Money News with Sean Craig: Europe’s latest bump in the road

Italian Prime Minister Mario Monti (C) has stated that European leaders must balance austerity with growth policies in order to stem the Euro region's debt crisis. (Photo by Spencer Platt/Getty Images)

Just as the U.S. recovery seems to be making a dent, the European Union takes another hit.

Sean Craig with First Midwest Securities in Bloomington says Moody’s rating agency has warned five major U.S. banks and more than a dozen global firms of a possible credit downgrading due to Europe’s lingering debt crisis. The ratings service says Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase and Morgan Stanley are all being affected by the financial turmoil.

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Here is the latest from the Associated Press:

FRANKFURT, Germany — The European Central Bank made no purchases of government bonds last week as it put on hold, at least for now, its controversial program to lower borrowing costs for indebted countries.

The purchases had already dwindled to a negligible euro59 million ($78 million) the week before that. The bank has been buying bonds in the markets in an effort to push down borrowing costs, particularly for Italy and Spain, which are under pressure from the eurozone debt crisis. But it has reined in its purchases as a new program of large-scale cheap credit for banks has helped reduce strains in the financial system.