Today's Headlines

Bloomberg:
- CNA Financial Corp.(CNA) is buying more securities backed by subprime debts and said it’s made an 8% return on the riskiest home-loan holdings purchased this year. Loews CEO Jim Tisch affirmed in April the insurer’s strategy of looking for mortgage assets after the collapse of the subprime market.
- Start Drilling Now to Lower Oil, Gasoline Prices.
- Russian stocks fell, sending the Micex Index to the lowest since 2006, after Interfax reported Prime Minister Vladimir Putin said OAO Mechel avoided taxes, stoking concern commodity producers not controlled by the government may face increased scrutiny. Mechel, the coal and steelmaker controlled by billionaire Igor Zyuzin, plummeted 34 percent. OAO GMK Norilsk Nickel, the nation's largest mining company, slumped the most in six months. OAO Lukoil, Russia's second-biggest oil company, also declined. The ruble-denominated Micex lost 2.1 percent to 1,456.16, after earlier rallying as much as 1.9 percent. The dollar- denominated RTS Index sank 1.2 percent to 1,928.74, its lowest since February.
- Russia may increase grain output by as much as 16% in the marketing year that started in June because of higher yields and increased planting, WJ Group said. The average yield will probably rise 4% to 4.63 tons a hectare(2.47 acres), according to Petrichenko. The wheat harvest may rise 16% to 57.4 million tons, he said.
- Consumer confidence in Germany, Europe's biggest economy, dropped to the lowest in more than five years as soaring energy prices sapped purchasing power and the economic outlook deteriorated.
- The US dollar should prove to be more reliable. It will be buoyed by improving U.S. trade, receding oil prices, a narrower interest-rate gap between the U.S. and Europe, and the detrimental global effects of a slowing American economy.
- Beijing may bar more cars from its roads and shutter more factories to lift a blanket of smog that continues to envelop the city 11 days before the Olympics begin. The lack of wind and heavy rain over the past two weeks has caused a steady buildup of dust and dirt particles, pushing the air pollution index to twice the maximum level recommended by the World Health Organization for four straight days. An emergency plan may be announced ``soon,'' the English-language daily said, citing Li Xin, an engineer with the environmental protection bureau, who helped draw up the measures. As many as 25 percent of Olympic athletes suffer from asthma, which causes airways to swell and produce mucus, reducing oxygen supplies to straining muscles. The International Olympic Committee has said it will reschedule events next month if athletes' health is at risk.
- Hedge funds may post their worst month in at least five years after bets on financial stocks and crude oil backfired. Hedge Fund Research Inc.'s Global Hedge Fund Index of more than 55 funds slid 3.2 percent through July 24, heading for the biggest monthly drop since the measure started in 2003. Wagers on a decline in financial stocks and homebuilders, one of the most popular, soured after Fannie Mae and Freddie Mac shares more than doubled in the six trading days to July 23. Bullish bets on crude oil turned to a loss as oil slid 15 percent from a record $145.29 a barrel on July 3 after doubling in a year. Short selling of Fannie Mae and Freddie Mac jumped in the first two weeks of July as the stocks fell on concern that shareholders would be wiped out even if the government bailed out the entities. Instead, the shares doubled in six trading days, catching out investors who shorted the stock, selling borrowed shares in anticipation of buying them back at a cheaper price.
- Wachovia Corp.(WB) may sell its mutual funds, the securities brokerage or Northeast and Texas branches as Chief Executive Officer Robert Steel copes with fallout from a record $8.9 billion quarterly loss, according to analysts.
- President George W. Bush said Pakistan has made a ``strong commitment'' to control the terrorist threat from its region bordering Afghanistan, an area of increasing concern to U.S. military officials.
- New lows among US stocks exceeded new highs this month by the widest margin in a decade, and the extreme reading points to rising share prices. Schaeffer’s Investment Research drew this conclusion from a study of its new-lows ratio. The indicator “has reached peak pessimism and has begun to roll over,” Robert Becks, a senior financial market analyst at the Cincinnati-based firm, wrote. Within the past three weeks, the new-lows ratio surpassed 90% and reached its highest level since the second half of 1998, when Russian defaulted on its debt and the Long Term Capital Management LP hedge fund collapsed. “An obvious caveat here is that this indicator generates very few signals,” he wrote. The report cites eight instances since 1990 when the ratio rose above 85%. After each of the first five, the S&P 500 gained more than 10% in the next 12 months. The other three occurred in January, March and July of this year. This month’s reading heralds “an increasingly positive market” when combined with the weekly Investors Intelligence survey of newsletter writers and other barometers of sentiment, Becks wrote.
- Freddie Mac(FRE), the second-largest U.S. mortgage-finance company, sold $2 billion of short-term notes in a weekly auction at lower rates than in a sale last week.

