4:30PM Oil discovery led Devon and Statoil to rise.

-Yield on 10-year bond closed at 4.78% and 30-year bond to close at 4.93%.

-Crude oil dropped 59 cents to $68.70 per barrel and natural gas bounced back 16 cents to close at $6.04 per mBTU.

-Gold gained $14.10 to close at $640.70 per ounce, silver edged 7 cents to $13.14 and copper gained 16 cents to close at $3.63.

-Asian Markets closed lower except Japan, Philippines, Australia and South Korea. Manila led the region with a gain of 0.9%, Sydney edged up 0.4%, Tokyo and Seoul advanced 0.17% but Hong Kong and Thailand fell 0.4%. India, Indonesia and Singapore were nearly unchanged.

-European markets closed lower led by a decline of 0.6% in France and Spain and 0.4% loss in Germany and the Netherlands. Switzerland and the UK were unchanged but Norway gained 0.45% and Russia advanced 1.3%.

-In Latin America, Brazil and Mexico lost 0.9% and 0.6% respectively, but Chile and Argentina gained 0.6% and 0.1% respectively.

Oil discovery in the Gulf of Mexico region by a consortium of three companies led by Chevron helped to improve stocks of oil companies; however, general market did not make significant headway. Nasdaq gained 12.5 points, Dow rose 5.13 points and S&P 500 edged only 2.24 points at close. Trading volume on NYSE trading system crossed 2 billion shares and on Nasdaq system was above 1.7 billion shares.

Oil discovery in the Gulf of Mexico region lifted stocks of three partners (Devon Energy, Stat Oil and Chevron) in a consortium led by Chevron. Chevron reported that test wells were drilled in 300 square mile region with the deepest well reaching 27,000 below sea level or 20,000 below surface level under the sea. The company estimates that the region may hold between 3 billion and 15 billion of oil and liquid gas.

Current U.S. oil consumption runs at of 5.6 billion of oil barrels per year.

Stocks of three partners advanced, led by 12% rise in Devon Energy (DVN: chart) and 2.4% gain in Chevron (CVX: chart) and Norwegian oil company Statoil (STO: chart). Chevron owns 50% and other two companies hold 25% each in the partnership.

Bill Ford decided to step down from the chief executive position and appoint Alan Mulally as the new chief executive and president of Ford Motor Co. Mr. Ford will remain as chairman of the company. Mulally, 61 year old, before the recent appointment, worked as executive vice president at Boeing (BA: chart) and president and CEO of commercial airplane division at the company.

2:00PM Market averages remain under pressure after early gains.
In the early afternoon trading popular averages traded nearly unchanged with a slight negative bias. October delivery of gold was trading up $13 to $634.30 per ounce and silver was up 7 cents to $13.033 per ounce. Oil was trading 53 cents lower on NYMEX trading to $68.66 per barrel.

Biotech firm Adolor Corp (ADLR: chart) dropped 46% to $13.31 on heavy volume of ten times to daily average trading volume, on the report that the two of the three clinical studies for their intestinal treatment drug Entereg did not show statistically significant improvements.

Redback Networks (RBAK: chart) shares were down 14% to $16.04 on stock downgrade from UBS. The broker said that the company is not likely to win a secondary contract for router technology order from Verizon Communicatons (VZ: chart).

Medifast Inc. (MED: chart) fell $1.95 to $9.77 on the report that the cost of acquiring new clients may be rising and questions on the significance of weight loss study. According to a report in a weekly published in Barron’s cited that study may have been focused on too few patients.

The Hershey Company (HSY: chart) fell $2.61 or 4.8% to $51.65 on down grade by J P Morgan. The broker downgraded the stock to ‘Neutral’ from ‘Overweight’ and lowered its 2006 earnings guidance by 8 cents to $2.50 and 2007 guidance by 23 cents to $2.66.

12:30PM European markets closed in the negative.
European markets closed in the negative influenced by a choppy trading on Wall Street after an extended holiday weekend. The oil-services sector was in focus after France's Compagnie Generale de Geophysique agreed to buy U.S. Veritas for $3.1 billion, and Wood Group said it will beat profit forecasts for the year. Shares of CGG dropped 8%, while Wood gained 3.8%. European economic data weighed on markets, after the euro zone purchasing managers index slipped to 57.1 in August from 57.9 in July, missing economist forecasts. The French CAC 40 was the biggest decliner, falling 0.6%, followed by the German CAX 30, down 0.4%, and London FTSE 100, down 0.1%.

Oil prices slipped below $69 on easing supply concerns with the end of the summer driving season. Light crude October delivery fell 86 cents to $68.33 a barrel. London Brent October delivery gained 27 cents to $67.98. The dollar regained strength versus major currencies. The euro traded at $1.2799, down from $1.2863. The dollar bought 116.16 yen, up from 115.89. The British pound stood at $1.8922, down from $1.9061. European gold prices extended gains. In London the precious metal traded at $638, up from $626.40 per ounce. In Zurich gold traded at $634.90, up from $626.40. Silver closed at $13.08, up from $12.98.

11:30AM Stocks lacked direction.
The U.S. stock markets turned to choppy trading Tuesday, with traders expressing some uncertainty about the outlook for the markets. Corporate news and oil prices are expected to be the main market drivers this week as little economic data are due out. Among the biggest gainers Tuesday were oil companies after the discovery of a major new oil source in the Gulf of Mexico by Chevron Corp. (CVX: chart).

One of the biggest decliners on the Nasdaq was Adolor Corp. (ADLR: chart), falling 46.22% on mixed study results for a bowel drug. Another notable tech loser was Redback Networks (RBAK: chart), down 15% on UBS downgrade. Elbit Medical Imaging (EMITF: chart) dropped 6.8% after reporting wider profit loss in Q2. Tractor Supply Co. (TSCO: chart) fell 5.46% following a brokerage downgrade of its stock. Medifast (MED: chart) stood out as one of he biggest decliners on the NYSE, down 16% on profit outlook. Sierra Health Services (SIE: chart) dropped 7.4% on stock downgrade by UBS. Holly Corp. (HOC: chart) lost 4%, while Frontier Oil (FTO: chart) dropped 6.12%.