WASHINGTON— Sales of new homes fell sharply for a second consecutive month in February, a weaker-than-expected performance that dimmed hopes for a rebound in the troubled housing market.

The Commerce Department reported Monday that sales of new single-family homes fell by 3.9 percent last month to a seasonally adjusted annual rate of 848,000, the slowest sales pace in nearly seven years. All regions of the country except the West experienced weakness last month.

The February decline followed an even larger 15.8 percent drop in sales in January, which had been the largest one-month plunge in 13 years. The back-to-back declines provided evidence that the housing market is continuing to struggle with lagging demand and a glut of unsold homes.

The weakness in sales pushed the median price of a new home down to $250,000 in February, a drop of 0.3 percent from a year ago. It marked the second straight month that the median price fell compared with the same period a year ago. The median is the point where half the homes sold for more and half for less.

FORMER REAGAN BUDGET DIRECTOR CHARGED IN FRAUD CASE

NEW YORK — David Stockman, the former budget director in the Reagan White House, was charged in an indictment unsealed Monday with overseeing a sweeping fraud at a troubled auto parts supplier that he led before the company collapsed into bankruptcy.

Stockman, 60, was one of four former top Collins & Aikman Corp. executives named in the federal indictment. Four other former company employees including a former treasurer have already pleaded guilty in the case, prosecutors said.

At a news conference, U.S. Attorney Michael Garcia said Stockman and his co-defendants "resorted to lies, tricks and fraud" from 2001 to 2005 to hide the truth about his failing company from investors and creditors.

Garcia said Stockman let the company's employees mislead creditors about the company's revenues and the ability of Collins & Aikman to pay its bills until the company was forced to enter bankruptcy proceedings in May 2005.

The government said Stockman personally decided which of the company's suppliers and creditors would get paid and personally managed all of C&A's liquidity during the crisis.

OIL PRICES SETTLE AT 2007 HIGH

NEW YORK — Oil prices settled Monday at their highest level so far this year on tensions between Iran and the West following Tehran's detention of British naval personnel. Gasoline futures prices climbed above $2 a gallon to their highest level since last September as a new driving season nears.

Vienna's PVM Oil Associates cited the "deteriorating relationship between Iran and the West and last week's further falls in U.S. commercial oil inventories" as driving crude prices upward. Iran is the Organization of Petroleum Exporting Countries' second largest producer.

British Prime Minister Tony Blair on Sunday called the Iranian seizure of the 15 sailors and marines "unjustified and wrong," saying that London saw their situation as "very serious." Iran suggested that the group may be tried for illegally entering Iranian waters.

Oil traders worried that an escalation in the conflict could cut Persian Gulf oil exports.

CITIGROUP MAY CUT 15,000 JOBS

NEW YORK — Citigroup Inc. expects to have completed its corporate cost review by mid-April, company officials said Monday, as published reports suggested the nation's largest bank was considering cutting about 15,000 jobs.

The Wall Street Journal said the job cuts — which would amount to about 5 percent of Citigroup's worldwide work force — were part of the New York-based bank's restructuring plan, which was disclosed late last year and is aimed at improving the bank's financial performance.

Citigroup's chairman and chief executive, Charles Prince, has come under heavy criticism from investors because its expenses have been growing faster than its revenue, reducing profits.

Prince, who currently is on a trip to India, told reporters in New Delhi that he would not comment on the Journal's report.

Earlier, Citigroup spokesman Michael J. Hanretta declined comment on the report, also saying results of the cost-cutting study would be made available "on or before earnings on April 16."

FORMER CFO ACCUSED OF STOCK OPTIONS DATING

ST. LOUIS — The former chief financial officer for the defense contractor Engineered Support Systems Inc. backdated stock options without disclosing his actions, then made false statements in reports to the SEC, the U.S. Attorney's office said Monday.

Gary Gerhardt, 62, of St. Charles, Mo., was charged in a 10-count indictment that includes one count of falsifying books and records of a publicly traded company; one count of conspiracy; four counts of making false statements in reports filed with the U.S. Securities and Exchange Commission; two counts of mail fraud; and two counts of wire fraud.

The indictment alleges that Gerhardt and others illegally backdated stock options on at least eight occasions between 1996 and 2002.

Assistant U.S. Attorney Michael Reap said the practice diluted profits for shareholders and deprived the public of accurate information concerning the company's earnings and compensation for its executives.

Some of the charges carry penalties of up to 20 years in prison if convicted.

NORTHWEST MOVES FORWARD ON BANKRUPTCY EXIT PLAN

NEW YORK — Northwest Airlines can begin seeking creditor approval of a plan to exit bankruptcy that values the company at an estimated $7 billion, a judge ruled Monday.

The decision puts the airline in the last stages of bankruptcy before it can emerge from court protection.

U.S. Bankruptcy Judge Allan Gropper said that once Northwest revises its disclosure statement to incorporate agreements reached Monday, the statement could be released to creditors along with a restructuring plan.

Eagan, Minn.-based Northwest Airlines Corp. wants to cancel all existing shares in the company and issue 272 million new ones, with a stock offering to sell 27.78 million shares at $27 a piece.

Another hearing will be held this week to determine whether an examiner will be appointed to investigate merger discussions that may have taken place with Northwest, Gropper said. A reorganization plan could be mailed to creditors as early as April 6.

CHINA PRAISES INTEL'S FACTORY PLANS

BEIJING — Intel Corp.'s plan to build a chip factory in China is a victory for China's campaign to attract high-tech investment that it hopes will speed development of its own technology industries.

Intel CEO Paul Otellini, announcing the $2.5 billion wafer fabrication plant, pledged support for China's effort to transform itself from a low-cost factory to a creator of technology.

The factory, which Intel acknowledges will not be equipped with its latest technology, will be the Santa Clara, Calif.-based company's first "chip fab" in Asia and its eighth worldwide. It is due to open in 2010 in the northeastern city of Dalian.