12:30PM European markets closed sharply higher.
European markets recovered from yesterday’s decline to close notably higher on easing interest-rate concerns, following weaker-than-expected U.S. jobs data and well received corporate news from Anglo-American and Philips. Anglo American climbed 4.8% after announcing it would return $5 billion to shareholders and a 52% rise in adjusted operating profit. Philips Electronics rose 1.7% after agreeing to sell 80% of its semiconductor unit to a consortium of private-equity investors led by Kohlberg Kravis Roberts & Co. The British pound rallied 1% vs. the dollar. The German DAX 30 surged 1.5%,the French CAC 40 rose 1.2%, and London FTSE 100 gained 0.9%.

Oil prices retreated as fears that the tropical storm in the Gulf of Mexico could damage facilities receded. Light crude September delivery fell 30 cents to $75.16 a barrel. London Brent gained 6 cents to $76.62. The dollar dropped versus major currencies. The euro traded at $1.2894, up from $1.2805. The dollar bought 114.20 yen, down from 114.91. The British pound stood at $1.9093, up from $1.8883. European gold prices advanced. In London the precious metal traded at $648.50, up from $642.25 per ounce. In Zurich gold traded at $651.25, up from $644.35. Silver closed at $12.36, up from $12.03.


11:30AM Financial and housing stocks led gainers.
The U.S. stock markets showed considerable strength in early trading on Friday, as weaker-than-expected employment data helped to ease concerns about higher interest rates. However, the three major averages retreated from their highs for the session on profit taking. Concerns about the strength of the economy and weakness in the oil sector helped to limit the upside move. Interest-rate sensitive financial and housing stocks supported market sentiment, posting significant gains. Shares American Express Co. (AXP: chart), the No. 4 U.S. credit card issuer, gained 1.1%. Bank of America Corp. (BAC: chart), the parent of the No. 2 U.S. bank, helped lead the S&P 500''s advance with a rise of 1.3%. Shares of American International Group Inc. (AIG: chart), the world''s largest insurer, gained nearly 1% lifting both the Dow and the S&P 500. Among homebuilders, KB Home (KBH: chart) gained 1%, helping the Dow Jones index of home builders'' shares jump 1.5%.


10:30AM The Indian Sensex falls in a volatile trade under heavy selling pressure.
The Sensex in India declined 56.65 points, or 0.52%, to 10,866.51. It traded in the range of 229 points during the day’s trading session, with a high degree of volatility. The market-breadth was weak as 1,354 shares fell, 1,068 advanced and 94 shares were unchanged. The turnover on BSE came to Rs 2,540 crore lower than Thursday’s Rs 2,938 crore.

Reliance Energy led the gainer, climbing 2.90% to Rs 467.75 on 1.66 lakh shares. Engineering large-cap, BHEL jumped 2.30% to Rs 2,167 on 1.67 lakh shares while housing finance company HDFC gained 1.61% to Rs 1,246. Cellular services large-cap, Bharti Airtel, advanced 0.16% to Rs 399.45 on 3.97 lakh shares after the firm on Thursday said that it had given a $107 million outsourcing contract to IBM spread over the next five years.

Pharma large-cap Ranbaxy gained 1.30%, to Rs 397.05 on 9.07 lakh shares. The company announced on Friday that it had received a tentative approval from the U.S. Food and Drug Administration (FDA) for risperidone oral solution. Risperidone is used to treat schizophrenia. Software stocks hardened, following a steady trend in their ADRs. Infosys gained 0.59% to Rs 1,680 and TCS gained 0.51% to Rs 948.25. Bajaj Auto rose 1.46% to Rs 2,611.35 and Grasim rose 1.35% to Rs 2,145.00.

Reliance Industries shed 2.20%, to Rs 966.75 on 24.86 lakh shares. Private energy companies such as Reliance have higher operating costs than government controlled companies such as ONGC and Indian Oil. The Petroleum Minister Murali Deora commented that the government will not provide subsidy to private petrol retail companies. Reliance Industries, one of the largest private operators has suffered sales decline of 80% in less than a year on higher petrol price at retail pump stations. On another account, there are reports that the company will introduce three fibres in the next 15 months. Reliance Industries led the list of most active stocks on BSE with a total turnover of Rs 243.68 crore followed by Tata Steel with Rs 123.64 crore and SBI with Rs 102.37 crore.

Great Eastern Shipping was subject to volatile trading throughout the day. From its low of Rs 210.65, it soared to Rs 225.80 due to strong buying backed by rumours that the company, after calling off the proposed de-merger, may announce a share buy-back, or a bonus or a special dividend. The stock closed 2% higher to Rs 225 on high volume of 11.87 lakh shares.

SBI led the decliners, down 2.90% to Rs 806.25, Cipla fell 1.75% to Rs 228.85, ITC dipped 2.05% to Rs 168 and ICICI Bank lost 1.60% to Rs 547.05. The bank sector finished in the red. PNB declined 4.60% to Rs 367, Allahabad Bank was off 4.23% to Rs 64.45, IOB declined 3.37% to Rs 87.50, Bank of India lost 3.55% to Rs 115.40 and Union Bank of India sank 3.72% to Rs 101. Hindustan Lever also fell 2.02% to Rs 220.25.

