U.S. MARKET AVERAGES

In the first trading hour stock markets declined, affected by growing economic concerns after the Commerce Department released data, indicating the consumer spending for July exceeded personal incomes for the same month which happens for the second time during the last 46 years. The 1% growth in consumer spending contradicts the lower-than-expected personal incomes rise of only 0.3% and the disparity between them largely falls on the back of high gasoline prices as crude-oil reached record peaks. On Thursday crude futures are stable as oil production in the Gulf Coast is coming back in the play.Light sweet crude traded up 6 cents at $69 a barrel.

Retailers, led by Wal-Mart, Target Corp. and Costco Corp. posted better-than-expected sales for August.Wal-Mart Stores Inc. reported a 3.3 % increase in sales for August, just missing Wall Street's 3.4% forecast. The gains, however, were positive considering the nation's record gasoline prices, which hit Wal-Mart's lower-income customers disproportionately. Dow component Wal-Mart edged 4 cents higher to $45.

Costco Wholesale posted a 9% growth in comparable August sales. Haggar Corp. said it has agreed to be purchased by Infinity Associates, Perseus and Symphony Holdings for $212 million.

IBM has signed a global contract with Dutch global bank ABN AMRO worth about 1.5 billion euro over 5 years.

Novartis, Swiss pharmaceutical company, offered $4.5 billion to gain full control of U.S. vaccines maker Chiron. Novartis already owns just over 42% of Chiron.

ECONOMIC NEWS


The Department of Commerce released the report which indicates that personal spending in July has significantly increased to 1% compared with 0.8% in June matching economists’ expectations.

The report also showed 0.3% increase in personal income for July after an unrevised increase of 0.5% in June. Economists had expected growth of 0.6%.

The Commerce Dept. also said that prices rose 0.3 percent in July after coming in unchanged in the two previous months. Excluding food and energy, prices rose by a more modest 0.1 percent in July after coming in unchanged in June.

The U.S. Department of Labor revealed Thursday that initial jobless claims came in at 320,000 for the week ended on August 27, an advance of 3,000 from the previous week's revised total.

The 4-week moving average for initial claims, which flattens out the week-to-week volatility, rose 1,250 to 316,750. Continuing claims for the week

The August data on manufacturing from the Institute for Supply Management is also scheduled today with expectation of the reading to advance to 57 vs. 56.6.

Truck and auto sales for August are forecasted to drop vs. the previous month. Economists expect car and light truck sales dropping to an annual rate of about 14.1 million from July's 17 million, fueled by automakers' offer of employee discounts.

Same-store sales likely will rise about 4 percent collectively, estimates Mike Niemira, chief economist at International Council of Shopping Centers. That will be slightly ahead of the 3.8 percent same-store sales gain the retailers have posted so far this year.

Major auto makers report August sales throughout the day. Analysts anticipate August's seasonally adjusted annual rate, or SAAR, for U.S. auto sales to fall to a rate in the 16.7 million to 16.8 million vehicle range, which is in line with the same period in 2004.

The Commerce Department is due to release the construction spending report for July at 10 a.m. Economists forecast spending up 0.5 percent for July.

INTERNATIONAL MARKET NEWS

Tokyo hit a four-year closing high, following U.S. news that government would tap into oil reserves and after results from a poll implied the ruling coalition would win this month's general election. Tokyo's Nikkei 225 index added 0.8%, to 12,506.