3:00PM Carnival Corp shares are down amid cuts in its 2006 earnings outlook.
Carnival Corp (CCL: chart) shares are down 3.09% as brokers lowered price targets after news the company cut its 2006 earnings outlook. The 2006 earnings are now expected to range $2.65 to $2.75. The company expects 2006 Q2 earnings of 43 cents to 45 cents per share.

Abercrombie & Fitch (ANF: chart), a specialty clothing, accessory, and personal care retailer, reported its net income jumped to 62 cents a share vs. 45 cents a share in the year-earlier period. The company now expects earnings $1.28 to $1.33 a share for the first half of fiscal 2006. The projected earnings are up from previous forecasts of $1.23 to $1.28 a share. Sales jumped 20% to $657.3 million vs. last year’s $546.8 million. Outlets open more than a year had a 6% rise in sales.

Circuit City (CC: chart) increased its projected outlook of net sales growth of 7% to 11% in fiscal 2007. Analysts estimate web-originating sales of up to $1 billion. Analysts on average expected profits ranging from a loss of 1 cent to a profit 4 cents with a consensus estimate of a profit of 1 cent. The stock is currently up 4.77%.

Zale Corp. (ZLC: chart), a fine jewelry retailer, reported earnings of 35 cents a share up from 28 cents a share in the year-earlier period. The company’s revenue rose 2.2% to $526.9 million. Analysts currently expect earnings of 7 cents a share.

GOL Linhas Aeras Inteligentes S.A. (GOL: chart), a low-cost airline operating in Brazil, shares fell after the company filed registration statements for a number of stock and bond offerings. The company intends to use the net proceeds to cover the costs of acquiring aircraft, equipment, and materials. GOL’s stock is currently down 8.41%.

2:30PM Widely held indexes Dow, Nasdaq and S&P 500 decline more than 1.5%
Market averages tumbled under the weight of inflation fears. Dow traded more than 200 points lower, Nasdaq has lost 27 points and S&P lost 19 points with only 120 minutes of trading left. Financial services, industrials and tech stocks led the decliners. Metals, crude oil and dollar came under pressure. Crude declined on rising inventory supply data and metal market maintained its recent slide. Consumer prices rose 0.6% in April and core inflation was reported to jump at 0.3% after rising 0.3% in March. Market was rattled with the prospect of rising interest rate to stem higher inflation. Commodities price inflation is steadily seeping into the broader economy as industry after industry pass along the rising energy cost. Railroads, airlines and truck transportation companies have passed these charges along as fuel surcharges. Utility companies have also requested steep hike in rates.

12:30PM European markets drown in the red.
European markets tumbled in afternoon trading, following a downbeat U.S. economy report. Market averages erased earlier gains to close deeply in the red after stronger-than-expected data on consumer prices raised concerns about inflation and further increases of interest rates. The German DAX 30 slipped 3.4%, the French CAC 40 tumbled 3w.2%, and London FTSE 100 dropped 2.9%. The British pound climbed to $1.9025 from $1.8859, reflecting speculations that the Bank of England will raise interest rates.

Crude oil prices dropped below $69 on rising gasoline stockpiles. Light sweet crude June delivery fell $1.33 to $68.20 a barrel. Gasoline dipped 5 cents to $1.97 a gallon. Natural gas fell 7 cents to $6.80 per 1,000 cubic feet. European gold advanced. In London the precious metal rose to $696 per troy ounce, up from $687. In Zurich gold gained to $696.70, up from $688.75. Silver closed unchanged at $13.30. The U.S. dollar traded mixed in European trading. The euro traded at $1.2793, down from %1.2853. The dollar bought 109.69 yen, down from 109.72. The British pound was quoted at $1.8865, down from $1.8876.


11:30AM Inflation weighed on market sentiment.
Stocks traded weak as investors worried about the pace of inflation after a report on producer prices was released. The data showed that consumer prices rose at their fastest pace in three months due to a significant increase in energy prices. Excluding food and energy prices, prices exceeded expectations, raising concerns about the pace of inflation. The three major averages moved notably lower with the Nasdaq falling to a four-month low.

The Labor Department''s report on April consumer prices raised concerns about the outlook for interest rates, sending brokerage stocks notably down. The Amex Securities Broker/Dealer Index dropped 1.9%. The concerns about higher interest rates also contributed to significant weakness among housing stocks. The Philadelphia Housing Sector Index fell 1.4%. Networking stocks posted considerable weakness, as reflected by the 1.1% loss shown by the Amex Networking Index. Tellabs (TLAB: chart), telecom equipment maker, dropped 3.3%, leading the sector down. Some defense, transportation, and telecommunications stocks also posted notable losses. Dow component Boeing (BA: chart) posted a 2.3 % loss. Meanwhile, gold stocks advanced along with June delivery prices which reached $698 per ounce. The Amex Gold Bugs Index gained 1%.

