11:30AM Market averages advanced on strong home sales in July.

U.S. stocks were pushed higher Friday by easing concerns about credit markets and economic recession on the back of a larger-than-expected increase in new home sales in July and surging durable-goods orders. At the same time, upbeat economic reports diminish investor optimism that the Fed Reserve will intervene by cutting its key interest rate before the official meeting on 18 September.

In corporate news, Home Depot (HD: chart) added 1.3% on reports that it may receive $1.2 billion less than anticipated for the sale of its wholesale distribution business. Bank of China fell over 5% in Hong Kong after officials disclosed the bank had almost $10 billion of exposure to securities backed by U.S. subprime mortgages.

Morgan Stanley (MS: chart) cut its forecast for retail sales growth in 2008, saying that the current credit markets woes will affect consumer spending. Retail stocks were given a boost by strong earnings in the sector. Ann Taylor (ANN: chart) rallied 6%, despite posting a 27% decline in Q2 profit. Gap (GPS: chart) shares rose 5.5% after posting 19% in Q2 profit on lower costs.

H. J. Heinz Co. (HNZ: chart) posted 6% earnings rise in Q1 to 63 cents per share, up from 58 cents per share, a year ago, helped by 9% sales growth to $2.25 billion. Analysts had expected profit of 63 cents per share on revenue of $2.23 billion. Burger King Holdings (BKC: chart) swung to profit in Q4 to 26 cents per share, versus a loss of 8 cents per share a year ago. Sales rose 11% to $590 million.

In midday trading, the Dow Jones industrial average rose 15.29, or 0.12%, to 13,251.17. The Standard & Poor's 500 index rose 1.10, or 0.08%, to 1,463.60. The Nasdaq composite index rose 2.83, or 0.11%, to 2,544.53. Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.62% from 4.63% late Thursday.


09:45AM Wall Street opened little changed ahead of housing data.

Wall Street opened near the flat line, reflecting a stronger-than-expected durable goods data and nervousness ahead of new home sales report. However, market sentiment received a boost from a larger-than-expected increase in new home sales in July which helped ease recent worries about credit markets.

The Commerce Department said that sales of new home rose 2.8% in July to a seasonally adjusted annual rate of 870,000, stronger than the 820,000 annualized pace expected by economists. According to another Commerce Department report released earlier today, orders for durable goods surged 5.9% in July, by far above the expected 1.5% gain.

Home Depot (HD: chart) shares rose 2% amid reports that the company may receive $1.2 billion less than anticipated for the sale of its wholesale distribution business to private equity firms.

Tech stocks were weak in early trading, with Marvell Technology Group (MRVL: chart) falling 11% after it offered a soft gross margin forecast. Other notable decliners were Research In Motion (RIMM: chart) and Microsoft (MSFT: chart), losing 1.4% and 0.5%, respectively. Cisco Systems (CSCO: chart) edged down 0.4%.

In the retail sector, Gap (GPS: chart) rose 3.4% after it said its profit jumped 19% in Q2 on lower costs, closed stores and laid off workers. In the first hour of trading, the Dow Jones industrial average fell 7.31, or 0.06%, to 13,228.57. The Standard & Poor''s 500 index slipped 0.83, or 0.06%, to 1,461.67. The Nasdaq composite index fell 5.08, or 0.20%, to 2,536.62.


09:00AM U.S. stock futures advanced, lifted by strong durable goods orders in July.

U.S. stock futures were indicating a positive opening Friday, as stronger-than-expected durable goods orders helped offset concerns about slowing housing market. The Commerce Department said that July orders for durable goods surged 5.9% on higher demand for airplanes, vehicles, computers, machinery, steel. Investors were also expecting a report on new home sales for July which is likely to show they continued falling at an annual rate of 820,000 homes.

Among companies in focus, Marvell Technology Group (MRVL: chart) slipped 7.5% before the opening bell after the chipmaker posted a quarterly net loss, due to higher spending on research and development. Brocade Communications (BRCD: chart) fell 1.7% amid disappointing results.

In the retail sector, Gap (GPS: chart) rose 3% after reporting a 19% profit increase on reduced costs and improved its annual earnings outlook. The retailer also announced an additional $1.5 billion stock buyback. Ann Taylor (ANN: chart) added 3.5% in pre-open trade as a new marketing chief and a $300 million stock repurchase program offset a 27% drop in Q2 profit.

In deal-related news, Home Depot (HD: chart) is reportedly likely to receive $1.2 billion less than its originally agreed $10.3 billion for its wholesale distribution arm. S&P 500 futures fell 1.30 points, roughly in line with fair value. Dow Jones industrial average futures slipped 4 points, and Nasdaq 100 futures fell 4 points. U.S. stock futures were indicating a positive opening Friday, as stronger-than-expected.