12:30PM European markets gained ground.
European markets finished steeply in the positive, reflecting a significant decline by the price of oil and reduced measures at U.K. airports. Oil dropped more than a dollar after a cease-fire between Israel and Hizbollah took effect, easing supply concerns. Another factor sending oil prices down was BP’s announcement that it will pump 200,000 barrels of oil a day from the Prudhoe Bay field in Alaska during repairs. Among leading gainers were airline stocks which recovered on the news of the day. British Airways advanced 1.9%, while Lufthansa rose 2%. Automakers like Renault and Volkswagen also posted gains. The French CAC 40 climbed 1.2%, the German DAX 30 rose 1.1%, supported by upbeat GDP figures for the second quarter, and London FTSE 100 gained 0.9%.

Oil price dropped over a dollar as a cease-fire in the Middle East took effect and BP said it will be able to pump 200,000 barrels a day at the oilfield in Alaska, despite the repairs. Light crude September delivery fell $1.27 to $73.08 a barrel. Gasoline lost 7 cents to $1.9925 a gallon, while heating oil fell 3 cents to $2.0090. Natural gas declined 40 cents to $6.870 per 1,000 cubic feet. London Brent dropped $1.26 to $74.37. The dollar traded mixed versus major currencies. The euro traded at $1.2743, up from $1.2729. The dollar bought 116.40 yen, up from 116.26. The British pound stood at $1.8908, up from $1.8901. European gold prices declined. In London the precious metal traded at $627.60, down from $637.60 per ounce. In Zurich gold traded at $628.38, down from $640.63. Silver closed at $11.97, down from $12.17.


11:30AM Market averages rallied.
Mideast cease-fire and lower oil prices boosted stocks and the three major averages rallied. The Dow and S&P 500 were supported by heavy equipment maker Caterpillar Inc. (CAT: chart) which rose 1.7%, jet maker Boeing Co. (BA: chart), up 1.3% and diversified manufacturer United Technologies Corp. (UTX: chart), up 1.5%. The Nasdaq was helped by Cisco Systems (CSCO: chart) which rose 2.4% on news the company is set to benefit from telecommunications companies upgrading their networks to handle next-generation services such as video.

Significant strength was posted by financial stocks. The shares of Charles Schwab Corp. (SCHW: chart) rose 1.7% after it said its July client daily average trades rose 15% from year ago levels, to 245,200, but they fell 5% from June 2006. Net new assets brought to the company by new and current clients in July 2006 totaled $6.8 billion. Total client assets were $1.284 trillion at the end of July, up 12% from July 2005 and up 1% from June 2006.

Knight Capital Group (NITE: chart) announced its average daily U.S. equity trade volume in July 2006 declined 1% to 775,000 from 768,000 in July 2005 and was off 6.4% from 828,000 in June 2006. Average daily dollar value traded in July was $7.03 billion, down 4% from $7.32 billion in July 2005 and off 11.2% from $7.91 billion in June 2006. Average daily U.S. equity share volume was 5.15 billion in July up 137.9% from 2.17 billion in July 2005 and up 27.6% from 4.04 billion in June 2006. Knight shares lost 0.8%. Shares of Ameritrade (AMTD: chart) rose 1.9%, following announcement last week that its average client trades during July averaged 210,000 per day. In late morning trading, the Dow Jones industrial average rose 77.40, or 0.7%. The Standard & Poor''''s 500 index added 6.69, or 0.53%, and the Nasdaq composite index gained 19.79, or 0.96%. Bonds moved lower, with the yield on the benchmark 10-year Treasury note rising to 4.99% from 4.97% late Friday.


10:30AM Sensex gained 1% due to decline in oil prices.
The Sensex in India ended 120.53 points, or 1.08% higher, to settle at 11,312.99. The turnover on BSE was Rs 2,821 crore, lower than Friday''s Rs 3,402.61 crore. The market-breadth was strong, as 1,837 shares rose on BSE, only 641 declined and 60 shares were unchanged. The index has soared since late July 2006 supported by sustained foreign funds inflow, strong quarterly results, normal rain in the month of July, and easing of worries of domestic rate hike.

Bajaj Auto led the gainers, surging 5% to Rs 2,788. Hero Honda led the decliners, falling nearly 2.2% to Rs 681.25. Refinery shares were in focus as the crude oil price declined. BPCL jumped 6% to Rs 325, Indian Oil Corporation rose nearly 6% to Rs 423 and HPCL surged 5.9% to Rs 235.95. ONGC rose 1.8% to Rs 1,216.50. The large-cap company is looking for stakes in many more overseas oil assets in collaboration with Chinese firms. IT large-cap Infosys rose 0.7%, to Rs 1,755.

