US STOCKS-Futures rise, nervous market looks to Fed

(Reuters) - Trading could be volatile after news of the demise of
lender American Home Mortgage Investment Corp still
fresh in investors' minds.




On Sunday the co-president of Bear Stearns Cos.
resigned two days after a rating company warned mortgage credit
problems could hurt the investment bank's profits.


Read more at Reuters.com Bonds News

Asia-Pacific Corporate Bond Risk Increases on Subprime, Default Swaps Show

(Bloomberg) -- The risk of owning corporate bonds in
the Asia-Pacific region rose on concerns that losses tied to the
U.S. subprime mortgage market will widen.

The cost of default protection, measured by credit-default
swaps, increased in Australia and Japan, approaching the highest
in more than three years. Similar contracts tied to U.S. and
European corporate bonds rose on Aug. 3 after Bear Stearns Cos.,
the manager of two hedge funds that collapsed last month, had
its debt-rating outlook cut to negative by Standard & Poor's.


Read more at Bloomberg Bonds News

UPDATE 1-Bear Stearns says president Spector has resigned

(Reuters) - The resignation follows Bear Stearns' assertion on Friday
that it is weathering the worst storm in financial markets in
more than 20 years after a major rating company warned mortgage
credit problems could hurt the investment bank's profits.




In a statement, Bear Stearns said that, effective
immediately, Alan Schwartz has been named the company's sole
president, and Samuel Molinaro will become chief operating
officer in addition to chief financial officer.


Read more at Reuters.com Mergers News

Wall St sinks on credit worries after Bear talks

(Reuters) - U.S. stocks slid sharply on Friday after Bear Stearns said credit markets were in their worst shape in two decades, while jobs data aroused further concerns about weakness in the economy.

Bear Stearns Cos. stock fell 5.9 percent as mortgage jitters drove a broad market sell-off with the three major indexes falling more than 2 percent.


Read more at Reuters Africa

GLOBAL MARKETS-Darker credit mood hits stocks, dollar; bonds up

(Reuters) - NEW YORK, Aug 3 - Deteriorating credit market
sentiment and unexpectedly weak economic data hammered U.S.
stocks and the dollar, while safe-haven government bonds
surged on Friday.




Worries over a potential liquidity crunch escalated as a
top executive at Wall Street investment bank Bear Stearns
described the fixed-income market turmoil as the worst
in 22 years.


Read more at Reuters.com Bonds News

Mexican markets end down on credit nerves

(Reuters) - MEXICO CITY, Aug 3 - Mexican stocks closed down
sharply on Friday and the peso weakened after Standard and
Poor's cut its outlook on Bear Stearns' debt, spooking
investors already nervous about the U.S. subprime mortgage
market.




The benchmark IPC stock index fell 2.38 percent to
29,671.77 points, while the peso currency slipped 0.28
percent to 10.987 per dollar.


Read more at Reuters.com Bonds News

Corporate Bond Risk Rises After Bear Stearns Rating Outlook Cut by S&P

(Bloomberg) -- The risk of owning corporate bonds
rose in the U.S. and Europe after Bear Stearns Cos., the manager
of two hedge funds that collapsed last month, had its debt-
rating outlook cut to negative by Standard & Poor's.

The failure of the Bear Stearns funds, which invested in
subprime mortgage-related bonds, triggered a flight from the
riskiest debt that spurred some lenders to balk at financing
leveraged buyouts. Deutsche Bank AG, JPMorgan and six more banks
today canceled the sale of 1 billion pounds ($2 billion) of
loans for Kohlberg Kravis Roberts & Co.'s LBO of U.K. drugstore
chain Alliance Boots Plc after failing to find investors, two
people with direct knowledge of the deal said.


Read more at Bloomberg Bonds News

Bear drops after S&P lowers outlook

(Reuters) - The change pushed Bear Stearns' shares down 6 percent to $108.69 and drove the cost of protecting its debt with credit derivatives nearly 50 basis points higher.




A spokesman for Bear Stearns was not immediately available for comment.


Read more at Reuters.com Business News

London Boosts Foreign-Exchange Trading to Double New York's Level in April

(Bloomberg) -- London raised average daily currency
trading in April to more than double the level of New York,
extending its lead as the world's largest center for foreign
exchange, according to central bank surveys.

``London tends to dominate in this market,'' said Steven
Barrow, chief currency strategist at Bear Stearns International
Ltd. in London. ``I don't see why that should change.''


Read more at Bloomberg Currencies News

Bear Stearns Shares Show Cayne's Dummy `Body Blow' Won't Prove Massive

(Bloomberg) -- When Bear Stearns Cos. Chief
Executive Officer James E. ``Jimmy'' Cayne told the New York
Times the failure of the firm's hedge funds was a ``body blow of
massive proportion,'' he may have been using a tactic honed in
three decades of championship bridge.

To win the card game, a player sometimes will misstate the
number of tricks he can win to dupe opponents into
underestimating his hand. So far, Bear Stearns shareholders
aren't showing much anxiety. The stock has outperformed its peers
since Cayne's remarks were published on June 29, even after Bear
Stearns told investors in the High-Grade Structured Credit
Strategies and High-Grade Structured Credit Strategies Enhanced
Leverage funds that almost all of their money was wiped out.


Read more at Bloomberg Stocks News

Barclays may have lost big in Bear fund-WSJ

(Reuters) - Bear Stearns said on Tuesday that assets in the fund are at
this point essentially worthless.




