Andrew Torgan
CNN Financial News Producer

Former Treasury Secretary Henry Paulson, testifying today before Congress for the first time since leaving office, defended his role in salvaging a controversial deal struck during the height of the financial crisis last fall.

Lawmakers grilled Paulson about whether he overstepped his authority in pushing Bank of America to follow through on its takeover of troubled brokerage Merrill Lynch - a deal which wound up costing taxpayers billions of dollars.

Paulson testified before the House Committee on Oversight and Government Reform, whose members have already questioned the chiefs of Bank of America and the Federal Reserve.

Bank of America's purchase of Merrill Lynch last September was trumpeted as good news, especially when compared to the near-simultaneous bankruptcy of Lehman Brothers.

Yet the deal later nearly collapsed, only to be rescued by billions of taxpayer dollars and government intervention, the full extent of which had not fully surfaced until officials started investigating earlier this year.

Jobless claims at 6-month low

The number of Americans filing first-time claims for unemployment insurance fell to the lowest level in six months last week, coming in well below estimates, but the drop may be attributable to quirks in the auto industry rather than improvement in the economy.

There were 522,000 initial jobless claims filed in the week ended July 11, down 47,000 to from a revised 569,000 the previous week, the Labor Department said.

Additionally, the number of Americans continuing to receive unemployment insurance for one week or more dropped by 642,000 to 6.27 million – according to the most recent data available.

1.5 million homes in foreclosure

The foreclosure plague is not going away. In fact, it's only getting worse.

A record 1.53 million properties were in the foreclosure process – default notices, auction sale notices and bank repossessions - during the first six months of 2009. That was 9% more than the previous six months and 15% more than the same period of 2008, according to a report released today by RealtyTrac.

And, in a bad sign for a housing recovery, there was no recorded improvement in June, the last month of the cycle. More than 336,000 homes reported foreclosure filings, the fourth straight 300,000-plus month. Filings were up 33% over last June and nearly 5% compared with May.

JPMorgan earns $2.7 billion

JPMorgan Chase once again proved that it’s been one of the better-run banks during the financial crisis today after reporting quarterly results that blew past Wall Street estimates.

Buoyed by a solid performance in its investment banking division, the company said second-quarter profits rose 36% from a year ago to $2.7 billion.

On Tuesday, rival Goldman Sachs also crushed estimates, posting a quarterly profit of $3.4 billion.

CIT on the brink

The small business credit market is about to take another major hit.

Six weeks after Advanta abruptly froze all of its 1 million credit-card accounts, lending giant CIT Group faces potential bankruptcy.

The ailing company announced late Wednesday that it would not receive government assistance. There is "no appreciable likelihood of additional government support being provided over the near term," the company said in statement.

CIT’s board and executives are no said to be evaluating alternatives.

CIT was historically the biggest issuer of Small Business Administration-backed loans, topping the agency's lender list year after year. But in the wake of the credit crisis that followed Lehman Brothers' September collapse, CIT's lending came to a standstill.

Gas drops below $2.50 per gallon

Gas prices are back below $2.50 per gallon for the first time since May, dropping 1.2-cents overnight to $2.492.

In the last 25 days, the average price has decreased 20.1 cents, or 7.46%. The average price of a gallon of gas is also down $1.62, or 39.4%, from the record high price of $4.114 that AAA reported on July 17, 2008.

The highest gas prices are in Hawaii ($3.243). The cheapest are in Missouri ($2.245).