European shares bounce back, carmakers rally

(Reuters) - European shares reversed early sharp losses on Friday to rise nearly 0.7 percent on the day as robust corporate results from car makers helped offset worries over the credit market and the health of the U.S. economy.

At 0901 GMT, the pan-European FTSEurofirst 300 index was up 0.58 percent, at 1,536.49 points, after falling more than 1 percent in early trade. It dropped 2.8 percent on Thursday on signs of deteriorating conditions for corporate buyouts and further weakness in the U.S. housing market.


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Home Depot sees deeper profit drop on housing woes

(Reuters) - ATLANTA, July 10 - Home Depot Inc. on Tuesday forecast a deeper profit drop for 2007, citing weakness in the U.S. housing market.



The home improvement industry leader said it expected per-share profit for the full year to fall 15 percent to 18 percent to a range of $2.30 to $2.36 per share. In May, Home Depot had said earnings per share would fall 9 percent this year.


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Japanese Shares Rise as Yen Weakens; Honda Leads Gains, Bridgestone Jumps

(Bloomberg) -- Japanese stocks advanced, helping
the Nikkei 225 Stock Average rebound from a four-day slide,
after the yen reversed a strengthening trend and some U.S.
investment houses said they see few risks of widespread turmoil
in credit markets.

Honda Motor Co. jumped 2.3 percent, after sliding 1.6
percent during the past three sessions as the yen strengthened
and a weakening U.S. housing market increased concern consumer
demand would be curbed and that investors would favor bonds over
stocks. Toyota Motor Corp. rose after Goldman, Sachs & Co.
lifted its recommendation on the shares to ``buy.''


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Corporate Bond Risk Jumps in Europe on Concern Over U.S. Housing Market

(Bloomberg) -- The risk of owning European company
bonds jumped to the highest in almost three months on concern a
slowing U.S. housing market will hit global corporate earnings
growth, according to traders of credit-default swaps.

Contracts based on 10 million euros ($13 million) of debt
included in the iTraxx Crossover Series 7 Index of 50 European
companies increased 7,500 euros to 222,000 euros, the highest
since April 5, according to JPMorgan Chase & Co. An increase in
the cost of the contracts, used to bet on a company's ability to
repay debt, shows a deteriorating outlook for credit quality.


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No relief for yen as carry trades continue

(Reuters) - The comparatively high-yielding New Zealand dollar recovered all the losses it incurred on suspected central bank intervention late on Friday, striking a 22-year high against the dollar and climbing near to a 20-year peak against the yen.




Despite falls in equity markets fueled by rising global interest rates and renewed concern about the U.S. housing market, currency investors continued to put on carry trades, in which they borrowed in low-yielding currencies like the yen to fund purchases of higher-return units.


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Mexico Bolsa Falls on U.S. Housing Slump, Led by Cemex; Bancolombia Rises

(Bloomberg) -- Mexico's main stock index fell for the
first time in five days, led by Cemex SAB, on concern that the
slump in the U.S. housing market will hurt demand for building
materials.

The benchmark Bolsa index slid 157.62, or 0.5 percent, to
32,060.55 as of 12:36 a.m. in New York. Cemex, North America's
largest cement producer, accounted for more than half of the
decline and fell the most since Feb. 27.


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Homebuilders dragged down by Meritage, rate fears

(Reuters) - The U.S. housing market began declining last year as higher interest rates and home-price sticker shock spooked potential buyers. The meltdown in lending to those with checkered credit histories, also referred to as subprime borrowers, has exacerbated the drop.




Meritage warned on Wednesday that weaker sales and higher cancellation rates in the past two months would prevent it from achieving its April earnings and revenue forecasts.


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U.S. auto sales rebound after weak spring

(Reuters) - Ford Motor Co. and Honda Motor Co. Ltd. bucked the trend by posting a decline of 10 percent and 1.4 percent, respectively, in May sales. Ford also surrendered the industry's No. 2 spot to Toyota for the month.




GM , which beat Wall Street expectations with a nearly 5 percent sales gain, cut its forecast for industrywide sales in 2007 but said retail sales likely had stabilized after a weak spring that had raised concerns about a deepening slump tied to a slower U.S. housing market.


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