11:30AM Choppy trading after disappointing economic data.
After moving higher on the back of falling oil prices, stocks turned in a lackluster trading fashion, as a decline in consumer confidence countered stronger-than-expected quarterly earnings. The Conference Board said its index of consumer confidence fell to 105.4 from 105.9 in September, coming in below the 107.8 analysts expected. The report raised concerns about the strength of consumer spending, and the economic growth. The Dow moved considerably down, led by Verizon (VZ: chart) and Pfizer (PFE: chart), down 2.3% each. Eastman Kodak Co. (EK: chart) rose 4% to $24.70 after posting a narrower-than-expected loss amid a 10% decline in sales.

Among other companies releasing quarterly results, UAL Corp. (UAUA: chart), which emerged from bankruptcy protection in February 2006, swung to Q3 profit. The company reported net income of $190 million, or $1.30 a share, up from a loss of $1.77 billion, or $15.26 a share, helped by 11% higher revenue from United Airlines' international routes, and demand for air travel. Qwest Communications International Inc. (Q: chart) also swung to a Q3 profit, helped by a tax gain, as the phone company cut costs and signed up more high-speed Internet customers. The company posted net income of 9 cents a share, vs. a loss of 8 cents a share, a year earlier, beating expectations. The stock dropped 3%. In late morning trading, the Dow Jones industrial average rose 5.28, or 0.04%, to 12,091.78. The Standard & Poor's 500 index was up 0.95, or 0.07%, at 13,78.88, and the Nasdaq composite index was up 8.16, or 0.35%, at 2,371.93.


Consumer confidence declined in October.
Tuesday morning, the Conference Board released its report on consumer confidence in the month of October, showing that its consumer confidence index fell unexpectedly compared to the previous month. The report showed that the consumer confidence index fell to 105.4 in October from a revised 105.9 in September. Economists had expected the index to increase to 108.0 from the 104.5 originally reported for the previous month. The Conference Board said that the present situation index fell to 124.7 in October from 128.3 in September, as those claiming conditions are bad rose to 17.1 percent while those claiming conditions are good rose to 28.1 percent. The report also said that labor market conditions were less positive than last month, with those saying that jobs are plentiful falling to 25.8 percent while those claiming jobs are hard to get rose to 22.0 percent. At the same time, the expectations index rose to 92.6 in October from 91.0 in September, as those expecting conditions to improve in the next six months rose to 18.5 percent while those expecting conditions to worsen fell to 9.9 percent. The outlook for the labor market was mixed, however, as those expecting more jobs to become available rose to 15.2 percent while those expecting fewer jobs rose to 17.5 percent.


10:30AM The Sensex sheds 62 points in volatile trading, turnover jumps.
The Sensex on BSE closed 62.36 points or 0.48% lower at 1,2961.90. The market-breadth was weak, there were almost 2 decliners for every advancer on BSE. For 1,643 shares that declined, 868 advanced and 59 remained unchanged. From the Sensex stocks, 18 declined while the rest advanced. The turnover on BSE was Rs 4,392 crore, much higher than Rs 3,708 crore on Monday. The turnover on BSE was Rs 8,764.82 crore.

Economic news

The Reserve Bank on Tuesday kept that key interest rates unchanged so as to maintain stable commercial lending rates, including that of home loans, to support the growth momentum. At the same time, Reserve Bank of India took a small step to contain inflation, now hovering at over 5%, by raising repo rate (overnight rate) at which Reserve Bank of India buys securities from banks to 7.25% from the earlier 7%.

Decliners

Reliance Communications led the decliners, down 3.70% to Rs 379 on heavy volumes of 22.43 lakh shares. It had soared to a high of Rs 400 in early trades.

Tata Motors shed 2.36% to Rs 832. Its ADR had plunged over 4% on Monday on NYSE. Tata Steel lost 1.39% to Rs 491.40 on 13.69 lakh shares. Its second-quarter, September net profit rose 5.4% to Rs 1,101 crore (Rs 1,045 crore). Net sales increased 7.8% to Rs 4,185.75 crore (Rs 3,884.42 crore).

Index heavy, Reliance Industries sank 0.47% to Rs 1,226.70 on 7.30 lakh shares. It had struck an intra-day high of Rs 1,240 in early trades, recovering from low of Rs 1,219.10. Reliance Industries has raised $300 million through a private placement of debt papers with US insurers, the company and Bank of America Securities announced today.

Ashok Leyland dipped 5.19% to Rs 43.80 despite its second-quarter, September 2006 net profit rose 27.1% to Rs 95.3 crore (Rs 75 crore). Ind-Swift Laboratories fell 6.50% to Rs 65.50 after reporting its net profit fell 46% for the July-Sept 2006 quarter from a year ago. Sterlite Optical Technologies lost 0.97% to Rs 193.50, after hitting a high of Rs 205. The company reported a surge in net profit for second-quarter, September 2006.

Advancers

Hindustan Lever led the advancers, jumping 3.02% to Rs 235.65 on 22.49 lakh shares in the wake of the company release of 60% rise in September quarterly earnings on strong demand for soaps, shampoos and packaged foods, as well as one-off gains from stake sales. Net profit surged to Rs 520.74 crore for the quarter ended 30 September 2006 where as the same was Rs 325.96 crore for the quarter ended 30 September 2005.

State banks rose on the decision of the Reserve Bank of India to maintain key rates. Indian Overseas Bank jumped 2.83% to Rs 117.90, Bank of India gained 4.50% to Rs 174, Andhra Bank edged up 1.25% to Rs 93.05, Bank of Baroda advanced 0.74% to Rs 279.90, and State Bank of India notched up 0.14% to Rs 1,096.25.

Satyam Computers gained 2.36% to Rs 440.40. It bounced back from its low of Rs 434.70. Hero Honda advanced 1.50% to Rs 757 after declining to a low of Rs 747. Aviation stocks surged helped by renewed buying. Deccan Aviation surged 10.89% to Rs 112, Spicejet jumped 10.27% to Rs 45.65 and Jet Airways gained 2.25% to Rs 596.

Cummins India soared 7.96% to Rs 270 after it reported 66% growth in net profit for second-quarter, September 2006 to Rs 62.69 crore (Rs 37.76 crore).

Other news

In an effort to move toward full float of rupee, the Reserve Bank of India announced today a number of measures such as doubling of resident individual remittances to 50,000 dollars per year, prepayment of ECBs up to 300 million dollars without prior approval, and the bank also eased norms for corporates to set up offices abroad by increasing the limit of remittances for the purpose.