Moody's, Buffett: Wednesday's Headlines

NEW YORK (TheStreet) -- Here are the top stock market headlines for the morning of Wednesday, June 2, 2010.

Wednesday's Early Headlines

• Moody's, Buffett to Testify on Subprime Errors -- Moody's (MCO) CEO Raymond McDaniel and billionaire investor Warren Buffett, Moody's largest shareholder, will appear Wednesday before the Financial Crisis Inquiry Commission to testify on the ratings agencies' role in the subprime crisis. In prepared testimony, McDaniel said that Moody's inaccurate ratings of mortgage-related investments were "deeply disappointing" but investors shouldn't rely on ratings to buy or sell securities, according to a report by the Associated Press.
• Germany Cabinet OKs Naked Short-Sale Ban -- Germany's finance minister says the Cabinet has approved legislation that would anchor in law and expand a ban on so-called naked short-selling of stocks and eurozone government debt, the Associated Press reports. It wasn't clear when parliament would consider the plan approved by ministers Wednesday, the report added.
• Prudential PLC Scraps Deal to Buy AIG's Asian Unit -- Prudential PLC (PUK) said Wednesday it is in talks with American International Group (AIG) to terminate the agreement to buy AIG's Asian life insurance unit. Prudential had agreed to buy AIG but resistance from shareholders to the high price -- $35.3 billion -- put the deal in jeopardy. AIG rejected Prudential's revised offer of $30.375 billion on Tuesday.
• Mortgage Purchasing Applications Remain at 13-Year Low -- The Mortgage Bankers Association said its Market Composite Index, a measure of mortgage loan application volume, rose a seasonally adjusted 0.9% last week, as refinancing applications were up 2.4% from the prior. On the other hand, purchasing applications fell 4.1% compared with the previous week, the survey showed, the lowest level in more than 13 years. Michael Fratantoni, MBA's Vice President of Research and Economics, said the three-week trend of increased refinancing activity continued due to historically low mortgage rates, while purchase applications dropped 40% below the level of just four weeks ago. The average 30-year fixed-rate mortgage rate inched higher to 4.83% last week from 4.80% the previous week, the MBA said.
• Greece Unveils Privatizations; Sells Stakes in Rail, Water -- Reuters reports that debt-plagued Greece will sell 49% of state railway OSE, 39% of Hellenic Post and 23% of Thessaloniki Water utility EYATH, while keeping its stakes in telecom company OTE and utilities PPC. Greek ministers also said the country will fully privatize casinos, the report said. "Our objective is to have a state which guarantees public services but at the same time taps the dynamism of Greece's economy," Finance Minister George Papaconstantinou said after a cabinet meeting, Reuters reported.
• Pending Home Sales Data Due at 10 a.m. ET -- The National Association of Realtors is expected to say its pending home sales index rose 4.3% in April after a 5.3% rise in March. April's expected increase is largely due to the U.S. government's first-time homebuyers tax credit, which expired at the end of April.
• Sonic Solutions to Acquire DivX in $323 Million Deal -- Sonic Solutions (SNIC) said it would acquire digital media company DivX (DIVX) for $3.75 in cash and 0.514 a share of Sonic common stock for each share of DivX.

-- Written by Robert Holmes in Boston.

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