IBT Staff Reporter

Treasury Secretary Henry Paulson said on Tuesday the global economy is strong and liquidity will return to normal in financial markets once investors reprice risk.

Shareholders in OMX are weighing a $4 billion bid by Borse Dubai for the firm and waiting to see whether U.S. rival Nasdaq sweetens its $3.7 billion offer, Borse Dubai's head said on Tuesday.

Home foreclosures rose 9 percent in July from June and soared 93 percent from a year ago as states that once enjoyed a white-hot housing market are now seeing the greatest number of loan failures, a real estate survey reported on Tuesday.

Hurricane Dean slammed into Mexico's Caribbean coast on Tuesday, flooding streets, blowing the roofs off houses and battering resorts where tens of thousands of tourists and residents huddled in shelters.

Shares in Bayer rose on Tuesday on renewed market talk that Switzerland's Novartis was interested in the German drugs and chemicals group, traders said. There is the rumour again that Novartis is bidding for Bayer, one trader said without giving any further details.

A recent flurry of deals shows the cell phone microchip market may be about to shrink as some small players take a step toward the big leagues and others get squeezed out.

Capital One Financial Corp on Monday said it will eliminate 1,900 jobs and shut down a wholesale mortgage unit it acquired less than a year ago, as it struggles with the U.S. housing downturn.

Viacom Inc's MTV Networks is expected to on Tuesday announce plans to merge its online digital music offerings into a joint venture with music software company RealNetworks Inc, the Wall Street Journal reported.

Wal-Mart Stores Inc said on Tuesday that it was now selling digital music downloads on its Web site without the customary copy-protection technology that limits where consumers can play the songs.

The cut is meant to stabilize inflation after consumer prices rose in July at the fastest pace in more than a decade.

Countrywide Financial Corp, the largest U.S. mortgage lender, said it had eliminated about 500 jobs nationwide as it tries to cope with a credit shortfall stemming from the U.S. housing downturn.

Billionaire investor Warren Buffett may buy parts of beleaguered mortgage lender Countrywide Financial Corp, some investors are speculating, according to The Wall Street Journal.

Investor AB is ready to take only Nasdaq shares for its OMX stake under Nasdaq's bid for the bourse firm, a spokesman said on Tuesday, adding that this stance was the same as before Friday's rival offer from Borse Dubai.

Finance chiefs from the world's three biggest economies sought on Tuesday to keep a lid on global market jitters as banks at the sharp end of a global financial storm said they faced serious trouble. Japanese Finance Minister Koji Omi and U.S. Treasury Secretary Henry Paulson agreed to keep a close eye on markets while German Finance Minister Peer Steinbrueck said there was no sign of the turmoil hitting the wider economy.

Shares of KKR Financial Holdings LLC (NYSE: KFN), an affiliate of private equity giant Kohlberg Kravis Roberts & Co., rose over 8 percent on Monday after it announced a plan to raise $500 million in cash from investors, including existing shareholders.

Viacom Inc's Paramount Pictures and DreamWorks Animation SKG Inc said on Monday they will release their next-generation DVD titles exclusively on HD DVD ahead of what they say could be the biggest holiday season ever for DVDs.

As the stock exchanges prepare to release their monthly short interest reports this week, Wall Street is waiting with more anticipation than usual.

Toy maker Mattel Inc was sued on Monday in an attempt to force it to set up a fund to pay for testing children who may have been exposed to lead poisoning from its toys, according to a Los Angeles-based attorney.

Shares of BlackBerry maker Research In Motion Ltd. moved higher on Monday after another analyst said the company is undervalued at its current share price and boosted his outlook for RIM's subscriber growth.

The U.S. mortgage industry took another battering on Monday, as Capital One Financial Corp said it will shut a lending unit it bought less than a year ago, while two mortgage companies took steps to bolster liquidity as losses piled up.

U.S. blue-chip stocks rose on Monday after reversing direction in the last hour of trade as the flight to safety into short-dated Treasury bills flagged, suggesting concerns over the stability of credit markets were receding.

The top executives of Cisco Systems Inc. and Microsoft Corp. said on Monday that they would ensure their products work together, seeking to prevent customers from putting off buying decisions.

U.S. casino operator Trump Entertainment Resorts Inc. has made diversifying beyond Atlantic City, New Jersey, a priority and is closing in on its first deal, its chief executive said on Monday.

Thornburg Mortgage, Inc. (NYSE: TMA) announced Monday that it has sold a substantial portion of its assets and a reduced its borrowings amid a liquidity and financing crunch which forced it to stop taking new loan applications last week.

Stocks fell on Monday, led by losses in financial companies, as worries about spillover from the subprime mortgage market lingered despite the Federal Reserve's surprise discount rate cut on Friday.

Struggling mortgage investor Luminent Mortgage Capital Inc and home loan lender Thornburg Mortgage Inc took steps to bolster liquidity on Monday, but the companies signaled the trouble is not completely gone.

Calm returned slowly to financial markets on Monday, but there were lingering signs that credit problems persist despite policy-makers' insistence that the global economic growth would remain solid.

Indian Prime Minister Manmohan Singh's government is struggling to weather a crisis as communist allies threaten to end support over a nuclear energy deal with the United States.

KKR Financial Holdings LLC, a specialty finance firm, on Monday said it planned to sell about $500 million in stock, but could take a $200 million charge from mortgage bond-related losses and be forced to change its tax status.