President Bush has signed a housing rescue plan into law. Home prices have been continuing to fall during the housing crises while foreclosures are still rising. A Marketwatch report says some Republican lawmakers were urging Bush to reject the rescue bill. Here are three of the main components of the new bill from Marketwatch.
allowing homeowners who cannot afford their monthly payments to refinance into government-backed loans through the Federal Housing Administration;
extending a line of credit to Fannie (FNM) and Freddie (FRE), the government-sponsored mortgage-finance titans;
modernizing the FHA, increasing the loan limit for FHA loans and increasing conforming-loan limits for Fannie and Freddie.
Stocks were up today even though oil prices starting climbing once again. The Dow climbed 186 points to 11,583 while the Nasdaq managed just a 10 point gain.
Today's stock market was almost a complete reversal of what occurred on Monday. The DOW climbed over 260 points and the Nasdaq rose over 55 points. Each index was up about 2.5% on the day.
U.S. stocks staged a solid rally Tuesday to more than recoup the prior day's steep losses, as consumer confidence rose and crude prices declined, offering some respite to ongoing concerns about the economy.
"These are good things and when you combine that with relatively low rates, maybe we can be happy at least one day this week," said Kevin Giddis, managing director, Morgan Keegan & Co.
The major stock indexes built on gains to end at or near session highs after data showing a better-than-forecast rise in consumer confidence and the price of crude fell nearly $4 a barrel.
The main reason for the optimism today was the fact that oil prices fell again. Oil closed at $122.19 a barrel on the New York Mercantile Exchange. It was a two-month low for oil as Reuters reports in the video below. If oil were to continue falling maybe the market could sustain something longer than a single day rally.
Warren Buffett Thinks College Students Should Avoid Credit Cards
Youngsters wanting to make money got some valuable advice from Warren Buffett who was visiting his local Dairy Queen for the launch of the new Girl Scouts Thin Mint Blizzard earlier this month. One of his suggestions to the young girls was to avoid credit cards - that's advice some adults would also be wise to follow.
Surrounded by a group of Girl Scouts in his hometown of Omaha, Buffett offered this tip for college students: "The biggest suggestion I have is to avoid credit cards. Interest rates are very high on credit cards. Sometimes they are 18 percent. Sometimes they are 20 percent. If I borrowed money at 18 or 20 percent, I'd be broke.... So if I had one piece of advice for young people generally it would be to just avoid credit cards," he said.
And what advice does Buffett have for a new investor? "I would do a lot of reading before I invested," he replied. "In other words I would prepare for it. I wouldn't jump in the water until I know how to swim.... I read every book the Omaha Public Library had about investing by the time I was 11."
On qualities Buffett looks for in employees? "The biggest thing I look for is if they have a passion for whatever they are going to do," he said.
Reuters reports in the video below that the biggest drop in existing home sales in 10 years has reignited concerns about the economy. Stocks were hammered today on news that existing home sales fell 2.6 percent in June. Weekly jobless claims also climbed past the 400,000 mark. The Dow dropped 283 points; the Nasdaq fell 45 points and the S&P 500 lost 29 points.
The Dow dropped well below the 11,000 mark as Fed Chairman Bernanke warned that the economy faces numerous difficulties.
Bernanke told Congress the U.S. economy is faced with "numerous difficulties," such as strains in financial markets, a shaky job market and ongoing weakness in the housing market. These difficulties are persisting despite the Fed's massive interest rate cuts and expanded lending efforts over the past year.
U.S. officials' comments come only days after the Fed and the Treasury said they would lend financial support to mortgage financiers Fannie Mae and Freddie Mac if necessary. The well-being of the government-chartered companies has drawn Wall Street's attention in recent weeks as the companies together hold or guarantee more than $5 trillion in mortgages -- nearly half the nation's total.
Investors are worried about a number of things - among them the weak dollar that just hit another new low according to Bloomberg.
