Today's Headlines

Bloomberg:
- The cost of protecting US corporate bonds from default fell after a government report showed the economy lost fewer jobs in July than economists had projected. Credit-default swaps on the Markit CDX North America Investment Grade Index fell .75 basis point to 133.75 basis points as of 8:35 am in NY.
- Copper and aluminum fell in London on indications that demand growth in China, the world's largest consumer of all industrial metals, may slow after manufacturing contracted for the first time since a survey began in 2005. ``For years the Chinese have tried to slow down the economic growth to avoid a bubble and that's probably taking effect now,'' said Andrew Silver, a trader at Natixis Commodity Markets in London. ``Once the slowdown takes hold, we will see impacts on consumption,'' he said today by phone from London. Copper inventories expanded 2,250 tons, or 1.6 percent, to 144,650 tons, the highest since Feb. 28, according to the exchange's daily data.
- The US dollar rose to a one-month high against the euro as a government report showed employers in the U.S. eliminated fewer jobs last month than analysts forecast. The euro weakened as German retail sales dropped in June more than twice as much as forecast, undermining the case for the European Central Bank to boost interest rates again this year. The pound headed for its biggest weekly drop since mid- June as U.K. manufacturing shrank by the most in a decade.
- Corn and soybeans fell for a second straight day on speculation that rainfall next week will ease the stress of hot weather and improve crop conditions in the U.S., the world's largest producer and exporters. Corn futures for December delivery fell 14.5 cents, or 2.4 percent, to $5.93 a bushel at 10:53 a.m. on the Chicago Board of Trade, the second straight drop. A close at that price would leave corn down 0.5 percent for the week, the fifth straight decline. Most-active futures fell 20 percent in July, the most in 22 years, and are down 25 percent from a record $7.9925 on June 27.
- Crude oil was little changed after falling more than $2 a barrel, capping the biggest one-month decline since December 2004, as a slowing U.S. economy caused fuel consumption to weaken to the lowest in three years. ``With demand so poor, we have to re-examine price expectations. The market will be guided by the economic outlook here, in Europe and in the emerging markets.'' Pump prices are following changes in futures. Regular gasoline, averaged nationwide, fell 1.7 cents to $3.909 a gallon, AAA, the nation's largest motorist organization, said on its Web site yesterday. Pump prices reached a record $4.114 a gallon on July 17. ``We found a slowdown in same-store diesel of 4 to 4.5 percent across the board,'' Marathon Oil Corp. refining chief Gary Heminger said on a conference call yesterday with analysts. One reason is that truckers are driving at lower speeds, ``which has really taken an improvement of about 4 percent in their miles per gallon, which has dropped demand.'' Marathon is the U.S. Midwest's largest refiner.
- Iran is driving toward a ``major breakthrough'' in its nuclear development effort that poses an ``unacceptable'' danger, Israeli Deputy Prime Minister Shaul Mofaz told a Washington audience today.
- Ford Motor Co.(F) and Toyota Motor Corp.'s July U.S. sales declined as record gasoline prices damped demand for trucks and a slowing economy kept consumers away from dealer lots.
- Ambac Financial Group Inc.(ABK), the bond insurer that lost its AAA credit rating this year, will pay Citigroup Inc.(C) $850 million to extricate itself from a guarantee of a $1.4 billion collateralized debt obligation. Ambac rose as much as 60 percent in New York trading after the company said it will record a gain of $150 million on the contract because it had previously written down its value by $1 billion.

NY Times:
- Deutsche Bank AG Chairman Josef Ackermann believes the turmoil in the world financial system will be over “within a few months.”

Washington Post:
- Bank officials named in an unfolding Senate investigation have directed more than $2 million into this year's congressional and presidential campaigns, some of it arriving just as investigators finished a report accusing the bank of helping clients hide billions of taxable dollars from the Internal Revenue Service. At the heart of the probe is UBS of Switzerland, one of the world's largest banks, which in June alone distributed $98,000 to members of Congress through its political action committee.

Newsday.com:
- Sen. Hillary Rodham Clinton (D-N.Y.) will not be Barack Obama's running mate, but she will be the keynote speaker at the Democratic National Convention - at least that is what some of her boosters are saying. "Because of your work, Senator Obama asked Hillary to be his keynote speaker at the Democratic National Convention!" said Vote Both founders Adam Parkhomenko and Sam Arora on their Web site. "Regretfully, this means that Senator Hillary Clinton is no longer under consideration as Senator Obama's running mate." Asked how he knows, Arora told The Associated Press, "All indications we have from people close to Senator Clinton and Senator Obama are that Hillary is not on the short list."

New York Post:
- In a move similar to what Merrill Lynch(MER) has done, Lehman Brothers'(LEH) CEO Dick Fuld is trying to shop tens of billions of dollars in mortgage securities on its balance sheet in order to reduce leverage at the embattled investment bank, The Post has learned. Lehman is engaged in talks with prospective buyers about offloading some $30 billion in commercial mortgage assets and other hard-to-value securities that have dogged its balance sheet for months and ultimately resulted in the demotion of Chief Financial Officer Erin Callan and President Joseph Gregory.

greentechmedia:
- New Energy Finance says the number of specialist hedge funds focused on clean energy and the environment is growing, as is the number of funds that invest in other cleantech funds.

USA Today:
- AT&T Inc.’s(T) exclusive distribution of Apple Inc.’s(AAPL) iPhone 3G was extended a year to 2010 in exchange for the wireless company helping subsidize the cost of phone. AT&T pays Apple $300 per phone to keep the iPhone’s retail cost at $199 so consumers can afford it.

International Herald Tribune:
- As the first anniversary of the August 2007 subprime mortgage meltdown approaches, and world markets still reel, you would think that the people who have received much of the blame - the math wizards, computer geeks and other quantitative analysts collectively known as financial engineers - would be in disgrace. Yet by all evidence, the field of financial engineering is thriving - and, in fact, growing. Far from disowning financial engineers, or quants as they are also known, financial institutions - and their regulators - are embracing them as partners in an increasingly complicated game that, it seems, only the very brainy can understand well enough to play safely.

Business Timesonline:
- Investors almost halved the money they put into Asia-focused hedge funds in the second quarter compared to the first three months of the year as a selloff in stocks hurt appetite for risky assets, data showed. Asia-focused hedge funds received a net US$530 million from investors in the April-June quarter, down from US$1 billion in the first quarter, Chicago-based Hedge Fund Research said in a statement released late on Thursday.