Today's Headlines

Bloomberg:

- U.S. home prices had the smallest annual drop in 10 months, signaling the free fall of property values is abating in the three-year housing slump at the center of a global recession. Prices declined 5.6 percent in May from a year earlier and rose 0.9 from April, the Federal Housing Finance Agency in Washington said today. Economists expected a 0.2 percent drop for the month, according to the median of 16 estimates in a Bloomberg survey. “We saw a rebound of home prices in some parts of the country in part because the share of distressed sales dipped,” said Thomas Lawler, a former Fannie Mae economist who’s an independent consultant in Leesburg, Virginia.

- The Treasury Department would get final authority over the $592 trillion over-the-counter derivatives market under legislation that a group of House Democrats plans to introduce. The Derivatives Trading Accountability and Disclosure Act would create an Office of Derivative Supervision within the U.S. Treasury, with the power to set rules for traders, according to a copy of the bill. The New Democrat Coalition, a group of 69 lawmakers that describes itself as moderate and pro-growth, is pushing the legislation.

- Farmers are right to be concerned that proposed legislation aimed at reversing climate change may raise their costs and make U.S. exports less competitive, Senate Agriculture Committee Chairman Tom Harkin said. “With good reason, we hear a lot of concern expressed about projected costs to consumers, farmers, ranchers and other businesses from proposed energy and global-warming legislation,” Harkin, an Iowa Democrat, said today at a hearing in Washington on the role of agriculture in climate legislation. The Farm Bureau’s president, Robert Stallman, called quick action on a bill the “height of folly” and said it will cut farm income by $5 billion a year.

- Corn fell to a seven-month low as cool, wet weather boosts yields in the U.S., the world’s biggest producer and exporter. Parts of the Midwest will get as much as 2.6 inches (6.6 centimeters) of rain in the next five days, ending two weeks of below-normal moisture, the National Weather Service said. Temperatures may average as much as 4 degrees Fahrenheit below normal through July 29, the service forecast. Crop conditions are the best in five years, the government said.

- Vietnam’s dong slumped to a record low on speculation some companies are holding onto the U.S. currency because of concern inflation will quicken. “It’s a very worrying situation when people are turning their back on the dong and trying to keep their money in other assets,” said Phan Thi Chinh, Hanoi-based deputy chief executive officer of Bank for Investment & Development of Vietnam, the second-biggest lender. “It will get worse unless the central bank takes some very strong measures.”

- Mortgage bonds guaranteed by US agency Ginnie Mae will probably swell to $1 trillion by the end of 2010 because borrowers with low down payments or credit scores can only qualify for government-insured loans, Bank of America Corp. analysts said. The Federal Housing Administration, which insures loans with down payments as low as 3.5% and has no credit-score requirements, is “the only source of funding for these leveraged borrowers,” Ankur Mehta and Ohmsatya Ravi, the NY-based analysts, wrote. Debt explicitly backed by the US through Ginnie Mae, formally known as the Government National Mortgage Association, climbed to $680 billion as of June 30 from $360 billion two years earlier.

- Crude oil fell for the first time in six days after a U.S. government report showed a smaller-than- forecast decline in inventories. Inventories along the Gulf Coast, home to the bulk of U.S. crude processors, rose 1.63 million barrels to 180.9 million, the first gain in seven weeks. Gasoline supplies climbed 813,000 barrels to 215.4 million last week, the sixth-straight gain, according to the report. Stockpiles of distillate fuel rose 1.22 million barrels to 160.5 million, the highest since January 1985.

- The S&P 500 may rally as much as 9% by August after the benchmark measure for US equities closed above 950 yesterday, according to technical analysts at UBS AG. “It’s just a matter of time before we see a new high,” Zurich-based Michael Riesner and Marc Muller wrote.

- The Federal Reserve is “embroiled” in politics and has “stretched beyond reason” its authority to make loans, said William Poole, who served as president of the St. Louis Fed from 1998 to 2008. “ I don’t think independent can mean the Fed can do whatever it wants under any circumstance,” Poole, a senior economic adviser to Palo Alto, California-based Merk Investments LLC, said in an interview today on Bloomberg Radio. “The Fed has chosen to make loans to certain firms and not others.”

- Federal Reserve Chairman Ben S. Bernanke deserves a second term because of his actions to stabilize the economy over the past year, said Democratic Senator Jack Reed, a Banking Committee member.

- Onyx Pharmaceuticals Inc.(ONXX) rose the most in more than two years after a study showed its only product Nexavar, a liver cancer drug developed by the company and Bayer AG, showed promise in fighting breast tumors. Onyx rose $7.02, or 24 percent, to $35.71 at 1:04 p.m. New York time in Nasdaq Stock Market composite trading.

- Goldman Sachs Group Inc.(GS) agreed to the U.S. Treasury’s request for $1.1 billion to redeem warrants the government received when it invested in the firm, which reported record second-quarter profit last week.

Wall Street Journal:

- House Speaker Nancy Pelosi said Wednesday that she expects the House will vote on health-care legislation next week, despite continued dissension among conservative Democrats on the measure.

- Bankrate Inc.(RATE) agreed to be taken private by private-equity firm Apax Partners for $571 million, while the company also projected second-quarter and 2009 results below analysts' expectations.

