Today's Headlines

Bloomberg:
- The cost of protecting corporate bonds from default fell amid speculation that the Federal Reserve will leave interest rates unchanged today and as declining oil prices helped ease inflation concerns. Credit-default swaps on the Markit CDX North America Investment Grade Index fell 2 basis points to 132 as of 11:02 am in NY.
- Corporate defaults in Europe are unlikely to reach levels triggered in 2001 when Internet-related companies collapsed and terrorists attacked New York, said analysts at S&P. European company defaults climbed to .47% in July from zero in June, according to S&P. The rate would increase to 4.4% if there are defaults at the eight companies that S&P rates B- or lower, and are most likely to be downgraded. That’s less than half the default rate to 10.6% at the nadir of the dot-com collapse in the second quarter of 2002, S&P said.
- Wachovia Corp.(WB), the fourth-biggest U.S. bank, rose as much as 8 percent in New York trading after Chief Executive Officer Robert Steel met with Wall Street analysts yesterday for the first time. Wachovia isn't likely to issue new capital and doesn't anticipate management changes after the chief financial officer and chief risk officer step down, Steel told about 20 analysts at the company's midtown Manhattan office.
- The US dollar touched the highest in more than seven weeks versus the euro on speculation Federal Reserve policy makers will highlight concern that inflation needs to be contained while leaving interest rates unchanged. The U.S. currency also rose against the South African rand, Norwegian krone and Canadian dollar after crude oil fell to the lowest since May. The Australian dollar fell to a four-month low after the central bank signaled it may cut borrowing costs for the first time in almost seven years.
- China, where auto plants are running at about 70 percent of their potential, said vehicle export growth slowed in the first half, stoking concerns about excess capacity in the world's second-largest car market. ``Tight monetary policies are making it difficult for automakers to find capital and that led to the decline in exports,'' Fu said. Concerns about excess capacity and falling prices have caused SAIC Motor Corp., China's largest automaker, to plunge 70 percent this year in Shanghai trading. China's stockpile of unsold vehicles rose about 50 percent in the six months ended June to a four-year high, the National Development and Reform Commission said last month. That helped cause average vehicle prices to fall about 3 percent.
- China, the world's biggest soybean importer, may slow buying of oilseeds and vegetable oil as domestic stockpiles surge amid easing demand. Cooking oil inventories are at capacity. Soybeans on the Chicago Board of Trade plunged to the lowest since May today and palm oil slumped to a nine-month low on prospects for a larger-than-expected U.S. oilseed output this year on improved weather conditions. ``At the moment soybean oil and soybean meal face large inventories and weak demand,'' with many crushers throughout China shutting down, the China National Grain and Oils Information Center said in an e-mailed report today.
- China's home-appliances makers, the world's largest exporters of the products, are cutting purchases of copper as shipments of air conditioners and fridges slow, Jiangxi Copper Co. said. Shares fell the most in four months. Metal consumption may grow less than 10 percent this year in China, slower than 2007, Zhao Mingwang, general manager of rod and wire sales at the nation's second-biggest maker of the metal, said today by phone. Slowing global economic growth and a rising yuan have sapped China exports growth, with shipments gaining at the slowest pace in four months in June. ``Small and medium-sized companies such as air-conditioner makers were seriously hurt by a slump in exports,'' Zhao said in an interview from Jiangxi. China's copper apparent consumption grew only 2 percent in the first half as higher prices prompted consumers to use up stockpiles.
- Corn fell to the lowest price since March and soybeans dropped to a three-month low on speculation that Midwest rains have boosted the yield potential of crops in the U.S., the world's largest producer. ``The crops are improving dramatically,'' said Roy Huckabay, the executive vice president at the Linn Group in Chicago. ``This week's rains are million-dollar-crop makers for soybeans,'' which are beginning to develop pods that will be filled with beans later this month, Huckabay said.
- Crude oil fell to a three-month low as meteorologists forecast Tropical Storm Edouard will miss most offshore production facilities in the U.S. Gulf Coast while approaching Texas.
- Delta Air Lines Inc.(DAL), the third- largest U.S. carrier, said it will add Internet and messaging service on all aircraft used for its main U.S. flights.
- Goldman Sachs Group Inc.(GS), the most profitable U.S. securities firm, had its third-quarter earnings estimate cut 35 percent by Merrill Lynch & Co. because the company may be hurt by results from its commodities and hedge fund businesses. Merrill's Guy Moszkowski trimmed his per-share estimate for New York-based Goldman to $2.80, which would be the lowest since the second quarter of 2005, from $4.28. He also lowered his price target to $205 from $212.
- Syngenta AG, the world's biggest maker of agricultural chemicals, dropped the most since January in Zurich trading after falling crop prices raised concerns about pesticide and fertilizer demand. Syngenta, based in Basel, Switzerland, dropped 5.6 percent, or 16.75 Swiss francs. ``A mix of several factors has caused crop prices to decline, and this directly affects the demand for pesticides and fertilizers,'' said Martin Schreiber, a Zuercher Kantonalbank analyst with an ``overweight'' rating on the stock. Crop protection accounts for about 8 percent of farmers' costs, so when prices fall it hits demand for pesticides.''
- European retail sales dropped by the most in at least 13 years in June as a surge in oil and food costs left consumers with less money to spend on other goods. Sales in the 15-nation euro area fell 3.1 percent from a year earlier, the largest annual decline since the European Union's statistics office in Luxembourg began collecting the data in 1995.
- U.K. factory production unexpectedly shrank for a fourth month in June as record commodity prices sapped economic growth, bringing the British economy closer to a recession. Factory output fell 0.5 percent from May and was 1.3 percent lower than a year earlier, the Office for National Statistics said today in London.

