4:30PM Earnings jump back in focus.

-S&P 500 closed up 5.18 points, Dow up 31.22 and Nasdaq up 11.94.
-Yield on 10-year bond closed at 5.09 and 30-year bond closed at 5.136%.
-Crude oil traded up 55 cents to close at $74.16 per barrel.
-Gold traded $17 up to close at $643.10 per ounce.

-Asian Markets closed lower led by 0.7% decline in India, Japan, Taiwan and Australia.
-European Markets declined across the region. Germany, France and Spain led the loser with a loss of more than 1.4%.
-In Latin American trading Argentina and Brazil rose in trading by 1% but Mexico fell 0.6%.

With the beginning of the earnings season, market has begun to pick winners from the loser. The guessing game was in full-swing today as market averages reversed the trading in the afternoon. Semiconductor stocks rebounded on the news that equipment maker KLA-Tencor (KLAC: chart) guided during investor conference that orders in the fiscal fourth quarter could beat the earlier guidance by as much as 15%. The stock rose 8% and lifted other semi stocks including Intel (INTC: chart), Advanced Micro Devices (AMD: chart) and Applied Materials (AMATA: chart). In other tech news, Lucent (LU: chart) and Alcatel (ALA: chart) fell near 4% on the news that the company may miss the revenue target in the quarter ending June 30 on the weakness of sales in China.

Pepsi Bottling Group (PBG: chart) rose 5% on the news that the operating income rose to 69 cents from 59 cents a year ago. Apparel retailer Talbots (TLB: chart) rose 22% on the company guidance that the loss in the quarter will be narrower than earlier expected and raised guidance for higher sales in the second-half of the year.

Seven bomb blasts on commuter trains in Mumbai, financial capital of India put investors on guard on Indian ADRs. More than 140 people dies and 250 people are reported to be injured. Infosys (INFY: chart), Cognizant (CTSH: chart), Satyam Computer (SAY: chart) and Tata Motors (TTM: chart) sold-off between 3% and 5% on the news. The bomb blast believed to be carried out by Kashmir based Lashkar-e- Taiba, terrorist group supported by Pakistan. Similar bomb blasts were carried out in Srinagar, Kashmir in the morning hours.

In European trading stock declined as oil and gold traded higher. Tech stocks in the region declined on the sales warnings from Lucent and depressing the merger partner in France, Alcatel. Other telecoms in the region, Ericsson, Philips and STM Micro declined on the news. Tech heavy German DAX index lost 1.6%. French construction and cement firm lost 2.3% after the news that its American unit was under investigation for certain government contracts.

Investors in Mexico are still nervous, but traders are focusing on earnings and economic data. American Movil (AMX: chart), Telmex and Walmart de Mexico rose a fraction. Investors are still not sure what to make of recent Presidential election but Calderon victory may be difficult to over turn, according local sources.

12:30PM European markets closed steeply down.
European markets finished steeply down, reflecting an advance in oil prices and weakness in the technology sector. Lucent Technologies dragged its future owner Alcatel after the telecom gear maker issued a Q3 sales warning. French telecom equipment maker Alcatel dropped 5.9%, followed by its peer Ericsson, down 3.4%. Mobile phone giant Vodafone dropped 1.7% after it was downgraded to neutral from buy at UBS. Front crude oil futures moved higher, sending auto stocks like Renault and Volkswagen lower. The German DAX 30 tumbled 1.6%, the French CAC 40 slipped 1.4%, and London FTSE 100 lost 0.7%.

Oil prices advanced on supply concerns as Iran expressed determination to finish its nuclear program, despite the strong opposition. Light crude August delivery rose 39 cents to $74 a barrel. London Brent rose 52 cents to $73.41. The dollar traded mixed versus major currencies. The euro traded at $1.2748, up from $1.2732. The dollar bought 114.21 yen, up from 114.10. The British pound stood at $1.8417, up from $1.8402. European gold prices advanced. In London the precious metal traded at $633.80, up from $627.20 per ounce. In Zurich gold traded at $633.75, up from $626.20. Silver closed at $11.39, up from $11.14.


