan to file civil charges against Standard & Poor’s Ratings Service, accusing the firm of fraudulently rating mortgage bonds that led to the financial crisis, people briefed on the plan said.

Stocks ticked up after Monday's global selloff, as a measure of home prices fell less than expected. The S&P 500 rose five points, or 0.4%, to 1319 in mid-afternoon trade. The index's consumer discretionary sector advanced 1.3%, on track for its steepest daily climb since June 14.

Federal prosecutors are stepping up their investigation of Standard & Poor's ratings of troubled mortgage securities during the financial crisis, according to former analysts questioned by prosecutors.

U.S. single-family home prices rose in May from April, the first monthly increase in nearly three years, suggesting prices may be stabilizing, according to Standard & Poor's/Case Shiller home price indexes on Tuesday.