[R]2:30PM Joy Global earnings lift stocks of construction equipment stocks.[/R]
Joy Global (JOYG: chart) reported third quarter sales rose 17%. Net income in the quarter rose to $1.53 per share from $0.25 a year ago. The current quarter earnings included a reversal of tax allowances that added to $111 million or 90 cents per share.

The stock jumped 17% or $6.30 on the news and lifting other equipment stocks with it. Terex (TEX: chart) gained 8% and Manitowoc (MTW: chart) gained 4%. The mining company equipment maker offered upbeat outlook for the mining industry. The company chairman and chief executive John Hanson said that we see no peak in demand for our products and services and, with the exception of short-term softness in the U.S. coal markets, our customers’ commodity markets continue to exhibit robust conditions.”

Total revenues in the third quarter were $599 million, a 17 percent increase over the $513 million reported in the third quarter of 2005. This increase was particularly evident in aftermarket parts and services revenues, which rose by 24 percent from the prior year’s third quarter. Aftermarket revenue growth was strong in both operations, particularly at Joy Mining with a significant rise in parts and complete machine rebuilds. Aftermarket revenues were 63 percent of total quarterly revenues compared with 59 percent in the third quarter of fiscal 2005. Original equipment revenue growth in the quarter was limited by mining shovel capacity at P&H Mining.

Gross margins rose in the quarter to 32 percent of sales from 28 percent of sales last year. Operating leverage in the quarter was again very strong, with incremental profitability of 44 percent for Joy Global in total. This unusually high operating leverage was due to a combination of factors, including a higher percentage of aftermarket revenues at Joy Mining, favorable product mix in original equipment revenues overall, good recovery of material cost increases and the stringent control of overhead costs.

The company repurchased 3.8 million shares in the quarter and has purchased 5 million for the year so far. The company reported in the conference call that only $50 million of capital is left in the stock buy-back plan.

[R]12:30PM European markets ended lower.[/R]
European markets closed under the flat line. In a light trading session market sentiment was hurt by speculations that the European Central Bank will raise interest rates in a month after it kept them on hold at 3%, as expected, on Thursday. Several mixed earnings reports also contributed to the weakness. Mining and tech stocks like Anglo American and STMicroelectronics led decliners. The food and drinks sector was also under pressure after No. 1 distiller Diageo fell 2.5%. The U.K’s FTSE 100 dropped 0.4%, followed by the French CAC 40, down 0.3%, and the German DAX 30, down 0.1%.

Oil prices slipped after BP PLC officials said the company''s Prudhoe Bay production could be restored earlier than expected. Light crude October delivery fell 33 cents to $69.70 a barrel. Gasoline fell 2 cents to $1.775 a gallon. Natural gas dropped 10 cents to $6.19 per 1,000 cubic feet. London Brent October delivery slipped 17 cents to $70.01. The dollar gained ground versus major currencies. The euro traded at $1.2806, down from $1.2829. The dollar bought 117.23 yen, up from 117.13. The British pound stood at $1.9021, down from $1.9035. European gold prices extended gains. In London the precious metal traded at $619.40, up from $617.60 per ounce. In Zurich gold traded at $623, up from $618.18. Silver closed at $12.47, up from $12.44.


[R]11:30AM Stock markets rebounded from early strength.[/R]
U.S. stocks rebounded from earlier strength, as investors awaited a speech on productivity from Federal Reserve Chairman Ben Bernanke expected to provide new clues about inflation and interest rates. In early hours of trading, stocks were supported by news that core consumer inflation last month dropped to its weakest gain so far in 2006, adding to hopes that Fed Reserve rate hikes might come to an end soon.

Significant strength emerged in the gold sector due to an increase by the price of gold as well as news of Goldcorp''s (GG: chart) acquisition of Glamis Gold (GLG: chart). Glamis shares jumped 20%. Meanwhile, semiconductor stocks came under pressure, dragged by STMicroelectronics (STM: chart) after Citigroup downgraded its rating on the chip maker to ‘sell’ from ‘hold’. The health insurance, networking, and energy sectors also moved to the downside. Ford Motor Co. (F: chart) was also in focus as the carmaker said it is considering the sale of all or part of its Aston Martin luxury brand. In late morning trading, the Dow Jones industrial average was marginally lower, down 4.08, or 0.04%. The Standard & Poor''s 500 index lost 0.69, or 0.05%, while the Nasdaq composite index fell 1.14, or 0.05%.Bonds continued to move higher, with the yield on the benchmark 10-year Treasury note falling to 4.74% from 4.76% late Wednesday.

