- Indices are down this morning after opening lower, putting the brakes on the gains of the last two days. Ford's $8.7B quarterly loss and the morning's weaker-than-expected June home sales data are helping to maintain the downward momentum, with the latter tempering yesterday's news that the housing rescue bill was most likely headed for passage. After rising further in the pre-market, FRE-2% and FNM-6% are loosing ground on the housing news, as well as comments from PIMCO's Bill Gross, who said that he says he sees $1T in cumulative losses from the real estate bubble. While homebuilder and mortgage lender RYL-15% reported more or less in line with estimates, the morning trends and weak guidance are slamming the name. The financials are broadly weaker, led by WM-13% (interestingly Morgan Stanley raised the large- and mid-cap banking sector to "In-Line" from "Cautious"). Ford is down 6% after missing on earnings in a very big way, thanks in part to reporting a $2.1B impairment charge for its credit unit stemming from the falling value of trucks and SUVs coming off lease. The CFO asserted that he is confident the company's liquidity is sufficient to make it through economic downturn. POT-5% crushed estimates and guided higher for the coming quarter and the full year, nevertheless it has fallen down a hole in mid-morning trading after rising earlier in the session. Various commentators were out defending the name mid day. Investors are hammering consumer names: CHIC-14% after match estimates and guiding lower, while CMG-17% after missing by a hair and reporting solid same-store sales growth for the quarter. Tech is benefiting from several positive stories. AMZN+14% jumped in the pre-market and is headed higher after beating the Street and guiding above estimates. The ADR of Chinese Internet power BIDU+16% is also very strong after reporting strong earnings yesterday. QCOM+18 is doing very well after announcing that it has settled all outstanding litigation with NOK+5%. The two companies are cross licensing contested technology, and best of all, Nokia will provide Qualcomm with a "substantial" up-front payment as well as on-going royalties.

- August natural gas has moved below $9 for the first time since early this spring after the weekly inventory build to stockpiles came in ahead of expectations. September crude gave up overnight night gains, but breaking from recent trends the move lower had little if any effect on the overall stock market. Crude remains below $125 which has helped has kept the pressure on gold. August gold is sitting just above its 90-day moving average at $920. Softer equities have helped push bond futures higher along with the weak housing data and a second weekly jobless claims print above 400K. The long bond future is bouncing nearly a full point while the 10-year is higher by more than 20 ticks. The 5-year is up nearly half a point yielding 3.43% ahead of the results of this afternoon's $21B 5-year note auction results.

- In currencies, the USD is mixed as disappointing data on both sides of the pond seem to be clouding the current outlook. However, the extent of the potential slowdown in Europe is likely to keep the recent firm tone intact for the USD. The USD/JPY continues to hold above its 200-day average of 106.95. The IFO data suggests that recession in Germany remains unlikely, while also showing that the economy is cooling off considerably. Overall, dueling Euro-Zone data provides evidence that the ECB may remain on hold with interest rate policy. The recent drop in oil from its historic highs only re-enforces this position. The EUR/USD cross is at 1.5695, up 10 pips from its Asian opening lows. Technical factors are helping to contain the cross in a 1.5630 to 1.5730 range.

- Concerns over the UK economic outlook helped the GBP retrace its broad gains from Wednesday. Dealers see 1.9810 as the five-week uptrend line and a likely point where GBP sell stops lurk. Commodity currencies remained broadly steady against the USD. The NZD is consolidating its overnight losses after the RBNZ cut rates by -25bps to 8.0% and signaled additional cuts to come.