12:30PM European markets ended lower.
European markets closed under the flat line. In a light trading session market sentiment was hurt by speculations that the European Central Bank will raise interest rates in a month after it kept them on hold at 3%, as expected, on Thursday. Several mixed earnings reports also contributed to the weakness. Mining and tech stocks like Anglo American and STMicroelectronics led decliners. The food and drinks sector was also under pressure after No. 1 distiller Diageo fell 2.5%. The U.K’s FTSE 100 dropped 0.4%, followed by the French CAC 40, down 0.3%, and the German DAX 30, down 0.1%.

Oil prices slipped after BP PLC officials said the company's Prudhoe Bay production could be restored earlier than expected. Light crude October delivery fell 33 cents to $69.70 a barrel. Gasoline fell 2 cents to $1.775 a gallon. Natural gas dropped 10 cents to $6.19 per 1,000 cubic feet. London Brent October delivery slipped 17 cents to $70.01. The dollar gained ground versus major currencies. The euro traded at $1.2806, down from $1.2829. The dollar bought 117.23 yen, up from 117.13. The British pound stood at $1.9021, down from $1.9035. European gold prices extended gains. In London the precious metal traded at $619.40, up from $617.60 per ounce. In Zurich gold traded at $623, up from $618.18. Silver closed at $12.47, up from $12.44.


11:30AM Stock markets rebounded from early strength.
U.S. stocks rebounded from earlier strength, as investors awaited a speech on productivity from Federal Reserve Chairman Ben Bernanke expected to provide new clues about inflation and interest rates. In early hours of trading, stocks were supported by news that core consumer inflation last month dropped to its weakest gain so far in 2006, adding to hopes that Fed Reserve rate hikes might come to an end soon.

Significant strength emerged in the gold sector due to an increase by the price of gold as well as news of Goldcorp''s (GG: chart) acquisition of Glamis Gold (GLG: chart). Glamis shares jumped 20%. Meanwhile, semiconductor stocks came under pressure, dragged by STMicroelectronics (STM: chart) after Citigroup downgraded its rating on the chip maker to ‘sell’ from ‘hold’. The health insurance, networking, and energy sectors also moved to the downside. Ford Motor Co. (F: chart) was also in focus as the carmaker said it is considering the sale of all or part of its Aston Martin luxury brand. In late morning trading, the Dow Jones industrial average was marginally lower, down 4.08, or 0.04%. The Standard & Poor''s 500 index lost 0.69, or 0.05%, while the Nasdaq composite index fell 1.14, or 0.05%.Bonds continued to move higher, with the yield on the benchmark 10-year Treasury note falling to 4.74% from 4.76% late Wednesday.

Industrial production slowed less than expected.
Thursday morning, the Department of Commerce released its report on orders for manufactured goods in the month of July, showing that orders fell less than economists had been expecting. The report showed that orders for manufactured goods fell 0.6 percent in July following an upwardly revised 1.5 percent increase in June. Economists had expected orders to fall 0.8 percent compared to the 1.2 percent increase originally reported for the previous month. The drop in factory orders came as orders for manufactured durable goods fell 2.5 percent in July following a 3.3 percent increase in June. The drop in durable goods orders was downwardly revised from the 2.4 percent decrease reported last week. An increase in orders for manufactured non-durable goods helped to offset the decrease in durable goods orders, with non-durable goods orders increasing 1.6 percent in July. The report also showed that shipments of manufactured goods were nearly unchanged in July after falling 0.1 percent in June, while inventories of manufactured goods rose 0.6 percent in July following a 0.9 percent increase in June. Subsequently, the inventories-to-shipments ratio edged up to 1.17 in July from 1.16 in June.


10:30AM The Sensex ends in the red due to expiry of derivatives.
The Sensex on BSE lost 24.87 points, or 0.21%, to close at 11,699.05. Index traded in a narrow range for most of the trading session. The market-breadth was weak as 1,688 shares declined, 827 advanced and 72 shares were unchanged. The turnover on BSE was Rs 2,758 crore compared to Wednesday’s Rs 2,717 crore. From the Sensex stocks, there were 11 advances to 19 declines. On National Stock Exchange total turnover was Rs 7,870 crores.

ITC, HDFC Bank, Reliance Petroleum and Tata Power advanced on short covering in the derivatives segment and due to expiry of futures and options contracts for August 2006. ITC climbed 2.2% to Rs 191.50, Reliance Petroleum surged 4.6% to Rs 66, HDFC Bank gained nearly 2% to Rs 857 and Tata Power advanced 1.2% to Rs 532.50. Some IT stocks also advanced, as IT large-cap Infosys rising 0.3% to Rs 1,805 and software company TCS edging up 0.6% to Rs 990. However, Wipro sank 1.8% to Rs 516 and Satyam Computer lost 1% to Rs 811.

