U.S. MARKET AVERAGES

U.S. stock markets have been trading in a low volume, slightly moving down from their intraday highs. The market lacks activity on a large profit-taking Monday with surging oil prices over $67 a barrel which eased today below $66 as OPEC agreed to release 2 million barrels a day of spare crude to offset the impact of another hurricane threatening to hit the Gulf Coast.
The missing trading activity is largely due to the long-expected Fed Reserve decision on interest rate, which is expected to rise in contrast to earlier expectations of a temporary halt of the hike due to the impact of Katrina.

Technology stocks posted strong gains with the biggest advancer being the networking space, up 1.6%. Railroad stocks, insurance and paper products sectors made considerable gains as well.

Energy stocks have erased some of their gains made during Monday’s rally when oil jumped more than $4 a barrel. The oil service space is the biggest loser in the group, down about 1.4%. Housing sector slightly declined as housing stocks showed weakness.

Apple, Goldman Sachs, UnumProvident and Red Hat stand out among the gaining stocks of the day, while Estee Lauder and Delphi go into the losing group.

MOVERS AND SHAKERS

The retailer Wal-Mart (WMT: chart) fell 0.14% in premarket trade after the company announced it was stepping into Central American market. The company bought a part of the Central American top retailer from Dutch retailer Royal Ahold (AHO: chart).

Goldman Sachs (GS: chart) added 2.2% after the company posted third-quarter revenue of $7.3 billion, up from $4.5 billion a year earlier. This revenue was high above the analysts’ estimates.

Circuit City Stores Inc. (CC: chart) jumped 11.2% after the company reported a second-quarter profit of $1.3 million. A year ago it has a loss of $11.9 million and analysts’ forecasts were about a loss again.

Entergy Corp. (ETR: chart) said it expects between $750 million and $1.1 billion in reparation expenses from Hurricane Katrina. The company also warned Entergy New Orleans may bankrupt. Electric power distributor is likely to be active after the market opening.

Coca-Cola Enterprises (CCE: chart), Pepsi Bottling Group (PBG: chart) and PepsiAmericas (PAS: chart) were downgraded at Lehman Brothers. The broker pointed a recent rise in energy prices as a reason for this move. Coca-Cola Enterprises dropped 0.7% in the early trading.

ECONOMIC NEWS

Tuesday morning, the Department of Commerce released its report on housing starts in the month of August, showing a notable decline compared to the previous month. Building permits, which offer an indication of future starts, also showed a notable decline.

The report showed that housing starts fell 1.3 percent to a seasonally adjust annual rate of 2.009 million units in August from a downwardly revised 2.035 million unit rate in July.

Economists had expected housing starts to fall to a 2.040 million unit rate from the 2.042 million unit rate originally reported for July.

Notable declines in the Northeast, the Midwest, and the South contributed to the decrease in housing starts. At the same time, housing starts in the West rose 13.3 percent in August.

As mentioned above, the report also showed that building permits fell 2.2 percent to a seasonally adjusted annual rate of 2.124 million units in August from a downwardly revised 2.171 million unit rate in July.

The decrease in building permits exceeded the expectations of economists, who expected a decrease to a 2.129 million unit rate from the 2.167 million unit rate originally reported for July.


INTERNATIONAL MARKET NEWS