WALL STREET P.M. 07.07.09DOW FALLS BELOW 8,200

DJIA: -161.27 CLOSE 8,163.60
S&P 500 -17.69 CLOSE 881.03
NASDAQ -41.23 CLOSE 1,746.17

'REALITY CHECK' FOR MARKETS
NEW YORK TIMES: Concerns about whether American companies can generate healthy profits in a deep recession hammered Wall Street on Tuesday . . . "It's an overall reality check," said Doreen Mogavero, president of the floor-brokerage firm Mogavero, Lee & Company. "People are starting to worry there may have been a disconnect between the market and reality. I kept thinking we were way due for a correction a month ago or more, and it wasn't coming." . . . READ MORE

FOUR-MONTH RALLY OVER?
BLOOMBERG: U.S. stocks fell Tuesday as energy shares slid on lower oil prices and concern grew that earnings will fail to justify the four-month stock market surge . . . "There’s a sense we've moved up too quickly," said Richard Sichel, who oversees $1.3 billion as chief investment officer at Philadelphia Trust Co. in Philadelphia . . . READ MORE

STIMULUS TALK CHILLS MARKET
REUTERS: U.S. stocks fell on Tuesday as talk of a second government stimulus plan stirred fears . . . "I think it's insane, the first stimulus package has not even been spent yet," said Andre Weisbrod, president & chief executive of Staar Financial Advisors in Pittsburgh. "They are creating what I would call the government bubble" . . . READ MORE

MAJOR LENDERS REJECTCALIFORNIA 'I.O.U.' NOTES

STATE DEBT CRISIS LOOMS
WALL STREET JOURNAL: A group of the biggest U.S. banks said they would stop accepting California's IOUs on Friday, adding pressure on the state to close its $26.3 billion annual budget gap. . . . After state leaders failed to agree on budget solutions last week, California began issuing IOUs -- or "individual registered warrants" -- to hundreds of thousands of creditors. State Controller John Chiang said that without IOUs, California would run out of cash by July's end. . . . READ MORE