11:30AM Weaker housing and airline stocks helped limit gains.
Stocks traded in the positive in late morning trading as stronger-than-expected quarterly results from major companies like Cisco (CSCO: chart) and Walt Disney (DIS: chart) generated buying interest. Cisco contributed to a considerable strength in the tech sector and the Nasdaq, providing an upbeat outlook. Still, the three major averages came well off their best levels for the session, reflecting weakness in the airline and housing sectors. An increase by the price of oil also made some traders reluctant to continue buying stocks. In late morning trading, the tech-heavy Nasdaq composite index climbed 20.96, or 1.02%. The Standard & Poor's 500 index rose 7.25, or 0.57%, and the Dow Jones industrial average added 34.41, or 0.32%. Bonds fell in response to the Fed decision, with the yield on the benchmark 10-year Treasury note rising to 4.95% from 4.92% late Tuesday.


Crude oil and gasoline inventories declined.
Crude oil inventories declined again in the most recent week, according to government statistics released Wednesday. Gasoline stockpiles fell sharply as well. In addition, inventories of distillate fuel oil edged lower, breaking a recent streak of gains. The Department of Energy''s Energy Information Administration said that crude oil inventories fell 1.1 million barrels in the week ended August 4. Specifically, the measure dropped to 332.6 million barrels from the previous week''s level of 333.7 million barrels. This followed a decline of 1.8 million barrels in the previous week. Oil inventories for the August 4 week were 4.3% higher than last year. Meanwhile, gasoline inventories showed a week-over-week decline of 3.2 million barrels. This followed a draw down of 100,000 barrels in the previous week. The level of gasoline inventories was 0.8% above last year. Distillate fuel oil had an inventory decline of 200,000 barrels during the week. This ended a recent streak of gains, which included an advance of 700,000 barrels in the previous week.


10:30AM India rallies on Fed move and strong Asian markets.
The Sensex in India advanced 130.21 points or 1.1% to close at 11,145.18. The turnover on BSE was Rs 2,889 crore higher than Tuesday’s Rs 2,142 crore. The market breadth was strong. with 1,653 shares that rose and 750 that declined. Only 84 shares were unchanged. Among the Sensex constituents, there were 25 advances to five declines.

PSU bank shares soared on expectations that domestic interest rates will not increase at least in the short term. Bank of India surged 7% to Rs 127.70, Union Bank of India gained 6% to Rs 112.90, Syndicate Bank rose 5.4% to Rs 69.30, Indian Overseas Bank advanced 3.6% to Rs 91.95, Oriental Bank of Commerce moved up 3.6% to Rs 179.50 and Canara Bank climbed 2.8% to Rs 205.50. State Bank of India added 4.6% to Rs 870 after Japanese investment firm SBI Holdings agreed to form a $100 million venture capital fund with India''''s largest lender.

Metal shares were in focus. National Aluminium Company gained 3.8% to Rs 202, Hindalco advanced 2.7% to Rs 164.75 and Sterlite Industries gained 2% to Rs 382.70. Steel large-cap Tata Steel rose 1.3% to Rs 518. IT stocks advanced on renewed buying. Satyam Computer gained 2.8% to Rs 764.50, TCS rose 1.3% to Rs 968, Infosys edged up 1.2% to Rs 1704, and Wipro rose 1.1% to Rs 507.50. Engineering & construction company L&T rose 1.7% to Rs 2,325 on a strong order-book. Cigarette large-cap ITC rose 3.8% to Rs 179 on 15.6 lakh shares were traded on BSE.

Auto shares neglected high oil prices, supported by strong sales for July, and on expectations of strong sales in the current festival season. Tata Motors jumped 4% to Rs 797.50, Mahindra & Mahindra gained 2.2% to Rs 613.05, Ashok Leyland advanced 1.4% to Rs 37.45, and car producer Maruti Udyog gained 1.4% to Rs 798. Hero Honda rose 1.6% to Rs 679 after the company said it will spend Rs 1,900 crore to set up a new plant in Uttaranchal. ONGC gained 1.3% to Rs 1,205 after the company said on Tuesday that it will set up a petrochemical complex with an investment of Rs 13,600 crore ($2.9 billion) by 2010.

Index large-cap Reliance Industries rose 0.7%, to Rs 985. Reliance Industries said on Tuesday it had shut some plants at the Hazira complex because of flooding in adjoining areas. BHEL, moving up 0.8% to Rs 2184, recovered after an initial fall in the stock caused by the indecision of the board on bonus issue and stock-split proposals. Hindustan Oil Exploration jumped 16% to Rs 135.85 after the company set a rights issue price of Rs 76 per share. The shareholders of the company will get a share for every three already held. Aventis Pharma rose 5.7% to Rs 1,400. Data showed a block deal of 1,72,883 shares was made on the BSE at Rs 1,350 per share.


