Business Highlights

WASHINGTON — Sales of new homes rose in May to the fastest pace this year, led by big gains in the South.

The Commerce Department reported Monday that sales of new single-family homes increased by 4.6 percent last month to a seasonally adjusted annual rate of 1.234 million units. Wall Street had been expecting a 4 percent drop in sales.

Analysts cautioned against reading too much into the gain, saying the strength in new home sales over the past three months has been heavily related to better-than-normal weather. The median price of a new home did drop to $235,000 in May, down 4.3 percent from the April sales price. The May level was up 3.1 percent from a median price of $229,200 in May 2005.

Ellison pulls plug on $115 million Harvard donation

SAN FRANCISCO — Oracle Corp. CEO Larry Ellison has decided not to give Harvard University a planned gift of $115 million, a company spokesman said Tuesday.

Ellison canceled the gift because Lawrence H. Summers stepped down as Harvard’s president this month after a stormy tenure at the university, Oracle spokesman Bob Wynne said. Summers announced his resignation in February, after being embroiled in controversy throughout 2005. Wynne said Ellison began to reconsider his donation when it appeared that Summers would step down.

"It was really Larry Summers’ brainchild and once it looked like Larry Summers was leaving, Larry Ellison reconsidered,” Wynne said. "It was Larry Ellison and Larry Summers that had initially come up with this notion.”

Ellison’s promise to Harvard last year created a sensation throughout the philanthropic community because it would have been the school’s largest single contribution.

Tribune buys back 45 million shares under contested plan

CHICAGO — Tribune Co. said Tuesday that its stock tender offer had been carried out successfully despite public opposition from the Chandler family, now its largest individual shareholder. Its shares jumped sharply. The media company said a preliminary count showed that about 15 percent of its outstanding shares were tendered under the four-week buyback offer which expired Monday night. It said it expects to acquire all 45 million of those common shares at $32.50 apiece, which is about a 5 percent premium to Monday’s closing price.

Briefly ...
GM announces return of zero percent financing: General Motors Corp. said Tuesday that for a short time it will offer zero percent financing for up to six years on many of its cars and trucks as it tries to clear inventory off lots in preparation for the new model year.<