Among companies not on the Sensex, AIA Engineering soared 9% to Rs 690 on registering 95% net profit for Q1 June 2006 to Rs 15.29 crore in Q1 June 2006 compared to Rs 7.82 crore in Q1 June 2005. Net sales during the period increased to Rs 92.04 from Rs 61.06 crore. Amara Raja Batteries jumped 9.69%, to Rs 343.45 on registering 193% growth in net profit and Amtek Auto jumped 3.50% to Rs 291.10 on reports that Warburg Pincus has taken over 9% stake in the company through the open market.


9:45AM Stocks rallied at opening on weak jobs data.
Stock markets sharply rose at opening due to significant buying in the first half hour of trading. The positive sentiment was generated by weaker-than-expected July employment growth which raised hopes that the Federal Reserve will halt its interest rate hikes. This sent treasury yields lower and prompted a rally in the home building sector. DR Horton (DHI: chart) was the best performer in the group, rising more than 7%, Pulte Homes (PHM: chart) posted an advance of more than 5%. Even Hovnanian (HOV: chart) recovered from early weakness and climbed more than 3%, despite its profit warning. The easing interest rate concerns also contributed to strength among financial stocks, with brokerage stocks posting some particularly strong gains, led by TD Ameritrade (AMTD: chart) and E*Trade (ET: chart). Some transportation stocks also posted strong gains, led by Landstar System (LSTR: chart), up 2.3%. Among other gainers, Medco Health Solutions Inc. (MHS: chart), the pharmacy benefit manager, rose 2.4% after profits jumped 26%, beating analysts’ forecasts.

The tech sector came under modest pressure after Apple Computer Inc. (AAPL: chart) said it would have to restate earnings reports due to irregularities related to stock-option grants. The stock dropped 3.5%. Gateway Inc. (GTW: chart) lost 6.9% as the computer maker swing to a loss for the quarter due to shrinking profit margins and slow sales. In the first hour of trading, the Dow Jones industrial average rose 65.54, or 0.58%. The Standard & Poor''s 500 index added 8.87, or 0.69%, and the Nasdaq composite index gained 21.18, or 1.01%. Bonds surged on the jobs report, with the yield on the benchmark 10-year Treasury note falling to 4.90% from 4.96% late Thursday.

9:00AM Stock futures advanced on weaker-than-expected jobs data.
U.S. stock futures reversed from earlier losses to move sharply higher after weaker-than-expected July jobs data, adding to recent speculation that the Federal Reserve will pause its interest rate raising campaign at its next meeting on Tuesday. The data helped offset concerns from further options accounting trouble at Apple Computer and profit warning by Hovnanian. S&P 500 futures rallied 7.30 to 1295.50 and Nasdaq 100 futures hiked up 13.25 to 1,534.50 1,516.00. Dow industrials futures surged 68 points to 11360. Treasury prices rallied after the data, with the yield on the benchmark 10-year Treasury note falling 0.046 percentage points to a four-month low 4.905%.

In corporate news, Apple Computer (AAPL: chart) announced late Thursday it discovered further evidence of irregularities related to stock-option grants, warning hat it may have to revise profits back to September 2002. The stock dropped 3.4%. PC maker Gateway Inc. (GTW: chart) fell 7.6% on Inet after reporting a Q2 loss versus expected profits. Hovnanian Enterprises (HOV: chart) fell 5% on Inet as it lowered Q3 and fiscal 2006 earnings outlook due to slower sales pace and high cancellation rates on contracts in backlog. The company cut down 30 cents per share from its Q3 earnings outlook range and said 2006 earnings should range between $5.00 and $5.75 per share, from a previous range of $7.20 to $7.40 a share. Chiquita Brands (CQB: chart) climbed 14% after reporting earnings decline, but exceeded expectations. Wachovia upgraded the banana and produce company to outperform from market perform.


Non-farm payroll employment increased less than expected.
Friday morning, the Department of Labor released its report on the employment situation in the month of July, showing that the U.S. economy added fewer than expected jobs. The report also showed an unexpected increase in the unemployment rate. The Labor Department said that non-farm payroll employment increased by 113,000 in July compared to a revised increase of 124,000 jobs in June. Economists had expected the economy to add 150,000 jobs compared to the increase of 121,000 originally reported for the previous month. The increase in employment reflects job gains in several service-providing industries, including professional and business services, health care, and food services. Employment growth was also seen in the mining sector, although the manufacturing sector lost 15,000 jobs. The report also showed that the unemployment rate rose to 4.8 percent in July from 4.6 percent in June. The increase came as a surprise to economists, who had expected the unemployment rate to remain unchanged. Additionally, the report showed that average hourly earnings edged up by 0.4 percent in July to $16.76. Average weekly earnings also increased by 0.4 percent to $568.16.

Occidental Petroleum Corp, (OXY: chart), oil company, reported Q2 earnings of $1.97 per share, down from a year-ago profit of $3.77 per share. On a continuing operations basis, Occidental posted a profit of $2.77 a share, down from a year-ago equivalent earnings of $3.63 a share. On a core basis, earnings also totaled $2.77 a share, up from last year''''s profit of $1.96 a share. The latest core earnings exclude a net after-tax loss of $347 million in discontinued operations, reflecting an impairment charge related to an investment in Venezuela and income from Vintage Properties held for sale, while the year-ago core profit excludes a $619 million tax benefit and an $89 million gain from the sale of an investment. Revenue advanced to $4.6 billion from $3.39 billion in the same period a year earlier. The company missed analysts’ estimate for a profit of $2.79 a share. Occidental said its daily production from continuing operations rose to 609,000 barrels of oil equivalent, an increase of 93,000 barrels from its year-ago total. It said the latest results benefited from the higher production and robust crude oil prices.