9:45AM Stocks opened higher on Cisco’s quarterly results.
Better-than-expected earnings from Cisco Systems Inc. and the Walt Disney Co., as well as easing concerns over interest rates after the Fed decided to pause, raised investor optimism and boosted stocks in early trading.

Cisco (CSCO: chart) jumped 13% as the 22% jump in its Q2 profits led the maker of computer networking systems to raise its full-year estimates. Cisco''s year-over-year gains and bullish profit outlook supported the tech sector, leading the tech-heavy Nasdaq up 1.46%. Cisco helped to lead the networking sector higher, contributing to a 3.7% gain by the Amex Networking Index. Some internet and semiconductor stocks also posted substantial gains. Outside the sector, Disney (DIS: chart) rose 3.3% after it reported stronger-than-expected quarterly profits, citing strength in all of its businesses, particularly its movie studio. Among other gainers, Federated Department Stores (FD: chart) rose 5.2% as its quarterly profit doubled from a year ago, and the retailer raised its full-year earnings forecasts.

Meanwhile, housing stocks extended recent declines, dragged by Toll Brothers (TOL: chart), down 7% on disappointing guidance. Toll Brothers announced preliminary Q3 results, reporting a decline in home building revenues due to lower unit volumes. In the first hour of trading, the technology-focused Nasdaq composite index surged 30.07, or 1.46%. The Standard & Poor''s 500 index rose 9.80, or 0.77%, and the Dow Jones industrial average added 55.79, or 0.5%. Bonds fell in response to the Fed decision, with the yield on the benchmark 10-year Treasury note rising to 4.96% from 4.92% late Tuesday.


9:00AM Stock futures pointed to a higher start on Cisco and Disney.
U.S. stock futures were set to recover from declines in the previous session, contributed by worries about slowing economy. The positive sentiment Wednesday was generated by stronger-than-expected quarterly results from network equipment maker Cisco Systems Inc. and media company Disney.

Cisco (CSCO: chart) reported after the bell Tuesday Q4 earnings that remained flat with last year as option and merger costs offset a 21.3% rise in sales. However, the company''s fourth quarter earnings, excluding items, as well as quarterly sales came in above analysts'' estimate. Media conglomerate Disney (DIS: chart) beat estimates reporting net income growth of 53 cents per share, compared with 39 cents last year due to improved sales and one-time gain related to its acquisition of Pixar Animation Studios. Cisco’s shares jumped 12% in pr-market trading, while Disney’s rose 4%.

In other corporate news, Toll Brothers (TOL: chart), the largest U.S. luxury home builder, said quarterly new orders and revenue fell, prompting a sign of weakness in housing developments. The home builder''s shares fell 2.2% on Inet. Federated Department Stores Inc. (FD: chart) posted a higher quarterly profit and raised its earnings forecast for the second half of the year. Shares of the retailer jumped 4.2%. Standard & Poor''s 500 futures rose 4.5 points, above fair value. Dow Jones industrial average futures were up 43 points, and Nasdaq 100 futures advanced 9 points.

Bluelinx Holdings Inc., (BXC: chart), building products provider, reported Q2 earnings of 31 cents a share, up from a year-ago profit of 25 cents a share in the same period a year earlier. If not for a charge related to its mortgage refinancing, the company posted a profit of 41 cents a share. Revenue fell 7.3% to $1.38 billion from $1.49 billion in the same period a year earlier, due mainly to a decline of almost 17% in sales of structural products as the housing market softened. The company missed analysts’ estimate for a profit of 48 cents a share.

The Perrigo Co, (PRGO: chart), maker of healthcare and pharamceutical products, reported Q4 earnings of 13 cents a share, after a loss of 7 cents a share in the same period a year ago. The company. said sales climbed to $355.1 million from $324.5 million. The company met analysts’ estimates for earnings of 13 cents a share. Perrigo said it now expects 2007 earnings of 86 to 91 cents a share, excluding 2 cents of restructuring costs.

Aramark Corp, (RMK: chart), food-services and uniform provider, reported that Q3 income fell to 19 cents a share, from 38 cents, a year ago. If not for charges and adjustments, earnings would have been 34 cents a share. Sales rose to $2.93 billion from $2.79 billion. Analysts forecast earnings of 36 cents a share.