By Jonathan Stempel

Credit ratings agency Fitch Ratings cut the issuer default rating of Bank of America Corp. and its banking subsidiary due to an expected drag on profitability because of continued deterioration in the credit and consumer lending markets.

Industry data to be released Wednesday will show whether home loan applications fell as mortgage rates ticked up slightly.

Countrywide Home Loans has agreed to pay $325,000 to the Chapter 13 bankruptcy trustee in Pittsburgh, settling a matter that accused the lender of abusive practices in almost 300 mortgage loans overseen by the court.

Corporations should make a greater effort to buy goods and services from black vendors, the National Association for the Advancement of Colored People said in a report Tuesday.

By Jonathan Stempel

Shares of several major banks recouped part of the previous day's losses Tuesday as Wall Street regained some confidence in the sector.

Wachovia Corp's <WB.N> earnings outlook has dramatically diminished and prospects for shareholders are bleak, said influential Wall Street analyst Meredith Whitney, who downgraded the stock to "underperform."

BANGALORE (Reuters) - Wachovia Corp's <WB.N> earnings outlook has dramatically diminished and prospects for shareholders are bleak, said influential Wall Street analyst Meredith Whitney, who downgraded the stock to "underperform."

The bank executives who promised months ago that the worst of the financial crisis had passed are looking less and less credible to investors. And that could pose a problem as the industry releases what are expected to be dismal second-quarter earnings over the next few weeks.

Diversified financial-services stocks finished a volatile week with declines on Friday as mounting concerns about the country's biggest mortgage financiers, Fannie Mae and Freddie Mac, continued to rattle the market.

The Dow Jones industrial average fell more than 200 points Friday and slid below the 11,000 mark for the first time in two years as the price of oil rose and trouble continued at mortgage companies Fannie Mae and Freddie Mac.

Diversified financial-services stocks dropped Friday morning as speculation about a government bailout of Fannie Mae and Freddie Mac escalated, driving shares of those mortgage companies down more than 40 percent.

A mortgage rescue to help hundreds of thousands of struggling homeowners avoid foreclosure and get more affordable, safer loans passed the Senate overwhelmingly Friday, but it faces a bumpy road amid continuing turmoil in the housing market.

Treasury Secretary Henry Paulson sought to calm nervous investors about the financial state of Fannie Mae and Freddie Mac Friday after news reports of a government bailout.