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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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.


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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


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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.




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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.


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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.


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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.


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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