It was on Tuesday as well that Toyota Motor Corp leapt passed Ford as the No. 2 automaker in monthly sales for July.

In a filing with the U.S. Securities & Exchange Commission, Ford said it was widening its net loss by $131 million to $254 million, or 14 cents per share as the automaker raised its estimates for its pension curtailment loss.

Ford had reported $205 million in such costs previously in its second-quarter results last month.

The increase is related to the impact of early retirements, enhanced benefits and other aspects of the ongoing job cuts in North America, Ford spokeswoman Becky Sanch said.

On July 20, the No. 2 automaker reported its net loss was $123 million, or 7 cents per share, compared with a profit of $946 million, or 47 cents per share, a year earlier.

At that time, Ford said the unexpected loss was due to fewer sales of large sport utility vehicles and one-time employee buyout costs. The results prompted the automaker to promise that it would announce more cost-cutting measures within two months.

In its filing on Wednesday, Ford said its full-year 2006 pension curtailment expense is now estimated at $1.2 billion, up from $1 billion, with full-year 2006 special items to be $3.8 billion.

The company also said it now expects its luxury unit Premier Automotive Group, which includes Volvo, Jaguar, Aston Martin and Land Rover, will be unprofitable in 2006, based on recent sales trends. Previously, Ford said it would be profitable, but close to breaking even on a pretax basis, excluding special items.

Ford shares fell 4 cents in extended trading after closing at $6.96, up 38 cents, on the
New York Stock Exchange.

M&A EXPERT HIRED AS ADVISER TO CEO

In a sign of its deepening problems, Ford has brought it an outside expert to help turnaround its ailing operations.

Ford began a restructuring plan six months ago that includes closing 14 plants and cutting up to 30,000 factory jobs in North America to return the region to profitability.

Leet, who led mergers and acquisitions teams at Goldman Sachs Group Inc. and Bank of America Corp., will report to Bill Ford, who is under pressure to take dramatic restructuring steps.

Ford spokesman Tom Hoyt said Leet is coming on board to help review the automaker's overall business.

"Bill Ford has said that everything is on the table," Hoyt said. "We are reviewing the business. This doesn't change that."

Goldman Sachs analyst Robert Barry said, "Ford has been under pressure to take more drastic actions given its crosstown rival has been announcing big cost cuts and asset sales."

Ford is facing challenges overseas as well, particularly in the money-losing British luxury car unit Jaguar that it bought in 1989.

In an interview with Reuters on July 20, Bill Ford said Jaguar would take time to turn around, but he was considering all options for the brand.

Investors have long speculated that Ford may also spin off its finance arm, Ford Motor Credit, which has seen borrowing costs rise after its debt ratings were cut to junk status.

But Ford's spokesman Hoyt said Ford has no plans to sell the unit.

Analysts said Tropical Storm Chris, the third named storm of the Atlantic hurricane season, was the main driver of oil's rally, while unresolved conflicts in the Middle East added support.

"Despite reports that Chris is weakening now, there is still every possibility that it will gather strength and threaten the rigs in the Gulf of Mexico," said Tobin Gorey, a commodities strategist with the Commonwealth Bank of Australia.

"Oil companies are taking no chances and are likely to evacuate their rigs over the weekend so there will be some disruption. If damage caused by the storm becomes severe, prices could just shoot past all major resistance points."

Tropical Storm Chris, headed from the Caribbean, has weakened slightly, after the Miami-based National Hurricane Center said on Wednesday it could strengthen into the season's first hurricane.

Hurricanes last year shut in a quarter of U.S. crude and fuel output and sent oil to then-record highs. Around 12 percent of the U.S. Gulf of Mexico's 1.5 million barrel-per-day (bpd) oil output is still offline.

Fuelling bullish sentiment, U.S. government data released on Wednesday showed crude oil stocks fell by a higher-than-expected 1.8 million barrels to 333.7 million barrels last week.

However, gasoline inventories, which had been expected to fall, were stable, dipping only 100,000 barrels, against expectations of a 1.6-million barrel draw. U.S. gasoline demand in the past four weeks still averaged 1.6 percent above the same period last year.

High crude oil prices have had some impact on U.S. economic growth but the pain is not on the level seen during the energy price shocks of the 1970s, U.S. Energy Secretary Sam Bodman said on Wednesday.

TENSE

In the Middle East, the situation remains tense as hostilities between Israel and militant group Hizbollah raged on in Lebanon despite efforts by the international community to produce a ceasefire.

Hizbollah fired more rockets into Israel on Wednesday than on any other day in a war that has entered its fourth week, while Israeli jets continued to pound the guerrilla group's Beirut stronghold. Traders fear the conflict could spread to Middle East oil producers.

Adding to worries over supplies, an Iraqi pipeline carrying crude from the country's northern oilfields to Turkey's Ceyhan port was bombed on Monday, pushing back the planned restart of exports along the route.

Concerns over Iran persisted as President Mahmoud Ahmadinejad insisted on the country's right to produce nuclear fuel, despite a United Nations resolution demanding that Tehran suspend its nuclear activities by August 31 or face the threat of sanctions.

Matus expects U.S. economic growth in the second half of this year to be slowed by about three-quarters of a percentage point due to the direct effects of softer housing investment.

Nearly all recent measures of housing activity have pointed not just to a slowdown, but to a struggling sector. Sales are sliding, supply is swelling and price appreciation is abating.

Many analysts view the housing market as a key factor in
Federal Reserve policy. With a slower housing market, growth in the United States should level off as well, which may set the stage for a halt to the Fed's two-year program of monetary tightening.

