12:30PM European shares close higher, despite weakening confidence in Germany.
European shares closed higher led by a gain of 0.46% in France, 0.41% rise in Germany, 0.3% advance in Switzerland and fractional losses in the U.K. and Norway.

A survey of analysts conducted by ZEW economic institute’s index of analysts’ dropped sharply to (5.6) in August from 15.1 in July. The negative reading indicates that analysts expect the economy to slowdown in the first half of next year. The German economy has been leading the European economic recovery after nearly five years of stagnation. However, value-added-tax in Germany is expected to rise from 16% to 19% next year. Economists are worried that this rise in tax will lower the economic growth from 3% to 2% next year.

12:00PM Light trading day on stock exchanges.
Light trading, worries in the oil trading and bullish comments from Advanced Micro Devices dominated trading sentiment in the morning trading. At mid-day trading volume on New York Stock Exchange was less than 760 million shares with market averages trading in the positive column. Dow up 22 points Nasdaq up 12 points and S&P 500 up 3.96 points.

Stocks of various exchanges were trading higher at mid-day. Chicago Board of Trade (BOT: chart) was up $2.37 to $117.42 and International Securities Exchange (ISE: chart) was up $2.16 to $44.73. NYSE Group (NYX: chart) was up 5 cents to $57.95, however, Chicago Mercantile Exchange (CME: chart) was down 40 cents to $454.40.


10:30AM Volatility erases early gains in India.
The Sensex on BSE ended 9 points lower, to finishing at 11,502.62. The index lost 117 points from the day’s high of 11,619.86. The turnover on BSE was Rs 3,063 crore higher than Monday''s Rs 2,687 crore. The market-breadth ended in negative territory in contrast to a strong breadth earlier during the day, as blue-chips retreated in late trading. On BSE, 1,284 shares declined, 1,237 stocks advanced and 67 shares were unchanged.

Refinery shares plummeted as crude price strengthened. HPCL dipped 6% to Rs 269, BPCL sank 6% to Rs 348 and Indian Oil Corporation plunged 5% to Rs 446.50. Refinery shares surged last week as a sharp decline in crude oil prices eased worries about their losses on marketing of petrol and diesel. Power equipment large-cap BHEL shed 2.3%, to Rs 2,229.

Pharmaceutical company Ranbaxy lost 2% to Rs 392.45, while Dr Reddy’s Lab shed 2.3% to Rs 1,438 on profit-taking after a recent rally. Hindustan Lever fell 1.78% to Rs 231.65 and Tata Motors sank 1.88% to Rs 843.05. Other auto shares also dropped on fears of possible rise in domestic retail prices. Ashok Leyland was off 1.4% to Rs 39.65, Mahindra & Mahindra lost 1% to Rs 657, Bajaj Auto shed 1% to Rs 2745 and car large-cap Maruti Udyog slipped 0.7% to Rs 834.

Index large-cap Reliance Industries declined in late trading from the positive territory it held for most of the trading session. The stock edged down 0.89% to Rs 1,058.50. It came sharply off the session’s high of Rs 1,084.80. Software large-cap, Infosys, was off 1.2% to Rs 1,776.

HDFC Bank led the advancers. HDFC Bank gained 2.31% to Rs 856.10, Reliance Energy moved up 2.28% to Rs 458.55, HDFC jumped 1.95% to Rs 1,315, Hindalco advanced 1.49% to Rs 163.80 and Tata Steel rose 1.14% to Rs 514.05. Sterlite Industries gained 3% to Rs 416 in the wake of its approval of the sale of its power transmission division to focus on the metals business. Biocon advanced 2% to Rs 387. Paper company, Ballarpur Industries, rose 2.4% to Rs 113.50 following its report of a 68% surge in net profit in Q4 June 2006 to Rs 67.88 crore.

9:45AM Market averages post gains in the early trading.
Market averages in the first half hour of trading are indicating rising trend. Buy orders for tech stocks, small cap stocks and companies with international earnings are trading higher. Caterpillar, Google, MasterCard, Apple, Jones Lang LaSalle and Manitowoc are trading up 1%.

Bear Stearns upgraded XM Satellite Radio (XMSR: chart) lifting the stock higher by 97 cents. Toll Bros (TOL: chart) reported 19% decline in earnings but managed to deliver better than lowered expectations two weeks. The stock opened 80 cents or 3% higher in the early trading.

In the morning trading gold is trading $4 per ounce lower and oil is near unchanged. Market is awaiting formal response from Iranian government to the call from the U.N. to halt uranium enrichment program.

9:15AM Toll Brothers report Q3 profit decline of 19%.
The luxury home builder, Toll Bros. (TOL: chart) reported third quarter earnings of $1.07 compared to $1.27 a year ago. The company reported in the quarter revenue of $1.53 billion vs. $1.55 billion a year ago and earnings of $174.6 million compared to $215.5 million a year ago.

In the fourth quarter ending October 2006, the company expects to deliver between 2,500 and 2,800 homes at an average price of between $695,000 and $705,000.

Chairman and Chief Executive Officer, Robert I. Toll also said that the continuing malaise in the housing market is the result of an oversupply of inventory and a decline in confidence. The speculative buyers of 2004 and 2005 are now sellers; builders that built speculative homes are trying to move them by offering large incentives and discounts; and some anxious buyers are canceling contracts for homes already being built. This overhang in supply and the aggressive discounting of many builders is undermining consumer confidence and keeping buyers on the sidelines as they continue to worry about the direction of home prices.

The company also noted in the press release that it has lowered its position of lots it controls through options and direct ownership. At the end of the third quarter the number of lots controlled by the company decreased to 82,900 from 91,200 at the end of the second quarter.

The Company revised its earnings guidance for fiscal 2006 to between $4.41 and $4.63 per share, compared to its previous guidance of between $4.69 and $5.16 per share.

7:30 Japanese benchmark index leads regional indexes higher.
Asian markets finished higher on Tuesday. The Nikkei 225 Average in Japan finished 1.3% higher at 16,181.17. Honda advanced 2.3%, while Nikon gained 2.2%, reversing declines on Monday. Star Micronics surged 4.8% after the company lifted its earnings forecast for the year to February on Monday. Shares of Nippon Oil advanced 3.7% in the wake of reports that the company will begin selling hydrogen-powered fuel cells to residential customers as early as next year. Japanese financial stocks were also higher, led by Nomura Holdings, which gained 3%. Nikko Cordial added 1.9%, and Daiwa Securities Group gained 3.2%.

Hong Kong''''s Hang Seng Index ended up 0.83% at 17,149.75. Energy stocks led the gainers. PetroChina moved up 3.2% on hopes of strong first-half earnings. Other Chinese oil-related companies also gained. Cnooc gained 2.7%, Sinopec increased 1.3% and China Oilfield Service surged 8.8%.