Other auto stocks participated in the rally led by TVS Motor gaining 2.5% to Rs 95, Eicher Motor rising 2% to Rs 230.95, Mahindra & Mahindra advancing 1.3% to Rs 621. Tata Motors rose 1.1% to Rs 803 and small car maker Maruti Udyog gained 1% to Rs 802.45.

Reliance Industries rose 1.8% to Rs 1,030, extending Friday''s 3.1% gain. Housing finance large-cap HDFC advanced 3.6% to Rs 1,310 and shares of largest commercial bank State Bank of India gained 1.8% to Rs 874. Cipla surged 3.7% to Rs 250.45. Cellular service company, Bharti Airtel moved up 2.4% to Rs 414, as last week, the company posted strong subscription growth for July 2006.

Metal shares gained on hopes of strong demand. Hindustan Zinc rose 4.8% to Rs 573.70, National Aluminium Company gained 2% to Rs 199.50, Sterlite Industries gained 1.6% to Rs 401.55 and Tata Steel gained 1.1% to Rs 531. BSE Metal index rose 1.1% to 8,254.86. BHEL rose 1% to Rs 2176.05 after the company secured Rs 1,224 crore ($269 million) order for a thermal power plant in Uttar Pradesh.

Hero Honda led the decliners, falling 2.21% to Rs 681.25. ICICI Bank sank 1.11% to Rs 578.00, TCS shed 0.50% to Rs 963.40, HDFC Bank lost 0.31% to Rs 807.25 and Ranbaxy fell 0.27% to Rs 393.00.

Several small cap companies advanced during the trading session. Courier service company, Blue Dart Express jumped 15.8% to Rs 544. VisualSoft soared 11% to Rs 93.90 even as the company clarified that it has not finalized any corporate merger deal. Datamatics Technologies surged 13% to Rs 56.45 on strong volume of 24.8 lakh shares on BSE.


9:45AM Stocks opened in the negative.
Stocks moved sharply higher at opening as Wall Street welcomed news of a cease-fire between Israel and Lebanon Monday and a significant decline by oil prices. Crude futures fell $1.18 to $73.17 a barrel on a reduced risk of a supply disruption in the Middle East and news that BP is planning to continue to produce oil from the western side of the Prudhoe Bay oil field. With no economic data and little corporate news of note, investors saw the cease-fire as a buying opportunity after last week''s losses.

The decrease by the price of oil contributed to significant strength among airline and other transportation stocks. The Amex Airline Index rose 2.8%, while the broader Dow Jones Transportation Average gained 1.5%. Some networking stocks also posted strong gains, with shares of Ciena (CIEN: chart) rising 3% after Banc of America upgraded its rating on the company''s stock to Neutral from Sell. In other brokerage news, Ford Motor (F: chart) gained 2.9% after Bear Sterns raised its rating on the stock to outperform from underperform, while General Motors (GM: chart) lost almost 1% on downgrade from outperform to peer perform. In the first hour of trading, the Dow Jones industrial average rose 61.15, or 0.55%. The Standard & Poor''s 500 index added 6.97, or 0.55%, and the Nasdaq composite index gained 17.01, or 0.83%.


9:00AM Stock futures pointed to a higher opening on oil drop and ceasefire.
U.S. stock futures indicated a positive opening Monday as oil prices declined 1.6% after a truce in the Middle East took effect, ending a five-week violent conflict between Israel and Hizbollah. BP’s announcement that it would be able to keep half its Prudhoe Bay field pumping also helped oil prices down. During the week, investors will be focused on inflation data, expected to give signal about the Fed Reserve’s next move. Lower oil prices may help lift shares in industrial conglomerates such as 3M Company (MMM: chart) and chemical companies including Dow Chemical & Co. (DOW: chart) and DuPont Co (DD: chart). Shares in Whole Foods Market Inc. (WFMI: chart) are expected to rise after analysts at JP Morgan upgraded the company''s stock to ‘neutral’ from ‘underweight.’ On the earnings front, Computer Associates Inc. (CA: chart) and Agilent Technologies Inc. (A: chart) are among the few S&P500 companies scheduled to report results on Monday. Standard & Poor''s 500 futures were up 7.3 points, above fair value. Dow Jones industrial average futures shot 64 points higher, and Nasdaq futures were up 10.50 points.

The Valspar Corp, (VAL: chart), coatings specialist, reported Q3 net income rose to 51 cents a share from 44 cents a share in the same period a year ago. The company said current earnings include 1 cent a share in expenses related to its manufacturing rationalization plan and 1 cent a share for stock-expense compensation. They also include a favorable tax adjustment of 3 cents a share. Sales rose to $797.4 million from $725.4 million a year ago. The company beat analyst estimate for earnings of 49 cents a share.