The next Fed policy-making meeting will be on August 8.

INTEREST RATES SLIDE

It was the third straight week that overall mortgage activity slumped, despite a decline in interest rates during that period.

Last week, borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.62 percent, down 0.07 percentage point from the previous week, and 0.19 percentage point below the 6.81 percent rate in the first week of July.

The MBA's seasonally adjusted purchase index tumbled for the third straight week, falling 3.3 percent to 376.2, its lowest since November 2003.

The purchase index, widely considered a timely gauge of U.S. home sales, is standing well below its year-ago level of 494.5, a drop of nearly 24 percent.

The group's seasonally adjusted index of refinancing applications increased 2.3 percent to 1,417.2, down 37 percent from a year ago when the index stood at 2,250.3.

The refinance share of applications increased to 37.0 percent from 35.6 percent the previous week. Fixed 15-year mortgage rates averaged 6.28 percent, down from 6.31 percent the previous week.

ADJUSTABLE SHARE AT 2-YEAR LOW

Adjustable-rate mortgages, known as ARMs, have been a refuge for cash-strapped consumers seeking to buy a home with low initial mortgage payments.

But with the U.S. Federal Reserve raising interest rates for two years straight, many of these homeowners will face a sharp increase in their monthly payments when their ARMs eventually reset.

As this transpires, an increase in loan delinquencies and home foreclosures is expected, which analysts say may weigh heavily on the housing market.

Rates on one-year ARMs decreased to 6.18 percent from 6.25 percent. The ARM share of activity fell to 27.8 percent of total applications -- its lowest since March 2004 -- from 28.6 percent in the prior week.

After historically low mortgage rates fueled a five-year housing boom, most analysts agree that the market is cooling off from its record run.

"The cooling in housing could last for a year or two," said Matus. "But remember, even when mortgage rates were at 18 percent, people were still buying new homes, so there is a natural trend of demand for housing and it takes a lot more than what we have seen so far to push around that natural trend."

Signs of a cooling market have been more evident in the past few weeks as a deluge of data showed an excessive supply of homes, declining sales and falling prices.

The MBA's survey covers about 50 percent of all U.S. retail residential mortgage loans. Respondents include mortgage bankers, commercial banks and thrifts.

"I analyze everything," he said.

Nitrogen has been used for years in the tires of race cars, large commercial trucks, aircraft and even the space shuttle.

But it is finding its way into the mainstream at a growing number of tire dealers - including Costco Wholesale Corp.

Nationwide, fewer than 10 percent of tire dealers offer nitrogen, but the number is growing, said Bob Ulrich, editor of Modern Tire Dealer magazine in Akron, Ohio. Most dealers charge $2 to $5 per tire for the nitrogen fill-up, he said. The dealers generally offer free lifetime refills.

Bourque got his tires - filled with nitrogen - in Waterville, Maine at Tire Warehouse, which has 50 tire dealerships across New England. The nitrogen was part of an installation package when Bourque bought a set of tires.

Skeptics will question how much can be gained by filling tires with pure nitrogen when the air we breathe is 78 percent nitrogen.

The differences are subtle, but important, said Steve McGrath, Tire Warehouse's vice president of marketing in Keene, N.H.

Nitrogen molecules are bigger than oxygen molecules, so nitrogen seeps out more slowly from tires than air; nitrogen resists heat buildup better than air, which contains moisture; and nitrogen reduces oxidation, which can damage the tire from the inside out, proponents say. Nitrogen is an inert gas, so there are no safety or environmental issues.

Those advantages are important in vehicles equipped with tire pressure monitoring systems, which are sensitive to changes in tire pressure, McGrath said.

With or without nitrogen, proper inflation is the key to improving gas mileage. Motorists can improve gas mileage by 3.3 percent simply by keeping their tires properly inflated, according to the U.S.
Department of Energy.

In the real world, though, only 1 in 5 motorists check tire pressure regularly, according to the Rubber Manufacturers Association. Nitrogen, therefore, could have an advantage for those who don't check their tire pressure regularly.

The National Highway Traffic Safety Administration has no opinion on nitrogen, but it does encourage motorists to keep their tires properly inflated, both for safety and to boost gas mileage, said spokesman Rae Tyson. Severely underinflated tires are dangerous, especially for sport utility vehicles and light trucks, Tyson noted.

Tire experts at Consumers Union, publisher of Consumer Reports magazine, neither endorse nor object to the use of nitrogen in tires.

"Nitrogen is certainly safe to use in tires, and theoretically it does offer some benefits," spokesman Douglas Love said from Yonkers, N.Y.

For Bourque, his tire pressure remains constant - 40 pounds for his fully loaded truck - even on hot days when tire pressure normally fluctuates.

His gas mileage was about 19 mpg when he purchased his five-cylinder 2005 Chevrolet Colorado. Now, with the engine broken in and new tires filled with nitrogen, he gets 20.5 to 22 mpg depending on whether he runs the air conditioner, he said.

For tire dealers, the nitrogen generator and associated equipment typically runs between $3,000 and $12,000, Ulrich said.

Marty Mailhot, manager of the Tire Warehouse in Topsham, said the idea is catching on with consumers, who are purchasing nitrogen for tires for cars, trucks, motor homes and lawn tractors. He has even tried it on footballs and inflatable tubes pulled behind boats.

He has a retort for those who pooh-pooh the notion of paying for nitrogen when there's plenty of free air for the taking.

"I say, 'Why are you drinking that bottled water when there's a pond out back?'" he said.