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CNBC's Domm: Today's Agenda in the Markets

Stock futures are perking up this morning after three sessions of selling. Housing starts for May are reported today and there are a few earnings reports to make headlines.

Home builder Lennar has already released news on a second-quarter loss and warned that it would probably have a loss in the third quarter because of uncertain conditions. Lennar lost $244.2 million, compared to $324.7 million in profit in the same period last year.

Nike and Oracle report profits after the bell.

FEAR FACTOR Worries that problems at Bear Stearns hedge funds could leak into the firm's core and spill onto other financial institutions shook Wall Street yesterday. The Dow was up 1%, or 128 points, in the morning before taking a turn on creeping worries and rumors about credit quality and subprime debt. Selling intensified as rumor mongering spread talk about a possible land mine at Bear. The rumors coincided with a Deutsche Bank conference call on Bear's hedge fund problem, and then speculation of all sorts circulated, including talk that a big hedge fund imploded.

Things calmed down toward the end of the session, and the Dow finished down just eight points but not before dipping deeply into negative territory.

The Nasdaq was off 11 points and the S&P 500 was off four points. Energy markets were also volatile yesterday, with oil sinking by $1.59 per barrel or 2.3% before moving back to barely changed levels, closing at $69.18 per barrel.

While the stock market reacted to rumors, CNBC's Rick Santelli said credit markets were calmer though there was some flight to quality in Treasury issues. Buying in the 10-Year resulted in a decline in the yield to 5.079% .

"There was a certain emotional duress that was tied to it in the credit markets last week. That wasn't present today (Monday). We'll monitor it day to day. You want to watch agencies against Treasuries for the next couple of days. That's your barometer. If there's a contamination of subprime into more important quality areas, the first line of defense is going to be against Fannie (Mae) and Freddie (Mac) agency paper. Those spreads widened Friday but were tighter on Monday," says Santelli.

STOCKS VALUATIONS ARE OK Vince Farrell, managing director at Scotsman Capital, says the stock market is fairly healthy all considered. We spoke to Farrell ahead of yesterday's downturn. "These valuations are still undeniably ok," says Farrell, a CNBC contributor. He said the market typically has three to five percent corrections with some regularity. "I think that should resume," he said.

But Farrell says there's lots of motivation for stocks to move higher. "I think earnings are going to continue to grow respectably and stock prices tend to mirror earnings growth when it's at a fair value," he said.

WASHINGTON V WALL ST For the first time in 10 years, all five SEC commissioners have been called before a Congressional committee, just as Congress is becoming increasingly interested in Wall Street as a new revenue center. Democrat Barney Frank's House Financial Services committee will discuss regulatory issues, hedge funds, corporate governance and one would assume that Bear Stearns recent problems will be discussed.

GOOGLE V MICROSOFT The battle continues. Google asks a judge to reign in its arch rival Microsoft and extend part of the four-year antitrust oversight of Microsoft. There is a regular hearing about the Microsoft case scheduled for today. Our Hampton Pearson will be covering.

NO DEALConoco Phillips reportedly is planning to walk away from its investments in Venezuela rather than agree to President Hugo Chavez's mandated government takeover of oil company assets.

FREE AGAIN Paris Hilton was released from jail last night.