GM seen posting profit, analysts remain cautious

(Reuters) - Still, analysts remained cautious about the weakness in the
U.S. housing market, which could weigh on GM's results through
the remainder of the year, and about sustainable profitability
in its North American operations.




Analysts, on average, expect GM to post on Tuesday a
second-quarter net profit of $1.10 a share, compared with a net
loss of $5.98 a share a year earlier. The per-share profit
estimates range from $1.00 to $1.28.


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South Korea Stocks Rebound from Two-Day Rout; Samsung Electronics Advances

(Bloomberg) -- South Korean stocks rose, snapping a
two-day plunge that had wiped out $68 billion in market value.
Samsung Electronics Co. gained after the country's industrial
production increased almost twice as much as expected.

Higher output of chips, autos and mobile phones, which
account for about a third of the nation's exports, accounted for
the gain in production, according to a government report. Concern
that a deepening U.S. housing-market slump would hurt the world's
biggest economy had triggered a $2.1 trillion rout in global
equities last week.


Read more at Bloomberg Stocks News

S.African stocks slide on global jitters

(Reuters) - South African blue-chip stocks fell by more than 1.5 percent on Tuesday as a grim outlook for the U.S. housing market hit global equities and investors booked profits in local financial stocks.

The Johannesburg Top-40 index of blue-chip stocks slid as much as 1.55 percent but recovered slightly to trade 1.34 percent lower at 26,738.73 points by 1422 GMT. The All-share index dropped 1.22 percent to 29,521.29 points.


Read more at Reuters Africa

Chile Peso Falls Most in 2 Months; Lower U.S. Earnings Lift Risk Aversion

(Bloomberg) -- Chile's peso fell the most in two
months as lower-than-expected earnings at U.S. companies reduced
investors' appetite for riskier emerging-market assets.

The currency extended a drop from a 14-month high as U.S.
stock benchmarks declined, signaling investors were pulling away
from riskier bets. Countrywide Financial Corp. and DuPont Co.
said the U.S. housing slump lowered profits. Shares of Texas
Instruments Inc., the world's biggest maker of chips that run
mobile phones, fell the most in almost two years after sales
missed analysts' estimates.


Read more at Bloomberg Currencies News

Potential CDO downgrades climb to $1.4 bln - Fitch

(Reuters) - Investors have been expecting downgrades on CDOs will
follow cuts to the underlying mortgage bonds that have been
mounting at a rapid pace this month. Mortgage bonds were
increasingly favored for yield in CDOs until last year as the
slumping U.S. housing market revealed unsound underwriting
practices and excessive credit.




CDOs are created by taking portions of debt securities and
packaging them into new bonds that are split into several
classes by degree of risk.


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European shares open mixed with M&A in focus

(Reuters) - European shares got off to a mixed start on Monday as merger activity lent some support while investors still worried that problems in the U.S. housing market could spread to the broader economy.

M&A activity came to the fore again after Britain's Barclays


Read more at Reuters Africa

Vranos hedge fund seeks $750 mln for subprime - NY Times

(Reuters) - Subprime mortgages are home loans to people with weak
credit. A rising wave of defaults and foreclosures on these
loans recently buckled two hedge funds run by Bear Stearns Cos.
Inc. and has hurt the U.S. housing market as lenders stiffen
requirements.




Read more at Reuters.com Bonds News

JPMorgan profit hurt by home equity loans

(Reuters) - The negative trend provides a new worry for investors. Until now, most of the angst has been focused on subprime lending, or loans to people with weak credit.




JPMorgan Chief Financial Officer Mike Cavanagh said losses on home equity loans to prime borrowers, or those with good credit, will steepen, partly because U.S. housing prices have flattened or fallen in some areas.


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UPDATE 1-Wolseley 11-mth pretax profit down, warns on US

(Reuters) - Wolseley said the lower profit was due to higher interest
costs and expected that 12-month group trading profit would be
affected by further one-off restructuring costs of around 9
million pounds.




"There are no signs of any upturn in the U.S. housing market
and the timing of any recovery remains uncertain," the world's
largest distributor of plumbing and heating products and
building materials said in a trading update.


Read more at Reuters.com Market News

Treasuries Rise Before Reports on Consumer Price Inflation, Housing Starts

(Bloomberg) -- U.S. Treasuries rose before
government reports this week that economists said will show
consumer prices slowed in June and home building declined.

Notes have risen in the past week as losses tied to subprime
mortgages fed speculation that a cooling in the U.S. housing
market will hurt the world's biggest economy. Federal Reserve
Chairman Ben S. Bernanke may speak about housing during
congressional testimony July 18 and 19.


Read more at Bloomberg Bonds News

Banks losing up to $52 bln over subprime

(Reuters) - The global financial system can absorb such losses, the
analysts said, but the prospects for the subprime mortgage
sector remains murky. The risks of CDO downgrades by rating
agencies and further depreciation in the U.S. housing market
could result in erosion in CDO values, according to the report.




Meanwhile, the analysts said European banks will suffer
smaller subprime CDO losses than their U.S. counterparts.


Read more at Reuters.com Bonds News

U.S. construction spending up 0.9 percent in May

(Reuters) - Spending on private homebuilding, however, fell 0.8 percent
to a seasonally adjusted $549 billion annual rate, the 15th
consecutive monthly decrease as U.S. housing market troubles
continue.




On the non-residential side, private construction spending
was up 2.7 percent in May. Public spending was up 2.2 percent,
the department said.


Read more at Reuters.com Economic News

Mortgage Rate Increase Pushes U.S. Housing Market, Economy to `Blood Bath'

(Bloomberg) -- The worst is yet to come for the
U.S. housing market.

The jump in 30-year mortgage rates by more than a half a
percentage point to 6.74 percent in the past five weeks is
putting a crimp on borrowers with the best credit just as a
crackdown in subprime lending standards limits the pool of
qualified buyers. The national median home price is poised for
its first annual decline since the Great Depression, and the
supply of unsold homes is at a record 4.2 million, according to
the National Association of Realtors.


Read more at Bloomberg Exclusive News

Futures dip ahead of data, Yahoo up

(Reuters) - Shares of Internet media company Yahoo Inc. traded up more than 5 percent in Europe, however, so a bounce in technology could cushion the market.




Data on U.S. housing starts is due before the bell, a day after a survey showed sentiment among U.S. home builders fell in June to the lowest since February 1991.


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TREASURIES-Prices rise on tame inflation outlook

(Reuters) - The day's main economic report is a sentiment gauge from the
National Association of Home Builders, which is seen as a proxy of
future U.S. housing activities.




A sluggish NAHB reading, which matched a 15-year low in May,
could encourage buying among traders which have been rattled by
the growing view of rising global rates and the Federal Reserve
not lowering interest rates this year, analysts said.


Read more at Reuters.com Bonds News

Treasuries Advance as Yields Lure Investors Before U.S. Housing Reports

(Bloomberg) -- U.S. Treasuries rose as yields near
a five-year high attracted some investors before U.S. housing
market data today and tomorrow.

Bonds rebounded after a six-week slide, the longest run of
losses since 2005. An industry report today will show sentiment
among home builders matched the lowest since 1991 and a separate
report tomorrow will signal a decline in housing construction to
a four-month low, according to Bloomberg surveys.


Read more at Bloomberg Bonds News