U.S. MARKET AVERAGES

The U.S. market is holding on to its early gains on the strand of a positive report on the service sector activity, showing strong gains, or an increase of 65% in August, an improvement from last month’s 60.5%.

Another boost for the stock markets was provided by falling oil and gasoline prices, which took the downward direction when the International Energy Agency decided to release 60 million barrels of oil from strategic reserves. Recently light sweet crude was trading down $1.52 at $66.05 a barrel on the Nymex, while gasoline fell 8 cents to $2.10 a gallon. The renewed exploitation of two oil facilities also helped the market up.

Some large companies like Coca Cola and Home Depot gained on expectations of rebuilding after Hurricane Katrina and an analysts’ upgrade, and thus contributed to the strong performance of the stock averages.

The utility sector, together with the financial and retailer sectors are the leading gainers of the day. The technology sector provided a firm boost to the market, including a considerable advance in the Internet sector.

Apple rose 5% on speculations about an upcoming product announcement.
Protein Design Labs advanced on news of positive data for its heart drug.

The energy sector is the leading loser in morning trading, being one of the very few major sectors in the red.

JoS A Bank Clothiers, retailer, posted 2Q earnings rise of 55.8% and raised its full-year profit outlook.

Wal-Mart, the world's No.1 retailer, added 64 cents to $45.19. The company said sales at its U.S. stores open at least a year rose within its forecast range in the week after Hurricane Katrina struck.

Home Depot, the largest home-improvement retailer, added 59 cents to $40.92 amid optimism the company may benefit from post- Katrina rebuilding efforts. The hurricane left a $100 billion trail of destruction, according to Risk Management Solutions Inc., an insurance-industry consultant.

ECONOMIC NEWS

The Institute for Supply Management's measure of financial services, retail trade and other non-manufacturing businesses climbed to 65 from 60.5 in July. A reading above 50 indicates expansion.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks ended the session mixed after trading in the positive at mid-day on crude-oil prices down at $66.46 a barrel. The Nikkei declined 0.3% as investors digested domestic economic data and took profit in steel and retailer stocks sell-off. Across the region, Hong Hong’s Hang Seng lost 0.4%, while South Korea’s Kospi gained 0.7%. The dollar edged up versus the yen to 109.45.

European markets closed the session higher, making solid gains on merger and acquisition news coming from the utility sector, a positive earnings report from the French insurer AXA and strong performance of the U.S. market averages. Declining oil prices also provided support to the stock markets. The German DAX 30 added 1.2%, the French CAC 40 rose 1%, and London’s FTSE 100 climbed 0.4%.

ENERGY, METALS, CURRENCIES

Oil prices declined as oil facilities have started recovering. Light sweet crude for October delivery fell $1.12 to $66.45 in New York on the Nymex. Gasoline futures fell 3.77 cents to $2.1460 a gallon. London Brent was up 46 cents to $65.31.

Gold fell in European trading as the U.S. dollar edged up. In London gold stood at $443.50 per troy ounce, down from $445.00. In Hong Kong the precious metal lost $2.50 to close at $443.35. Silver closed at $7.02, down from $7.05.

The U.S. dollar advanced against other major currencies in European trading. The euro was quoted at $1.2472, down from $1.2521. The dollar bought 109.68 yen, up from 109.16. The British pound stood at $1.8405, down from $1.8443.

EARNINGS NEWS