Wall Street Journal:
- The Securities and Exchange Commission is focusing on four rumors that circulated about Wall Street firm Lehman Brothers Holdings Inc.(LEH) in recent weeks, as the commission's investigation into potential market manipulation heats up. In subpoenas recently sent to dozens of hedge funds and others, the SEC asks the investment funds for transcripts of phone calls, messages and payroll documents that mention or include the Federal Reserve's lending facility, Barclays PLC, hedge fund SAC Capital Advisors and bond-fund house Pacific Investment Management Co., or Pimco, according to people familiar with the matter. Beyond the investigation into the trading of Lehman and Bear Stearns shares, the SEC also announced it was conducting "sweep" examinations of hedge funds' and brokerage firms' internal compliance systems to try to tamp down the spreading of rumors.

NY Times:
- In Volatile Times, Investors Tune in All and Any Predictions. The result has been a flood of brash pronouncements, as the Cassandras of the financial set try to outdo themselves with increasingly outlandish predictions. So far, many of these forecasts, whether computer-crunched numbers or seat-of-the-pants guesstimates, have turned out to be wrong. But investors still seem to hang on to Wall Street’s every word.
- Cable television subscribers in NYC will have another company to choose from starting on Monday when Verizon(VZ) begins selling programming, taking on companies like Cablevision and Time Warner Cable.

CNBC.com:
- Iranian President Mahmoud Ahmadinejad told NBC News that Iran isn’t developing nuclear weapons. “We are not working to manufacture a bomb,” NBC’s Brian Williams quoted Ahmadinejad as saying following an interview with the president in Tehran.

Boston Globe:
- In fiscal 2008, according to numbers to be released today by the Massachusetts Bay Transportation Authority, nearly 375 million people took public transportation, 21 million more riders than the state agency had in fiscal 2007, a 6 percent leap and the highest ridership total in the agency's 44-year history.

OCRegister:
- Depression? Not hardly. The current slowdown is still a long way from the recessions of the early 1980s, let alone the 1930s. You hear the word repeatedly. Are we in a depression? If not, are we headed for one? The answer to the first is "no"; and the answer to the second is "almost certainly not." The use of "depression" to describe the economy is a case of rhetorical overkill that speaks volumes about today's widespread pessimism and anxiety. During the depression, U.S. unemployment peaked at 25 percent in 1933. During the harsh recession of 1981-1982, unemployment peaked at 10.8 percent in late 1982. In June of this year, unemployment was 5.5 percent, slightly below the average since 1960 of 5.8 percent. Corporate profits are still running at a near-record annual rate of $1.5 trillion. Output in the first quarter of 2008 was actually 2.5 percent higher than a year earlier.

Business Week:
- Michael Dell Predicts ‘Big Second Half’. Soaring sales overseas, a US retail blitz, and product overhauls are fueling the PC maker’s revival, its founder says.

FINalternatives:
- Hedge fund launches in Europe fell 45% to a six-year low in the first half, according to a new report.

Mediaweek:
- The five largest US broadcast networks drew 1.2 million more viewers each night this summer than a year ago after the writers’ strike hurt ratings in April and May, citing Nielsen Media Research data.

Interfax:
- Russia has about $50 billion of its currency reserves invested in Fannie Mae(FNM) and Freddie Mac(FRE) bonds, citing Alexei Ulyukayev, first deputy central bank chairman. Separately, Ulyukayev said inflation in 2008 may be between 10.5% and 11%.

Valor Economico:
- Archer Daniels Midland Co.(ADM) plans to invest in two Grupo Cabrera ethanol mills in Brazil. The projects are expected to cost $253.5 million each and crush 3 million tons to 4 million tons of sugar cane into ethanol. The first unit is expected to start production in 2010.

Vedomosti:
- Rising jet fuel costs may bankrupt some Russian airlines, citing Yevgeny Bachurin, the head of Russia’s Federal Air Transport Agency. The total number of airlines in the country may be halved, citing VTB Group analyst Elena Sakhnova.

Haaretz:
- Syria envoy to US: Israel has chance for peace with all Arabs.