Business highlights. Moody's upgrades Cleveland bonds

Moody's Investors Service Inc. this week increased its rating on City of Cleveland bonds one step to Baa from Ba1 -- the first time since the city defaulted on its bonds in 1978 that it has received an investment-grade rating. Baa is Moody's lowest of four investment-grade ratings; ratings below that are considered speculative. Financial institutions are barred by law from investing in speculative securities. The other major bond-rating service, Standard & Poor's Corporation, already had Cleveland's rating at its lowest investment grade of BBB, which it reaffirmed last week.

Petroleum demand in the United States in 1985 will remain about the same as last year, according to the US Department of Energy. The department attributes this stability in demand to continued energy conservation trends and a slowdown in economic growth. The department sees natural gas use as rising to 17.8 trillion cubic feet in 1985; domestic coal consumption increasing by 5 percent, to 838 million tons; and total electric power generation climbing 3 percent.

The figure for total US energy consumption is projected to rise by 2 percent this year, to 75.4 quadrillion Btu.

In the future, corporate boards will be hard pressed to find enough qualified men and women to serve as outside directors, predicts Robert K. Mueller, chairman of the board of Arthur D. Little Inc., the Cambridge-based consulting firm. Mr. Mueller notes that there are some 20 million business enterprises in the United States; more than 3 million are corporations. Some 140,000 new corporations are formed each year. Mueller contends that boards will be smaller and that the trend toward selecting retired top executives as directors will be reversed in favor of candidates with specific business expertise.

Sales of existing single-family homes climbed 4.5 percent in January, reaching their fastest pace since last April, the National Association of Realtors said Thursday. Sales rose to a seasonally adjusted annual rate of 3 million units in January, compared with a December sales pace of 2.87 million units.