USA Today:
- There's a glimmer of hope in the neon city of Nevada, where home sales are starting to heat up after two dismal years. In fact, sales in Las Vegas have risen over the past six months. Bank-owned foreclosed properties are setting the pace. With prices falling, the homes are grabbing attention. The median home price was $225,000 in June, down from a peak of $315,000 in June 2006. Las Vegas was one of the first areas hit by the subprime mortgage collapse. Many foreigners love to visit the city, and some are eager to take advantage of the lower prices and favorable currency exchange rates. "We're getting a lot more people from Canada and other foreign countries who are able to pick up property that they can afford," Kelley says. Local residents may also help lift the housing market after some new casinos open at the end of the year and in late 2009 and produce jobs, Schwer says. While Las Vegas may have been one of the first cities to suffer from the housing crisis, it now may lead the way out of the slump, he says.

Reuters:
- Venezuelan President Hugo Chavez said on Tuesday "it's good" that oil prices have come down, saying $150 per barrel would be irrational. The leader of OPEC member Venezuela has said several times recently that $100 per barrel is a fair price for oil. Venezuela under the leadership of socialist Chavez has been one of OPEC's most ardent price hawks, consistently seeking higher oil prices even as other OPEC members express worries that high prices reduce global demand.

Interfax:
- Russian weapons exports may exceed $8 billion this year, up from $7.5 billion in 2007, citing Mikhail Dmitriyev, head of the Federal Service of Military-Technical Cooperation. Dmitriyev said the Russian defense industry has 10-15 “regular trading partners,” including China, India, Algeria, Morocco and Venezuela.

Sueddeutsche Zeitung:
- The German economy shrank 1% in the second quarter from the first. Experts forecast the economy would shrink .5% and if the contraction continues in the third quarter Germany will have technically slid into a recession, Sueddeutsche said. The Federal Statistics Office will publish a first estimate of second quarter gross domestic product on Aug. 14. Record oil prices, accelerating inflation and a stronger euro weigh on the economic outlook and may prompt the German government to cut its forecast for full year growth from 1.2%.

Irish Times:
- The decline in commercial property values in Ireland is gathering pace with the latest property index showing that capital values fell by 7.2 per cent in the three months to the end of June. The fall in values has been triggered by a sudden collapse in investor confidence and is more than double the 3.3 per cent decline in values recorded in the first quarter of the year.