Tuesday morning headlines

Market opens mixed: Not a lot of action going on, despite comments by Fed Chairman Bernanke and leaks of the stress test results.

Bernanke says recovery is near: The Fed chairman tells Congress that the recession appears to be losing steam, and that (slow) growth will likely to resume later this year. (AP)

Stress grades: Ten of the 19 banks being tested will probably have to boost their capital levels, the WSJ is reporting. That would create a stronger buffer against future losses.

The stress-test regimen appears so far to have eased some of the fears that swept through financial markets in February, just as President Franklin D. Roosevelt's bank holiday did in 1933. He shut down the nation's banks for several days during a banking panic and only reopened those the government deemed safe. One possible explanation for the recent, calmer state of affairs: The problems the tests appear to be uncovering aren't as bad as some analysts' worst expectations. Also, if multiple banks are being directed to boost their capital, that could make the process seem less daunting than if it were singling out a few companies as weak.

Housing crunch: Guaranty Bank of Austin decided it would be cheaper to demolish a 16-unit tract under construction in Victorville than to try and sell the homes in this kind of market. From the LAT:

Victorville city spokeswoman Yvonne Hester said the bank decided not to throw good money after bad. "It just didn't pencil out for them," she said. "They'd have to spend a lot of money to turn around and sell the houses. They just made a financial decision to just demolish them." The development was in a part of town remote even for Victorville, a wind-swept high desert city of about 100,000 residents. A dozen of the homes were in various stages of construction. Some had frames erected, and a few others had drywall hung, said Jorge Duran, Victorville's code enforcement manager.

Santa Anita sale is cleared: Magna Entertainment, which owns the Arcadia race track and is trying to pay down debt, needed to get the approval of a federal bankruptcy judge. Santa Anita is in its off-season, but racing will begin again in October. (LAT)

DirecTV in merger: The El Segundo satellite TV company that media mogul John Malone owns a big stake in will hook up with Malone's Liberty Entertainment. The convoluted deal (is there any other kind with Malone?) will make it easier for DirecTV to be put up for sale. From the WSJ:

The earlier structure also impeded deal-making because the ownership wasn't in one place as a tangible currency and Liberty Entertainment was a tracking stock, rather than asset-based stock. No money will change hands under the deal, but by transferring Liberty Entertainment's shares of DirecTV into the combined entity, Mr. Malone will have a smaller holding but in a company that Liberty hopes will garner a higher market value.

Little change in gas prices: An average gallon of regular in the L.A. area is $2.343, up less than a penny from last week, according to the government's latest survey.

Broadcom starts tender: After Emulex turned down a $764 million offer, OC-based Broadcom is reaching out to shareholders. Emulex shares are up today, so maybe traders are convinced that a higher bid is in the works. (Tech Trader)

C-17 included in bill: House lawmakers will include $2.2 billion in the Pentagon's war spending request to buy as many as eight cargo planes made by Boeing (and made in Long Beach). Defense Secretary Robert Gates has recommended that the program be terminated. (LAT)

Lacter on radio: This morning's business chat with KPCC's Steve Julian covers the variance of unemployment rates in L.A. County and why population growth in California is slowing. Also on kpcc.org and on podcast.