A.M. MARKET UPDATE 07.30.09:WALL STREET WATCHES CHINA

ASIAN MARKETS BOUNCE BACK
ASSOCIATED PRESS: Asian markets rebounded Thursday as China tried to allay concerns it would curb lending that's helped fuel a recovery in the region's second-biggest economy. European markets were mixed. Japanese shares, meanwhile, closed at their highest level in almost 10 months as major carmakers like Nissan Motor and Honda Motor jumped on stronger-than-expected earnings . . . READ MORE

BEIJING MAY REIGN IN STOCKS
BLOOMBERG: China’s government may take action to slow the world's second-best-performing stock market because of concern prices rose too fast, Robeco Hong Kong Ltd.'s Arnout van Rijn said. . . . "The Chinese authorities are actually not very happy with the stock market moving up as quickly as that," van Rijn, chief investment officer of Robeco Hong Kong Ltd., told Bloomberg Television. "They will think about things, how to put this into a broader perspective and take things more slowly" . . . READ MORE

CREDIT TIGHTENS IN CHINA
BLOOMBERG: China’s overnight money-market rate rose for the first time in more than a week on speculation the availability of credit is tightening as companies recommence share offerings and because of a surge in bank lending . . . READ MORE

U.S. BUSINESS NEWS
SENATE PROBES GOLDMAN
REUTERS: Goldman Sachs Group Inc and Deutsche Bank AG were issued subpoenas by a U.S. Senate panel looking for evidence of fraud in the 2008 mortgage-market meltdown, the Wall Street Journal said, citing people familiar with the matter. . . . Washington Mutual Inc, which is now mostly owned by JP Morgan Chase & Co, was also issued a subpoena by the U.S. Senate Permanent Subcommittee on Investigations . . . READ MORE

TODAY'S $28 BILLION TREASURY
AUCTION HAS MARKET 'NERVOUS'
BLOOMBERG: Treasuries fell Wednesday on speculation demand is waning for the $115 billion of debt the U.S. government is selling this week to finance a growing budget deficit. Longer-maturity bonds led declines before a $28 billion sale of seven-year notes today, the last of the government's four auctions this week. "The market is nervous," said Hideo Shimomura, chief fund investor in Tokyo at Mitsubishi UFJ Asset Management Co. "A lot of people are thinking about how much demand there will be from central banks at the auction" . . . READ MORE

UNEMPLOYMENT PUSHING MORE
HOMEOWNERS TO FORECLOSURE
REUTERS: Cities in the U.S. Sun Belt states of California, Florida, Nevada and Arizona dominated the record foreclosure spree in the first half of the year, but distress in other regions emerged as joblessness spread, RealtyTrac said on Thursday . . . With the unemployment rate near a 26-year high and many employers cutting wages, more consumers in areas that were initially spared in the foreclosure explosion are now behind in their home loan payments . . . READ MORE

F.D.I.C. TO BREAK UP BAD BANKS
WALL STREET JOURNAL: The Federal Deposit Insurance Corp., grappling with the worst banking crisis since the 1990s, is poised to start breaking failed financial institutions into good and bad pieces in an effort to drum up more interest from prospective buyers . . . READ MORE

MICROSOFT, YAHOO JOIN
FORCES AGAINST GOOGLE
USA TODAY: Yahoo's 10-year deal with Microsoft to battle Google for online search customers and ad sales is the boldest initiative Carol Bartz has made since she became Yahoo's CEO in January. But . . . even her vow that the alliance would deliver "boatloads of value for Yahoo" left many investors stony faced . . . Yahoo shares fell 12% on Wednesday to $15.14 as Microsoft shares rose 1%, to $23.80 . . . READ MORE