U.S. MARKET AVERAGES

Market was under pressure right at the opening bell and never recovered. Market had lot to digest on earnings and economic data.

The U. S. stock markets were focused on economic data releases, including consumer prices, housing starts and industrial production reports for July. The July CPI was up 0.5% higher than 0.4% anticipated industrial production rose modest 0.1% due to weaker output from mining and utilities and home builders continued to build at a rate of 2.04 million and new building permits came in at all-time high of 2.167 million.

New residential construction declined in July from previous month but grew at slower pace compared to a year ago. In home construction fell 5.4% after rising more than 11% in June. Home construction in July in South fell after rising at a brisk rate in June.

Fed's campaign of steady interest rate hike will continue as energy and food prices continue to rise. However the core inflation remains under control. Overall energy prices in July increased 3.8% including gasoline price hike of 6.1%. Housing and medical-care prices rose 0.4% but prices of new automobiles fell 1% for the first time in 30 years.

Market also had to digest earnings from several retailers including Wal-Mart, Home Depot, Staples, J C Penney and Estee Lauder.

In general earnings releases have outperformed the expectations, except Wal-Mart expressed caution for the rest of year and displayed some worries that core customer base may be affected by the rising oil prices.

Shares of BJ’s Wholesales Club, Applied Films, American Eagle Outfitters, Deer & Company and Dick’s Sporting Goods declined on earnings and lower revenue concerns.

In corporate news

Wal-Mart , the world’s largest retailer, announced 2Q net income rise of 6%, or 67 cents a share compared with 62 cents a year ago on 10.2% higher sales. The quarterly results beat analysts’ expectations of 65 cents a share, but failed to meet revenue forecasts of $77.46 billion due to higher gasoline prices.

Home Depot, home-improvement store chain, posted 14% profit increase in the 2Q on higher sales. The company earned 82 cents per share, up from 70 cents last year on revenue of $22.31 billion. Same-store sales increased 4% in the second quarter.

Staples, office products retailer, posted 2Q 20% profit rise of 20 cents a share vs. 16 cents a year ago on 12% higher revenue of $3.47 billion.

Hewlett-Packard is expected to report higher sales and profit later in the day. Gateway reported it swung to a profit in the 2Q on record sales, but lowered its sales and profit outlook for2005.

INTERNATIONAL MARKET NEWS

Asian-Pacific markets ended mixed after edging higher in early trading on retreating crude-oil prices and U.S. equity gains. The regional markets were also helped by overnight advance in Wall Street as investors bought tech stocks. The banks were the leading losers, falling from recent highs. The Nikkei rose 0.5% extending last-week gains on restored confidence in the economic recovery of the country. Averages in Hong Kong fell 0.2% and in South Korea dropped 1.2%.

European markets finished in the negative territory deserting earlier highs after a low start of the U.S. stocks, reflecting economic data. Telecommunication stocks stayed in the spotlights throughout the whole session, reflecting sector consolidation moves, with Deutsche Telecom down 0.7% and KPN down 1.2%. The German DAX 30 lost 0.5%, the French CAC 40 declined 0.8%, and London’s FTSE 100 fell 0.2%.


ENERGY, METALS AND CURRENCIES MARKETS

Oil prices resumed their way upward, reflecting higher inflation figures. At close in NY, U.S. light sweet crude lost 19 cents to $66.08 a barrel. Gasoline September future rose 1.1% to $1.9836 a gallon and natural gas rose 2.2% to $9.753 BTU. At close in London, Brent added 12 cents to reach $65.70.

Gold declined in European trading as the U.S. dollar advanced. In mid-morning London trading gold stood at the recommended price of $440.85 per troy ounce, down from $441.35. In Hong Kong the precious metal fell $1.50 to close at $441.25. Silver opened at $6.96 per ounce, up from $6.95.