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One day after big gains, the stock market was down with its worst drop in six months, reports the Washington Post. Thursday, investors thought that rising consumer spending levels were shoring up the economy and the GDP. Friday, new economic data showed the biggest spending decline in nine months. In other words, the comeback is on hold, at best.

Yesterday Google (GOOG) announced its plans to offer free mobile GPS, reports the New York Times.

Maurice Greenberg, the ex-chief of American International Group (AIG), “has been quietly building up a family of insurance companies that could compete with AIG,” according to the New York Times. The new venture called C.V. Starr & Co. will be staffed by some of Greenberg’s former employees.

In his weekly radio address yesterday, President Obama mentioned the importance of small businesses, noting the difficulty too many small companies are still facing in finding loans. "While credit may be more available for large businesses, too many small-business owners are still struggling to get the credit they need," he said.

A resurgent stock market on Thursday couldn't undo the sour mood on Wall Street after executives of the most powerful financial firms in the world learned the inevitable—new pay cuts are on the way.

If you think tougher government oversight will avert future financial calamities, think again. That was the message in a stunning rebuke of Big Finance on Tuesday by Bank of England Governor Mervyn King, who "made a strong call for the breaking up of some of the world's biggest financial firms," the Wall Street Journal reports. King did not mince words.

It may be a bit too early, but the Wall Street Journal this morning wastes no time in lining up the winners and losers of health care reform. The list is hardly a surprise. "The drug industry stands to gain in a health-care overhaul by getting tens of millions of newly insured customers, while insurance companie—especially those that cater to the individual market—look like they are in for a tougher time," the newspaper writes.

Much has been made of President Obama’s desire to fundamentally restructure large portions of the federal bureaucracy—but what if he runs out of money first? The Washington Post reported that the federal budget deficit, at $1.4 trillion for this fiscal year, is, “unequaled in the postwar era.” Democrats, the paper notes, are defending Obama’s budget, believing George W. Bush and the financial collapse left him no choice but to spend his way out of an economic death spiral.

The Wall Street Journal and the Washington Post lead with stories about the state of the recovery, prompted by the fact that yesterday marked first time the Dow passed 10,000 since October last year. Though noting that the Dow has gained 53 percent in just seven months, the WSJ says to hold the Champagne: “The underlying economy is troubled, with banks still holding bad debts and foreclosures widespread,” the article cautions.

In what the New York Times calls a “stunning reversal,” Bank of America’s (BAC) board has decided to reveal the legal advice that the bank received around the time of its merger with Merrill Lynch.

Pension funds for police officers, teachers, and other government employees were particularly destroyed by the downturn, the Washington Post reports. According to the article, within 15 years, public systems on average will have less half the money they need to pay pension benefits. The need to make up for recent losses puts public pension funds in a tricky spot: They must often choose between cutting retirement benefits or pursuing high-risk, high-return investments.

Could another massive government-backed mortgage lender go bust? The fear in Washington is that the Federal Housing Authority could "be the next housing domino," the New York Times reports this morning, leading off its business coverage. FHA Commissioner David H.