[R]Industrial production slowed less than expected.[/R]
Thursday morning, the Department of Commerce released its report on orders for manufactured goods in the month of July, showing that orders fell less than economists had been expecting. The report showed that orders for manufactured goods fell 0.6 percent in July following an upwardly revised 1.5 percent increase in June. Economists had expected orders to fall 0.8 percent compared to the 1.2 percent increase originally reported for the previous month. The drop in factory orders came as orders for manufactured durable goods fell 2.5 percent in July following a 3.3 percent increase in June. The drop in durable goods orders was downwardly revised from the 2.4 percent decrease reported last week. An increase in orders for manufactured non-durable goods helped to offset the decrease in durable goods orders, with non-durable goods orders increasing 1.6 percent in July. The report also showed that shipments of manufactured goods were nearly unchanged in July after falling 0.1 percent in June, while inventories of manufactured goods rose 0.6 percent in July following a 0.9 percent increase in June. Subsequently, the inventories-to-shipments ratio edged up to 1.17 in July from 1.16 in June.


[R]10:30AM The Sensex ends in the red due to expiry of derivatives.[/R]
The Sensex on BSE lost 24.87 points, or 0.21%, to close at 11,699.05. Index traded in a narrow range for most of the trading session. The market-breadth was weak as 1,688 shares declined, 827 advanced and 72 shares were unchanged. The turnover on BSE was Rs 2,758 crore compared to Wednesday’s Rs 2,717 crore. From the Sensex stocks, there were 11 advances to 19 declines. On National Stock Exchange total turnover was Rs 7,870 crores.

ITC, HDFC Bank, Reliance Petroleum and Tata Power advanced on short covering in the derivatives segment and due to expiry of futures and options contracts for August 2006. ITC climbed 2.2% to Rs 191.50, Reliance Petroleum surged 4.6% to Rs 66, HDFC Bank gained nearly 2% to Rs 857 and Tata Power advanced 1.2% to Rs 532.50. Some IT stocks also advanced, as IT large-cap Infosys rising 0.3% to Rs 1,805 and software company TCS edging up 0.6% to Rs 990. However, Wipro sank 1.8% to Rs 516 and Satyam Computer lost 1% to Rs 811.

PSL advanced 1.3% to Rs 201 after the company announced it had secured a pipe coating order worth $21 million from Reliance Ports and Terminal. Voltas soared 7% to Rs 947.90 on hopes that it will soon unveil a record date for a liberal 10-for-1 stock split.

TV broadcasters declined after Telecom Regulatory Authority of India issued a tariff order prescribing rates for pay channels. Governemt set Rs 5 per channel and a minimum of four month subscription duartion. Cable companies can not charge for installation or activation of the service. Traders worried that this low fee structure will cut in the revenue outlook of the company. Zee Telefilms plunged 4.4% to Rs 277, TV 18 India slid 8% to Rs 595, Sun TV was off 2.4% to Rs 1,195 and NDTV was down 2.9% to Rs 194.90.

Steel shares lost on reports that producers may cut prices from September 2006. SAIL dipped 4% to Rs 71.70 and Tata Steel lost 1.7% to Rs 497.65. Cement shares also fell on profit-taking. ACC lost 1.4% to Rs 909, Gujarat Ambuja Cements declined 1.6% to Rs 112.75 and Grasim lost 0.3% to Rs 2,253. Index large-cap Reliance Industries declined nearly 1% to Rs 1,119.

Moser Baer witnessed volatile session, soaring about 9% in opening trade to reach Rs 207 level. It then sank to Rs 196 level in mid-morning before rebounding to Rs 201- 202 level in afternoon trade. A sell-off in mid-afternoon trade made the the stock retreat to Rs 190 level.

Several small-cap and mid-cap stocks plunged. Spanco Telesystems, Gulshan Sugars, GR Cables, Atul Auto, Megasoft, GEI Hamon Industries, Manugraph, Rajesh Exports, Whirlpool, Cosmo Films, Archies Greetings, Bombay Rayon, Ricoh India, Gujarat Apollo Equipment and Flex Industries slipped between 5% - 10.7% for the day.