The Journal said Barclays was reviewing its options for
recovering the $400 million, citing arbitration, a negotiated
settlement or litigation as possible strategies.


Read more at Reuters.com Bonds News

European Stocks Fall Amid Hedge-Fund Losses, Earnings Outlook; Total Drops

(Bloomberg) -- European stocks dropped this week
following three weeks of gains as investors speculated hedge-fund
losses at Bear Stearns Cos. may signal wider problems in credit
markets and the strong euro might erode earnings.

``There are fears more hedge funds might get into trouble,''
said Juergen Lukasser, who helps manage $20 billion as head of
equities at Constantia Privatbank AG in Vienna. ``After months of
smooth sailing the question of how much risk you're willing to
take has come back. In the long run this might lead to more risk
aversion, making it more difficult to finance takeovers.''


Read more at Bloomberg Stocks News

European Bonds Surge; Benchmark Yields Drop Most in 3 1/2 Years This Week

(Bloomberg) -- European bonds surged, pushing 10-
year yields down the most in 3 1/2 years this week, as the risk
of owning corporate debt rose to a two-year high and investors
switched into safer government assets.

The benchmark bond yield fell to the lowest in seven weeks
today on concern defaults on U.S. home loans to people with poor
credit histories will spread. Government debt around the world
rallied this week after Bear Stearns Cos. told investors they
weren't likely to get money back from two of its hedge funds
that bet on securities backed by subprime mortgages.


Read more at Bloomberg Bonds News

Yen Advances as Bear Stearns Hedge-Fund Losses Restrain Carry Trades

(Bloomberg) -- The yen rose as losses on Bear
Stearns Cos. hedge funds prompted investors to reduce purchases
of financial assets funded by borrowing in Japan.

The Japanese yen advanced against 15 of the 16 most-actively
traded currencies as investors scaled back so-called carry
trades. The dollar touched a record low against the euro earlier
after Bear Stearns told investors in two of its hedge funds they
will get little if any money back after losses related to U.S.
subprime mortgages.


Read more at Bloomberg Currencies News

Gold Rises in Asian Trading as Dollar Slumps to Record Low Against Euro

(Bloomberg) -- Gold gained in Asia as the U.S.
dollar's slump to a record low against the euro boosted demand
for the precious metal as an alternative investment. Silver rose.

Gold generally moves in the opposite direction of the dollar,
which dropped against the euro after Bear Stearns Cos. reported
hedge fund losses, fueling speculation investors will spurn U.S.
assets as the economy slows. Gold has gained 4.6 percent this
year, the same advance as the euro against the dollar. Europe's
single currency traded at $1.3810 at 9:52 a.m. in Singapore after
reaching all-time high at $1.3822 earlier today.


Read more at Bloomberg Commodities News

UPDATE 2-US banks, brokers shares fall on subprime woes

(Reuters) - NEW YORK, July 10 - The shares of U.S. commercial
and investment banks fell on Tuesday after two bond rating
agencies started to downgrade billions of dollars of securities
backed by subprime bonds, triggering concerns that bond sales
and lending businesses could slow.




Declines were led by banks perceived to have high exposure
to mortgages and other fixed income businesses, including
Lehman Brothers Holdings Inc. , which fell 5 percent,
and Bear Stearns Cos. , which fell as much as 4.1
percent.


Read more at Reuters.com Bonds News

REFILE-Banks losing up to $52 bln from subprime CDOs -CS

(Reuters) - In June, fears of hedge fund losses in subprime mortgages,
or home loans made to borrowers with blemished credit
histories, rattled financial markets after news of hefty losses
at two funds managed by Bear Stearns .




Meanwhile, the London-based Credit Suisse analysts who
wrote the report said European banks will have less subprime
CDO losses than their U.S. counterparts.


Read more at Reuters.com Bonds News

Hilton would pay Blackstone break-up fee

(Reuters) - Break-up fees are customary in takeover deals and are put in place to dissuade the sides from walking away.




In the filing, Hilton said Blackstone received financing commitments from a group of banks including Bear Stearns , Bank of America , Goldman Sachs , and Morgan Stanley . The filing doesn't detail the amount of debt that will be used to finance the deal.


Read more at Reuters.com Business News

Dollar down broadly on US financial sector woes

(Reuters) - The dollar fell broadly and the yen and Swiss franc rallied on Monday as concerns about U.S. housing market woes spilling into the wider economy dented risk appetite and led investors to buy low yielding currencies.

Concerns about the U.S. subprime mortgage market -- amplified in recent week by trouble at two Bear Stearns-managed hedge funds -- have dented investors' appetite for risk.


Read more at Reuters Africa

S&P, Moody's, Fitch Obscure Rising Risks on $200 Billion of Mortgage Bonds

(Bloomberg) -- Standard & Poor's, Moody's Investors
Service and Fitch Ratings are masking burgeoning losses in the
market for subprime mortgage bonds by failing to cut the credit
ratings on about $200 billion of securities backed by home
loans.

The highest default rates on home loans in a decade have
reduced prices of some bonds backed by mortgages to people with
poor or limited credit by more than 50 cents on the dollar and
forced New York-based Bear Stearns Cos. to offer $3.2 billion to
bail out a money-losing hedge fund. Almost 65 percent of the
bonds in indexes that track subprime mortgage debt don't meet
the ratings criteria in place when they were sold, according to
data compiled by Bloomberg.


Read more at Bloomberg Bonds News