Economy: A bigger-than-expected drop in existing home sales and Ford's worst earnings report ever weighed on the market

Having passed a House vote, the housing bill -- revised with provisions for more explicit government guarantees of the mortgage agency portfolios -- is now headed for a Senate vote, which could come as early as Thursday.

Bill Gross, managing director of bond house Pimco, weighed in on the housing bill currently before Congress, calling the legislation that is designed to lower the cost of mortgage credit "the best way to begin the long journey back to normalcy" in the housing market.

New York Fed President Timothy Geithner, speaking before the House Financial Services Committee, warned that strong financial supervision will be needed to reduce the moral hazard of recent Fed and government backstops such as the Bear Stearns bailout and expanded capabilities of the Treasury and Fed to support the government-sponsored agencies.

Oil prices rebounded from their lows despite ongoing concerns about demand destruction as government data showed higher refined product supplies on Wednesday. August WTI crude oil futures settled $1.05 cents higher at $125.49 a barrel on Thursday.

Source: David Bogoslaw
Full Article: http://www.businessweek.com/investor/content/jul2008