[R}Crude oil inventories declined, while gasoline advanced.
Crude oil inventories ticked down in the latest week, according to government statistics released Wednesday. The slide followed 2 weeks of inventory builds and was not enough to fully reverse the previous week''s mild gain. Meanwhile, stocks of gasoline pushed higher, building on the prior week''s advance. The Department of Energy''s Energy Information Administration revealed that crude oil inventories fell by 100,000 barrels for the week ended May 12. Specifically, the measure slipped to 346.9 million barrels from the prior week''s level of 347 million barrels. The move in the latest period reversed a portion of the previous week''s gain of 300,000 barrels. That advance was preceded by a gain of 1.7 million barrels in the prior week and a slide of 200,000 barrels in the week before that. In the most recent week, oil inventories were 4.7% higher than their levels of the same time last year. Gasoline inventories posted a week-over-week advance of 1.3 million barrels, the government said. This followed an advance of 2.4 million barrels in the previous week. In the latest period, gasoline stocks were 3.5% below their levels of last year. Inventories of distillate fuel oil recorded a slight decline in the most recent week, ticking down by 100,000 barrels. This followed an advance of 200,000 barrels in the previous week.


10:00AM Stocks opened in the negative on inflation worries.
U.S. stocks came under pressure at opening as downbeat consumer prices report outweighed robust profit growth for Hewlett-Packard. The economic data raised concerns about inflation and interest-rate increases as the Labor Department posted a bigger-than expected-increase in core consumer prices, rising by 0.3% in April, above economist estimates of an increase of 0.2%.Following the report, rate-sensitive utilities and banking stocks moved to the down side, contributing to the weakness shown by the broader markets. Bank of America Corp. (BAC: chart) fell 1%, while JPMorgan Chase & Co. (JPM: chart) lost 1.3% on the Nymex.

In corporate news, Hewlett-Packard Co. (HPQ: chart) the No. 2 computer maker, was the sole gainer in the Dow industrials. The company’s shares advanced 4% after it posted 51% jump in quarterly profit. Applied Materials (AMAT: chart) fell 1.5% after reporting higher quarterly profit, but disappointing outlook. In the first hour of trading, the Dow Jones industrial average fell 67.56, or 0.59%.The Standard & Poor''s 500 index was down 6.31, or 0.49%, and the Nasdaq composite index dropped 10.80, or 0.48%. Worries about higher interest rates weighed on bonds. The 10-year Treasury note climbed to 5.16% from 5.1% late Tuesday.


9:00AM Stock futures were set to open flat on inflation data.
U.S. stock futures pointed to a flat start of Wednesday session, with investors digesting consumer prices data, giving an indication about the pace of inflation. The Labor Department reported that prices rose in line with economist estimates, with consumer price index rising 0.6% in April following a 0.4% increase in March.

Tech stocks are expected to be in focus today as Hewlett-Packard reported 51% profit growth in Q2 on sales of more profitable types of PCs and printers and from stealing market share from its biggest rival in PCs. The company posted profit of $1.46 billion, or 51 cents a share, compared with $966 million, or 33 cents per share last year. Sales rose 5% to $22.6 billion from $21.6 billion last year. Excluding one-time expenses, the company earned $1.6 billion, or 54 cents per share, compared with a profit of $1.1 billion, or 37 cents per share, in the same period last year. Applied Materials Inc. reported a higher quarterly profit, citing revenue jump on demand for consumer electronics, such as digital music players and cell phones. A disappointing outlook dragged its shares down 3.4% to $17.25 on Inet. S&P 500 futures were up 1.8 points, just above fair value. Dow Jones industrial average futures rose 20 points, and Nasdaq 100 futures rose 4.75 points.

Consumer prices rose in line with expectations.
The Department of Labor released its closely watched report on consumer prices in the month of April on Wednesday, showing that prices rose in line with economist estimates. At the same time, core prices rose more than expected. The Labor Department said that its consumer price index rose 0.6 percent in April following a 0.4 percent increase in March. The increase by the index came in line with economist estimates of a 0.6 percent increase. The acceleration in the pace of price growth compared to the previous month came as energy prices surged up 3.9 percent in April after rising 1.3 percent in March. The increase in energy prices also contributed to a 2.4 percent increase in transportation prices. The report also showed that the core consumer price index, which excludes food and energy prices, rose 0.3 percent for the second consecutive month. Economists had expected a more modest increase of about 0.2 percent.

Zale Corp (ZLC: chart), fine jewelry retailer, reported Q3 net income advanced to 35 cents a share, up from 28 cents a share in the year earlier period. If not for items, net income was 24 cents a share. Revenue advanced 2.2% to $526.9 million. The company beat analysts’ estimates for net income of 21 cents a share.

Charming Shoppes Inc, (CHRS: chart), retailer of women''s plus-size apparel, reported Q1 net income advanced 7% to 24 cents a share, up a penny from 23 cents in the year-ago period on 22% higher sales, matching analysts’ estimate. Sales advanced to $734.9 million from $603.3 million.