11:30AM Stock markets traded down. Blasts in Mumbai weighed
The major averages moved firmly into negative territory as disappointing earnings news from Alcoa and Lucent contributed to the market weakness. Dow component Alcoa (AA: chart) dropped 4.8% as it reported weaker-than-expected Q2 revenues.
Shares of Lucent (LU: chart) declined 4.3% after the company issued a Q3 sales warning which also raised concerns about the strength of earnings. The news contributed to significant weakness in the networking sector. The Amex Networking Index fell down 2%, while Alcatel (ALA: chart), which agreed to merge with Lucent, dropped 5.5%. The airline sector stood out as one of the market''s worst performances as Merrill Lynch downgraded Continental (CAL: chart), AMR (AMR: chart), and U.S. Airways (LCC: chart) to Neutral from Buy, citing concerns about valuations following the recent strength in the sector. The Amex Airline Index currently dropped 4.1%.

Housing stocks also came under pressure, led by Champion Enterprises (CHB: chart), with the homebuilder down 5.4%. The financial, internet, and retail sectors also showed weakness, while oil service stocks bucked the downtrend, supported by the price of oil. Some negative sentiment was also generated by news of a series of explosions that hit commuter trains in Mumbai, India. The blasts occurred during rush hour in the financial hub and have reportedly killed up to 100 people. In late morning trading, the Dow dropped 63.71, or 0.57%. The S&P 500 was down 6.16, or 0.49%, and the Nasdaq composite index lost 18.31, or 0.86%. Bonds rallied, with the yield on the 10-year Treasury note slipping to 5.09% from 5.13% late Monday.


10:30AM Auto and steel shares push the Sensex down in volatile trading.
The Sensex in India ended lower by 69.95 points, 0.65%, on 10,614.35. The turnover on BSE was $500 million or (Rs 2,404 crore), up from the turnover on Monday of Rs 2,242 crore. The market-breadth was negative on BSE, as 1,169 stocks advanced, 1,203 declined and 74 stocks were unchanged.

Market trading was dominated by earnings expectations and news. Hero Honda fell on lower than expected earnings. However, banking stocks traded at a higher than normal volume. UTI Bank and HDFC Bank are expected to release earnings this week. Followed by State Bank of India and ICICI Bank earnings next week. UTI and HDFC are expected to report at least 15% rise in earnings but State Bank of India is expected to report 18% decline.

Top decliners in trading were Hero Honda, Tata Motors, Tata Steel, Hindalco and HLL. Hero Honda led the decliners, plunging 6.50% to Rs 717.10. The stock plummeted soon after it reported disappointing results. The company repoted revenue rise of 20% and earnings growth of 16% but indicated that operating margins had declined. The company also guided lower sales in the current quarter. Industry analysts feared that the company had lost market share.

Other auto stocks also declined. Tata Motors dipped 3% to Rs 759, Maruti Udyog lost 1.6% to Rs 792, Mahindra & Mahindra slipped 1.9% to Rs 603, Ashok Leyland lost 1.5% to Rs 36.20, and Eicher Motor was off 1.6% to Rs 267.

Tata Steel declined 2.56% to Rs 513.10 on a volume of 2.67 million shares while large-cap HLL sank 2.16% to Rs 235 on heavy trading volume of 2.4 million. Hindalco was down 2.20% to Rs 168.30. HDFC Bank shed 2.04% to Rs 763 while HDFC advanced 0.20% to Rs 1,200. IT large-cap Infosys also shed 1.10% to Rs 3,155.

Top advancers on Tuesday were pharma stock Cipla, Gujarat Ambuja, Grasim, Satyam and Wipro. Pharma stocks Dr Reddy’s Lab advanced 1% to Rs 1,327 and Cipla gained 3.43% to Rs 221.35 on buying momentum. Cement companies advanced, as ACC gained 0.83% to Rs 817 and Gujarat Ambuja Cement added 2.13% to Rs 105.4 after mid-afternoon session of trade on expectations of firm prices.

Reliance Industries advanced 0.60%, to Rs 1,049.30. Reports circulate that the company will launch 3 news channels by the end of the year and is in talks with BBC and a Delhi-based television software company for an equity alliance. Reliance Industries was also the top-traded stock on BSE with a turnover of Rs 166.47 crore or $40 million.