MarketWatch:
- Home-builder shares rallied early Wednesday after NVR Inc.(NVR) said its second-quarter profit fell from the year-ago period but handily topped Wall Street's consensus expectations. The iShares Dow Jones U.S. Home Construction Index Fund(ITB) , a sector exchange-traded fund, was up 3%.

- Key technical resistance levels seem to be falling one after the other, cementing investors' expectations that the market is in bullish mode, even as the summer doldrums keep enthusiasm for fresh buying on hold, analysts said. "We've already taken out some key resistance levels" that have paved the way for the S&P 500 to new highs for the year, said Peter Cardillo, market economist at Avalon Partners.

- Mortgage applications rose a seasonally adjusted 2.8% last week from the prior week, overcoming higher interest rates charged on fixed-rate home loans, according to the Mortgage Bankers Association's survey released Wednesday.

The Detroit News:

- The House overwhelmingly approved a $150 million program to research natural-gas powered vehicles. By a vote of 393-35, the House passed the bill that authorizes the Energy Department to conduct a five-year program of natural gas vehicle research, development and demonstration, authorizing $30 million annually starting in the 2010 budget year.

Detroit Free Press:

- Delphi Corp. could dump its pension for U.S. hourly workers on the federal government, the Troy-based supplier, saying it must shed its pension obligations to emerge from bankruptcy, said late Tuesday.

LA Times:

- Rental car companies, once reliable customers of the Big Three, are buying more imports than domestic models.

SeekingAlpha:

- Why Leveraged and Derivatives-Based ETFs Are Dangerous.

Forbes:

- Iraq's oil minister has met representatives of a British Petroleum-led consortium to discuss plans to develop a prized southern oil field. BP(BP) and Chinese consortium partner CNPC walked away from an international oil auction on June 30 with development rights for the 17.8 billion barrel Rumaila field. Their win came after they agreed to take less money for the oil then they had first asked for. According to the ministry, the field's development plan should be submitted in July and the final contract should be signed in August. Last month's auction was Iraq's first international oil licensing round in over three decades.

- The Michigan Democratic Party is considering asking voters to raise the state's minimum wage to $10 an hour. The minimum wage currently is $7.40 an hour.

Rassmussen:

- The health care reform legislation working its way through Congress has lost support over the past month. The latest Rasmussen Reports national telephone survey shows that 44% of U.S. voters are at least somewhat in favor of the reform effort while 53% are at least somewhat opposed. Today’s 44% level of support is down from 46% two weeks ago, and 50% in late June. Opposition has grown from 45% in late June to 49% two weeks ago and 53% today.

- The Rasmussen Reports daily Presidential Tracking Poll for Wednesday shows that 29% of the nation's voters now Strongly Approve of the way that Barack Obama is performing his role as President. Thirty-five percent (35%) Strongly Disapprove giving Obama a Presidential Approval Index rating of -6 (see trends).

Politico:

- A coalition of anti-abortion groups is set to open a new front against Democrats’ efforts to restructure American health care, claiming the plans open a back door to publicly financed abortions. The groups, which are launching a broad campaign on the issue this week, claim that existing health care proposals constitute a stealth “abortion mandate” that will spend taxpayer money on abortions and require insurance companies to cover abortions.

EETimes:

- Despite ongoing supply bottlenecks, vendors for large LCD panels still sell below manufacturers costs, reckons iSuppli. However, the market researcher expects an impressive recovery during the second half of the current year. The market for LCD panels with a diagonal dimension of 25cm and more has shrunk over nine consecutive months. In the second quarter, the trend reversed: Sales climbed 41.4 percent over the first quarter. Already during the first quarter, low inventories and significantly reduced production rates caused tight support.

SiliconValleyBusinessJournal:

- Reports on Tuesday indicated that Apple Inc.(AAPL) and Verizon Wireless(VZ) may team up on a non-cellphone device - perhaps the tablet that the computer company has been rumored to be developing. TheStreet.com reported that Verizon would subsidize the cost of Apple's version of the stripped-down computers that other companies have been offering for around $300. Meanwhile, UBS Securities analyst Maynard Um suggested in a note on Tuesday that Apple and Verizon could introduce a non-cellphone device this year.

Reuters:
- Federal Reserve Chairman Ben Bernanke on Wednesday fought hard to protect the independence of the U.S. central bank and keep responsibility for consumer protection on financial products in its hands. In a second day of testimony on the Fed's semiannual monetary policy report, Bernanke told the Senate Banking Committee that the U.S. central bank wants to shield monetary policy from political interference, but understands the need to be accountable to taxpayers.

- Three of the world's biggest drugmakers posted better-than-expected quarterly earnings on Wednesday and gave bullish forecasts for the rest of the year, demonstrating the industry's resilience in the weak economy.

- Fortress Investment Group (FIG), which on Sunday named Daniel Mudd as its new chief executive, will pay the former Fannie Mae chief a $1.9 million bonus for the final four-and-a-half months of this year. Mudd, pushed out when the U.S. government nationalized nearly all of Fannie Mae last year, was named CEO to allow Wesley Edens and other top officers to focus more on their hedge fund and private equity investments.

ChinaDaily:

- Controversial Internet filter Green Dam will be included with some PC packages sold in China, despite a decision to delay the software's launch. "The Green Dam porn filter will be included in all PCs participating in our August promotion, which targets students and their parents," said Wu Shaodong, an Acer sales representative in Beijing.