"The markets are reacting negatively to the renewed credit crisis in the U.S. and that's hurting the dollar across the board," said Roberto Mialich, a Milan-based currency strategist at Unicredit Markets & Investment Banking, a unit of Italy's largest lender. "The market is speculating that Bernanke will offer a gloomy outlook for the U.S. economy."
The dollar fell to $1.6038 per euro, the lowest since the euro's inception in 1999, and was at $1.6006 as of 7:22 a.m. in New York, from $1.5908 yesterday. The U.S. currency also dropped to 104.61 yen, the lowest level since June 9, from 106.14 yen yesterday. The yen traded at 167.69 per euro, from 168.89 yesterday, when it weakened to 169.75, the lowest since the single currency's debut.
The dollar may fall to between $1.62 and $1.63 in the coming month, Mialich said.
Lately its been financial stocks getting the biggest drubbing. Stocks opened lower and they have remained in negative territory so far this monring.
Concern over Fannie Mae and Freddie Mac combined with rising oil prices has helped push the Dow below the 11,000 mark for the first time in over two years. Shares of Fannie Mae and Freddie Mac have plunged nearly 50% today. The AP reports that investors were not impressed with remarks by Treasury Secretary Henry Paulson. Some investors were hoping for a government bailout.
Investors seemed unimpressed by a statement from Treasury Secretary Henry Paulson, who said the government's focus is ensuring that Fannie Mae and Freddie Mac remain as presently constituted to carry out their mission.
The government-chartered companies at times each lost more than 40 percent on growing speculation that a government bailout is needed. A collapse of the two financiers would cause further shock to the financial system, and trigger more losses to banks and brokerages with significant holdings of mortgage-backed securities.
The troubles at Fannie Mae and Freddie Mac are just the latest depressing turn in a year-old credit crisis that shows no sign of ending, disappointing stock traders who just months ago who thought the worst was perhaps over.
The Dow fell as low as this morning 10,980.37. The last date the Dow traded below 11,000 was on July 25, 2006. Since falling below the 11,000 mark the Dow has climbed back just barely above it again.
Oil prices also remain near record highs. Concern that Israel may launch an attack on Iran are helping to boost oil prices.
Vanguard Group Founder Jack Bogle Tells Investors to Stay the Course
The Dow dropped more than 230 points today as concern over financials continued. The Vanguard Group Founder Jack Bogle told investors to change nothing in the video from Fox Business below. He dismissed the idea of "doubling down" and said investors should focus on staying the course. Bogle also said the market today is being driven by speculation.
MSNBC.com reports that leading coffee retailer now plans to close 600 stores in the U.S. Previously, they planned to close just 100 stores. It's a clear sign the economy is moving in a negative direction and that some consumers are cutting back on spending. The company may also let 12,000 employees go that work both full and part-time jobs.
The company said it now plans to close 600 company-operated stores in the United States, up from its previous plans to close 100 stores. The company also said it now plans to open fewer than 200 stores in its coming fiscal year.
The Seattle-based gourmet coffee retailer said the company used several criteria in deciding which stores to close, including whether they were profitable or expected to become profitable in the near future. In a statement, it added that "consideration was given to the impact of current and anticipated economic trends."
Starbucks, known for sometimes going so far as to open stores across the street from one another, has recently acknowledged that it may have lost some of its luster during a long period of rapid store openings and expansion into everything from breakfast sandwiches to movie promotions. The company also has been feeling the pinch from a down economy, which has made $4 coffee drinks less palatable for many Americans.
MSNBC also says Starbucks runs 16,000 Starbucks stores worldwide.
Youngsters wanting to make money got some valuable advice from Warren Buffett who was visiting his local Dairy Queen for the launch of the new Girl Scouts Thin Mint Blizzard earlier this month. One of his suggestions to the young girls was to avoid credit cards - that's advice some adults would also be wise to follow.
Concern over Fannie Mae and Freddie Mac combined with rising oil prices has helped push the Dow below the 11,000 mark for the first time in over two years. Shares of Fannie Mae and Freddie Mac have 
MSNBC.com 