PSL advanced 1.3% to Rs 201 after the company announced it had secured a pipe coating order worth $21 million from Reliance Ports and Terminal. Voltas soared 7% to Rs 947.90 on hopes that it will soon unveil a record date for a liberal 10-for-1 stock split.

TV broadcasters declined after Telecom Regulatory Authority of India issued a tariff order prescribing rates for pay channels. Governemt set Rs 5 per channel and a minimum of four month subscription duartion. Cable companies can not charge for installation or activation of the service. Traders worried that this low fee structure will cut in the revenue outlook of the company. Zee Telefilms plunged 4.4% to Rs 277, TV 18 India slid 8% to Rs 595, Sun TV was off 2.4% to Rs 1,195 and NDTV was down 2.9% to Rs 194.90.

Steel shares lost on reports that producers may cut prices from September 2006. SAIL dipped 4% to Rs 71.70 and Tata Steel lost 1.7% to Rs 497.65. Cement shares also fell on profit-taking. ACC lost 1.4% to Rs 909, Gujarat Ambuja Cements declined 1.6% to Rs 112.75 and Grasim lost 0.3% to Rs 2,253. Index large-cap Reliance Industries declined nearly 1% to Rs 1,119.

Moser Baer witnessed volatile session, soaring about 9% in opening trade to reach Rs 207 level. It then sank to Rs 196 level in mid-morning before rebounding to Rs 201- 202 level in afternoon trade. A sell-off in mid-afternoon trade made the the stock retreat to Rs 190 level.

Several small-cap and mid-cap stocks plunged. Spanco Telesystems, Gulshan Sugars, GR Cables, Atul Auto, Megasoft, GEI Hamon Industries, Manugraph, Rajesh Exports, Whirlpool, Cosmo Films, Archies Greetings, Bombay Rayon, Ricoh India, Gujarat Apollo Equipment and Flex Industries slipped between 5% - 10.7% for the day.


09:45AM Upbeat economic data and retail sales lifted stocks.
U.S. stocks opened higher, boosted by news of higher consumer spending, fewer jobless claims and solid retail sales. Investors welcomed news that spending rose by 0.8% last month, twice the 0.4% gain shown in June, as well as the Labor Department figures showing a drop of initial jobless claims to 316,000 from the previous week''s revised figure of 318,000. Retailers reported strong same-store sales in August due to the back-to-school buying period. Wal-Mart Stores Inc. (WMT: chart), Limited Brands Inc. (LTD: chart), as well as Macy''s and Bloomingdale''s parent Federated Departments Stores Inc. (FD: chart) posted gains. Meanwhile, J.C. Penney Co. (JCP: chart) and Gap Inc. ((GPS) turned in disappointing numbers. The Dow Jones industrial average is up 0.56 at 11,383.47, the Nasdaq Composite has gained 2.93 to 2,188.66 and the Standard & Poor''s 500 index is up 0.16 to 1,304.43.

Blyth Inc, (BTH: chart), decoration products provider, reported a Q2 loss of $2.24 a share, down from earnings of 10 cents a share a year-ago. On a continuing operations basis, the company lost 52 cents a share in Q2. The latest results include a pre-tax goodwill impairment charge of $36.8 million. If not for the charge, the company said it earned 13 cents a share in Q2. Sales rose 2% in Q2 from the same period a year earlier. The company missed analysts’ estimate for a loss of 4 cents a share.

Del Monte Foods Co, (DLM: chart), food company, reported that Q1 net income fell to 3 cents a share, from 8 cents a year ago. If not for discontinued operations, earnings came to 4 cents a share. Sales for Q1 increased to $674.1 million from $616.6 million. The company missed analysts’ views for earnings from continuing operations of 4 cents a share. For Q2, Del Monte forecast earnings from continuing operations at 5 cents to 7 cents a share, including expenses accruing to 7 cents a share.

Family Dollar Stores, (FDO: chart), discount retailer, reported that same-store sales advanced 4% in August and raised earnings estimates for its Q4. The company topped analysts’ expectations for a gain of 3.8%. The company also said it expects better-than-expected cost control and a more favorable mix will positively impact results in its Q4. It now expects earnings of 22 cents to 24 cents a share in Q4, compared to its previous expectations of 19 to 22 cents.

Federated Department Stores Inc, (FD: chart), department stores operator, reported that same-store sales rose 3.8%, missing analysts expectations for it to post a same-store sales gain of 4%. Total sales for period rose 61.6% to $1.73 billion. Federated expects same-store sales to increase by 3% to 5% in September.