4:30PM Earnings drag market focus back to basics.

-Nasdaq closed up 0.37 points, Dow up 8.01 and S&P 500 down 1.71.
-Yield on 10-year bond closed at 5.075% 30-year bond closed at 5.113%.
-Crude oil down $1.73 to closed at $75.30 per barrel.
-Gold traded lower $16.10 per ounce to close at $651.90.

-Asian Markets closed sharply lower, led by 3.1% decline in India and near 2% drop in Taiwan, Singapore. South Korea and Japan were closed.

-European Markets closed lower led by 0.7% decline in France. Norway lost 1.8% on lower oil and South Africa lost 2.0% on lower gold.

-Latin American Markets led by a decline of more than 1% in the region. Mexico closed higher by 0.6%.

Corporate earnings and falling oil dragged market focus back to basics. Earnings from McDonald’s, Citigroup, Harley Davidson, Eaton Corp, W. Grainger, Commerce Bancorp, Mattel, Marshall & Ilsley showed a rising trend of earnings. In Europe Philips and Novartis reported earnings. More than 350 companies are scheduled to release earnings this week, including Microsoft, Coca-Cola, Johnson & Johnson, Merrill Lynch, New York Times, Wells Fargo and Yahoo.

Citigroup (C: chart) reported second quarter earnings of $1.05 or $5.27 billion on revenue rise of 10% to $22.2 billion. The company stock $1.18 lower to close at $46.40. McDonald’s (MCD: chart) reported second quarter earnings of 67 cents vs. 42 cents a year ago. The company also reported 10 cents gain from the sale of Chipotle Mexican Grill. The company stock closed higher $1.48 to close at $34.72. Harley Davidson (HDI: chart) reported second quarter earnings of 91 cents vs. 84 cents on revenue of $1.38 billion vs. $1.33 billion a year ago. The company sold 125,000 bikes around the world, 10% more than a year ago. U.S. sales rose 18.1% and international sales rose 8.6%.

Market averages traded directionless for the most part of the day. Fall in oil helped averages to recover most of the lost ground in the early trading. In Asian trading most markets closed lower. Japan and South Korea were closed due to a holiday. India lost 3.6% on the weakness in general market and lack of buying. Baja Auto reported 27% rise in earnings but missed the investor forecast of 44% rise in earnings. Taiwan and Hong Kong closed lower. Semiconductor stocks in Taiwan sold-off. Taiwan Semiconductor Manufacturing (TSM: chart) and United Microelectronics fell 2.5% at close.

In European trading major averages closed lower. Philips Electronics gained 2.9% on $1.9 billion share buyback and earnings. The company reported earnings decline of 69% after one time charge or 30% before the one-time charge. The company reported earnings of $380 million. French supermarket Casino-Guichard added 1.9% on the news that it sold its Polish operation for $1.2 billion. In the U.K. trading, gaming stocks fell on the news that the U.S. authorities detained CEO of BetOnSports. The company stock fell 17% and other online gaming company stocks fell in sympathy. PartyGaming fell 5% and Sportingbet fell 6%.


12:30PM European markets closed slightly lower.
European markets closed below the flat line on continuing worries over the escalating conflict in the Middle East. However, positive opening on Wall Street due to strong same-store sales for MacDonald’s and a decline in oil prices helped limit losses. Technology stocks also provided help, supported by 2.9% gain for Philips Electronics after the company announced a $1.9 billion share buyback. Among leading losers were miner Rio Tinto, down 1.8% and clothing retailer Hennes& Mauritz which fell 1% on disappointing same-store sales. The German DAX 30 edged down 0.1%, the French CAC 40 dropped 0.6%, and London FTSE 100 fell 0.1%.

Oil prices retreated from record highs, reflecting attempts to stop the escalating violent conflict in the Middle East. Light crude August delivery fell $1.13 to $75.90 a barrel. London Brent lost 84 cents to $76.74. The dollar traded higher versus major currencies. The euro traded at $1.2529, down from $1.2647. The dollar bought 117.15 yen, up from 116.21. The British pound stood at $1.8196, down from $1.8383. European gold prices moved lower. In London the precious metal traded at $649.30, down from $665.80 per ounce. In Zurich gold traded at $648.05, down from $666.55. Silver closed at $11.03, down from $11.59.


11:30AM Stock markets declined on weak oil and gold stocks.
Stock averages reversed from an earlier strength as a notable decline for Citigroup dragged banking stocks lower and lower crude oil prices pressured major oil companies. Dow component Citigroup (C: chart) dropped 2.4% after the company reported Q2 earnings and revenue that came in below analyst estimates. Oil prices retreated 73 cents to $76.30 a barrel, generating some selling pressure in morning trading. Oil service stocks posted significant weakness, sending the Philadelphia Oil Service Index down 2.5% and the Amex Oil Index down 1.5%. Losses by gold stocks also helped the market move lower. The losses came amid a significant decrease by the price of the precious metal, down $18.80 at $649.20 an ounce. Biotechnology stocks also came under pressure, with Biogen Idec (BIIB: chart) and Celgene (CELG: chart) turning in two of the sector's worst performances. Meanwhile, some strength was visible in the disk drive sector, boosted by a notable advance in the shares of Adaptec (ADPT: chart) and M-Systems (FLSH: chart). In late morning trading, the Dow Jones industrial average rose 20.14, or 0.19%. The Standard & Poor's 500 index fell 0.44, or 0.04%, and the Nasdaq composite index climbed 2.73, or 0.13%.


10:30AM Sensex in Mumbai, India declined 3.17% on lack of buying and general weakness in Asian trading.
Rising oil price, weak Asian markets and declining trading volume in India kept the market averages falling at the opening in Mumbai trading. BSE index of 30 stocks opened weak. Mixed earnings from several companies did not encourage buyers. At close market lost 385 points or 3.17% to close at 10,343.80. Trading volume on Bombay Stock Exchange was recorded at rupees 1,739 crore ($400 million), one of the lowest for the year.

All thirty stocks in the Sensex index managed to close lower. Of the 2,432 shares traded, 655 rose, 1,713 declined and 64 were unchanged. Mid-cap and small-cap index on BSE declined 1.2%.

The earnings season is in full swing and most consumer and industrial companies are reporting solid gains.

Auto stocks declined on the earnings news from Bajaj Auto. The company reported first quarter earnings growth of 28% to rupees 266 crores from rupees 208 crores from a year ago. Sales for the company rose 37% to rupees 2,202 (or $500 million). The stock fell 2.5% to close at rupees 2,518 on the news. Local brokers had forecasted revenue rise of between 44% and 54% in the quarter.

With the news and rising oil prices dragged other stocks in the sector. Maruti Udyog lost 5.3% to close at rupees 753, Tata Motors dropped 5.85% to close at rupees 696 and Ashok Leyland dropped 5% to close at rupees 32. Mahindra & Mahindara lost 6% to close at rupees 551. Rising oil price in the international markets were worrying to the investors.