Ford reports a 24% decline in U.S. sales for May, but the auto maker still posts its highest monthly sales since last June. Ford plans to take advantage of the competitors’ woes, announcing a 10,000-vehicle increase in 2Q production.

US STOCKS FLAT ON HOUSING DATA

U.S. stocks trade flat, seesawing between gains and losses, after a report
shows pending sales of existing homes in April posted their largest monthly
increase in eight years. Financial stocks trail the broader market as blue-chip firms announced plans to raise fresh capital. Treasury prices stabilize.

US PENDING HOME SALES CLIMB 6.7% IN APRIL

Index of pending sales of previously owned homes increases for a third month
in a row, the National Association of Realtors says, rising 6.7% in April to
90.3, as buyers seized on foreclosure-cheapened property, low interest rates
and a tax credit.

AMERICAN EXPRESS, JPMORGAN PRICE STOCK DEALS

JPMorgan sells 142 million shares at $35.25 a share, raising $5 billion.
American Express sells a 19.8 million-share deal, priced at $25.25 a share,
raising $500 million. Deals done in preparation to exit the federal bailout
program. JPMorgan shares fall 4%; American Express is down 6%.

GM SELLING HUMMER TO PRIVATELY OWNED CHINA CO

GM reaches a preliminary agreement to sell its Hummer brand to Sichuan
Tengzhong Heavy Industrial Machinery, the New York Times reports, citing a
person familiar with the Chinese government’s approval process.

BOFA TO ‘COMFORTABLY’ TOP CAPITAL-RAISE TARGET

Bank of America says it will “comfortably” exceed the government’s $33.9
billion capital-raising mandate, with the company putting its current total at
$33 billion. Shares rise 1%.

TEMASEK, RICHARD LI JOIN BID FOR AIG INVESTMENTS

Singapore’s Temasek Holdings and Richard Li’s Pacific Century Group are among
the financial backers considering entering exclusive negotiations to buy
American International Group’s asset-management business, which could go for
$500 million.

BRAZILIAN AIR FORCE FINDS PLANE DEBRIS

Brazilian air force aircraft searching for a missing Air France flight that
had been carrying 228 people have found debris from a plane. The “small
remains” were located 400 miles northeast of Brazil’s Fernando do Noronha
island.

COLLECTIONS FIRMS TO END DECEPTIVE PRACTICES

Creditors Interchange Receivable Management LLC, Capital Management Services
LP and Tri-Financial LLC agree to change their business practices after a probe
by NY Attorney General Andrew Cuomo’s office.

MOODY’S: OUTLOOK STILL NEGATIVE FOR US BANKS

Moody’s Investors Services says its outlook for credit ratings on the U.S.
banking sector remains negative as the recession is expected to lead to $470
billion in loan and investment losses and write-downs this year and next.

CHRYSLER SALE APPEAL TO BE HEARD BY 2ND CIRCUIT

Bankruptcy judge Arthur Gonzalez in Manhattan certifies the sale of the bulk
of Chrysler’s assets to a group led by Fiat, paving the way for a challenge of
the sale order to be heard by the U.S. Second Circuit Court of Appeals,
skipping the usual review by a U.S. district judge.

US LAWMAKERS WANT TO SHINE MORE LIGHT ON FED

The Federal Reserve’s longtime penchant for opacity is coming under fire from
lawmakers demanding to know more about the central bank’s role in the U.S.
government’s response to the financial crisis.

MORGAN STANLEY TO RAISE $2.2B IN BID TO EXIT TARP

Morgan Stanley plans a $2.2 billion stock offering, a deal that is expected
to include China Investment and Mitsubishi UFJ Financial Group, as it prepares
to repay taxpayer money it received under the government’s Troubled Asset
Relief Program. Shares fall 4%.

SEC HEAD VOWS TO IMPROVE AGENCY OPERATIONS

SEC Chairman Mary Schapiro tells U.S. lawmakers she’s “disappointed” to learn
of short-comings in the agency’s internal operations and she plans to hire a
chief operating officer and improve records management.

PIMCO FILES FOR SIX MORE ETFS

In another sign it hopes to make a big mark on the ETF business, Pimco files
to launch six new ETFs. Move comes the same day Pimco’s first ETF, a short-term
Treasury fund, begins trading among investors on NYSE Arca.

GEITHNER PLAYS UP CONSENSUS BETWEEN CHINA, US

U.S. Treasury Secretary Timothy Geithner says he believes Chinese leaders
understand U.S. measures to tackle the financial crisis and are confident in
the U.S. economy, while he in turn praises China’s own stimulus measures.

TOBACCO REGULATION BILL ADVANCES IN SENATE

The U.S. Senate takes a step forward toward debate of a bill that would give
the Food and Drug Administration authority to regulate tobacco, as senators
show strong support for the measure in a procedural vote.

HURRICANE SEASON TO BE SLIGHTLY BELOW AVERAGE

Colorado State University forecasters are trimming their forecast for what
they expect to be a “slightly below average” 2009 Atlantic hurricane season.
They predict 11 named storms, with five hurricanes, two of which will be
intense.

CFTC ASKS LAWMAKERS FOR BIGGER BUDGET

The head of the U.S. Commodity Futures Trading Commission tells federal
lawmakers that President Barack Obama’s recent request to increase the CFTC’s
budget by $14.6 million may still not be enough to meet the agency’s needs.

COURT OKS US CANCELLATION OF FIGHTER JET DEAL

Federal appeals court rules the government was justified in canceling a
contract with a Boeing unit and General Dynamics to build a new Navy stealth
fighter. Then-Secretary of Defense Dick Cheney terminated the contract in 1991.

MINNESOTA GOVERNOR WON’T SEEK 3RD TERM, REPORT SAYS

Minnesota Gov. Tim Pawlenty, a Republican, will not run for a third term in
the 2010 election, Twin Cities television station WCCO reports, citing sources.
Pawlenty is expected to make the announcement Tuesday afternoon.

======= DOW JONES NEWSWIRES ANALYSIS AND COMMENTARIES =======

AL’S EMPORIUM
Let Fingers Do The Walking Into Bankruptcy

Al Lewis takes a look at the Chapter 11 bankruptcy of Yellow Pages publisher
R. H. Donnelley and considers how much was due to economic factors,
acquisitions and the leadership of CEO Dave Swanson.

MARK TO MARKET
Playing Footsie With Uncle Sam Has Its Price

Polonius warned his son Laertes in Shakespeare’s “Hamlet”: “Neither a
borrower nor a lender be.” Why not, you ask? A borrower gives the lender power
over him; the lender gives the borrower power over him.

============ U.S. MARKETS ACTION ===========
DJIA up 20.69 points to 8742.13
NASDAQ up 7.01 points to 1835.69
S&P 500 up 1.89 points to 944.76
10-year T-note 95 10/32 at 3.690 yield dn .024
NYMEX Crude up $0.05 at $ 68.63/bbl
Euro/Dollar up 0.0148 at 1.4308