Dow Passes 10,000

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. “Consumer spending and borrowing, as well as employment, are expected to remain sub-par for some time.” The Post concedes that  while investors and big banks may be feeling settled, the rest of America is waiting for employment to bounce back. The paper says, “For most Americans, a real recovery comes down to one issue: jobs. With the U.S. unemployment rate at 9.8 percent and expected to crest above 10 percent, 15 million jobless Americans may find little to cheer about in Dow 10,000.”

Another reason to hold off on celebrating: The number of foreclosure filings hit a record high in the third quarter, says CNNMoney.com. One in every 136 U.S. homes was in foreclosure, “which is a 5% increase from the second quarter and a 23% jump over the third quarter of 2008.” Nevada is still the hardest-hit state with one filing for every 23 households. Vermont saw foreclosure filings jump nearly 170 percent compared with the third quarter of last year. A spokesperson from RealtyTrac, the online marketer of foreclosed homes, told the Web site, "They were the worst three months of all time."

The New York Times checks in on the state of bailout paybacks this morning. The article explains that while 10 big financial institutions repaid nearly $70 billion in June, several other firms were able to but did not. There’s a debate brewing about whether federal bank regulators should “send a signal” encouraging the big banks to pay up. “That would be a big change from the reluctance that Treasury officials displayed for much of this year, when they wanted to make sure that banks had enough capital to shore up confidence in the financial system and to handle their own losses,” the paper notes.

Microsoft (MSFT) has been busy these days. While it’s been trying to build buzz for its new Windows 7 operating system, which goes on sale next week, the company is also planning to “quietly” unveil its first retail stores. According to the Wall Street Journal, the software giant is following through on a plan announced in February to build stores to better compete with Apple (AAPL). The company is “putting the final touches” on a new store in Scottsdale, Ariz., and plans to open up a second store in a California mall very soon.

Dealmaker Bruce Wasserstein, chairman and CEO of Lazard Ltd (LAZ), died yesterday at the age of 61, the New York Times reports. Wasserstein’s career intersected with law and media, but he made a name for himself as an investment banker “who helped pioneer the hostile takeover in the 1980s and reshaped the mergers and acquisitions business into a high art.” He worked on some of the biggest deals in recent Wall Street history, and lately, he had been leading a team advising Kraft (KFT) on its potential takeover of Cadbury (CBY).

According to the Journal, analysts and lawmakers are speaking out against the cost of usefulness of the credit for first-time home buyers. The stimulus measure, which was adopted in February and is scheduled to expire in November, gives first-time home buyers an $8,000 tax credit. Some people want only a one-month extension of the program or none at all. The paper says, “A number of House Democrats, however, are expressing reservations about a big extension or expansion of the credit, particularly one that isn't offset with tax increases or spending cuts.” On the flip side, supporters of the credit would like to extend it at least to next summer and make it available to all home buyers.