Today's P.M. News Roundup

“Stocks lost their footing after an early rally Tuesday as Wall Street continued to wrangle with the scope of the inflation threat,” The Wall Street Journal reports.

Former Federal Reserve Chair Alan Greenspan said, “I still believe there is a greater than 50 per cent probability of recession,” and that the question of whether economic conditions would worsen depends on the housing crisis.

Anheuser Busch and Belgian brewer InBev may start merger talks on Tuesday. The Belgian brewer of such brands as Beck's and Stella Artois sees Anheuser as a way to break into the U.S. market, and is considering a bid of $65 per share.

The U.S. car industry is expected to have the worst year in a decade—possibly sparking a domino effect across the rest of the economy. “With less money available to bolster the industry’s growth, the businesses that support it are also facing the prospect of a sharp slowdown,” writes The New York Times.

Merrill Lynch wrote, in a report titled “US Green Light for the GCC,” that the oil economies of the Gulf Cooperation Council will likely depeg their national currencies from the U.S. dollar and move to a basket of currencies. The U.S. government, according to the investment bank, feels more confident about the greenback and is not as reliant on the Gulf economies for support.

“Republican presidential candidate Sen. John McCain (R-AZ) calls for a new arms agreement with Russia that finds ways to reduce the number of nuclear missiles, and suggested that the United States and Russia should jointly cut non-nuclear weapons as well,” according to NPR.

Ill. Sen. Barack Obama and Ariz. Sen. John McCain campaigned in New Mexico on Monday. Neither of the two presidential contenders “used the solemn day to launch political attacks, despite the increasingly sharp-edged comments from both camps about foreign policy experience,” writes The Washington Post.

The Government Accountability Office concluded that U.S. ports are more susceptible to terrorists than previously believed, mainly because certain protocols are not being followed in international ports. The G.A.O. determined that Customs simply cannot handle the workload, and private contractors might be the better solution.

The Supreme Court ruled today 7-2 in favor of workers who say they were fired because of retaliation stemming from race and age discrimination.

A chain of tornadoes ripped through Minnesota and Iowa over the holiday weekend. St. Paul suburb Hugo sustained $25 million in damages to personal property. Two-year-old Nathaniel Prindle was killed when winds blew him into a neighbor's swimming pool. Fifty homes were destroyed and 159 homes were damaged.

The University of Texas’ 2004 decision to return to an affirmative action–based admissions policy is “being challenged in federal court,” writes The Chronicle of Higher Education.

Long Island businessman Morris Talansky’s testimony on Tuesday revealed that “he gave Prime Minister Ehud Olmert $150,000 out of his own pocket,” according to The Jerusalem Post. Talansky declared that he never received anything in exchange for the money he provided Olmert. His cross-examination will take place on July 17.

According to the Associated Press, “Chinese officials rushed Tuesday to evacuate another 80,000 people in the path of potential floodwaters building up behind a quake-spawned dam as soldiers carved a channel to try to drain away the threat.”

Myanmar’s ruling junta renewed house arrest for opposition leader Aung San Suu Kyi, sparking further criticism of the military regime after misappropriating foreign aid. “The extension was issued despite a Myanmar law that stipulates no one can be held longer than five years without being released or put on trial,” writes the Associated Press. The junta has detained 20 members of Suu Kyi’s opposition party.

At least 16 were wounded in a gunfight in Beirut between supporters of Hezbollah and backers of the Lebanese government. Officials said that the scuffle arose after insults were yelled by both sides “as Hezbollah supporters drove by waving flags and saluting Hezbollah leader Hassan Nasrallah shortly after he finished giving a speech.”

Canadian Foreign Minister Maxime Bernier was “forced to resign” after admitting to leaving classified documents about a NATO summit at the apartment of his girlfriend, Julie Couillard. According to Canadian daily paper The Globe and Mail, Couillard “has ties to criminal biker gangs.”

China is pushing to evacuate 80,000 people near the trajectory of possible flooding from a dam created by the May 12 earthquake. This would bring the “the number of people moved out of the threatened valley to 160,000.”

The Phoenix exploratory lander arrived on Mars on Sunday. The main goal of the mission is to sample deep-ground Martian ice to test for signs of organic molecules and whether liquid water existed.

Film director Sydney Pollack died at the age of 73 after a long battle with cancer. The winner of multiple Oscars, he was at the helm of many classic movies including “Out of Africa,” “The Way We Were” and “Tootsie.” More recently, he collaborated with British director Anthony Mingella on “Cold Mountain” and “The Talented Mr. Ripley.”

Geremi Gonzalez, former pitcher for the Chicago Cubs, New York Mets, Tampa Bay Rays, Boston Red Sox and Milwaukee Brewers, was killed by a bolt of lightning in his native Venezuela on Sunday. The Chicago Tribune writes, “Gonzalez played for current Cubs manager Lou Piniella in Tampa Bay and was on the mound when Sammy Sosa's corked bat exploded in a game at Wrigley Field on June 3, 2003.”