U.S. MARKET AVERAGES



The lackluster morning trading got strong boost from the housing market data. June housing market suggested dynamic housing market across the country with the median single-family home prices rising 14% from a year ago to $219,000.



The earnings releases before the market opening showed Xerox still lagging in its restructuring efforts and released earnings well below market expectations. Other earnings negative surprises from the notable companies this morning include, Arch Coal, Bell South and Valero LP. Fording Canadian Coal Trust this morning reported earnings jump of nine fold to $123 million in the second quarter. Market is awaiting earnings from American Express.



Despite few weak earnings market internals suggest strong undertone to today’s trading. 247 stocks on NYSE and 61 stocks on NASDAQ are trading at new highs.
ECONOMIC NEWS

Existing-home sales surpassed market expectations and reached another record in June as low mortgage interest rates and favorable market conditions continued to attract buyers, according to the National Association of Realtors.

Total existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 2.7 percent in June to a seasonally adjusted annual rate of 7.33 million from an upwardly revised pace of 7.14 million in May. Sales were 4.4 percent above the 7.02 million-unit level in June 2004; the previous record was 7.18 million in April of this year.

The national median existing-home price for all housing types was $219,000 in June, up 14.7 percent from June 2004 when the median price was $191,000; this is the strongest increase since November 1980 when annual appreciation was 15.6 percent.
INTERNATIONAL MARKET NEWS

European markets closed up boosted by U.S. stocks gains and gains in the oil and gas sector which offset losses from technology companies and from Groupe Danone. The U.K.’s FTSE 100 ended up 0.6% as a top gainer, helped by oil majors with investors digesting earnings reports from important companies such as Vodafone, Reckitt Benckiser and Pearson. Averages in Germany and France added 0.1% and 0.2% respectively.


Asian benchmarks closed mostly higher. Japan’s Nikkei rose 0.6%, lifted by top domestic companies ahead of the new-week earnings reports and U.S. markets gains Friday. Among the gainers were energy companies benefiting from strong crude-oil prices and commodity-based firms, such as Teikoku Oil which gained 1.6% and Nippon Mining which added 3.3%. Australia’s All Ordinaries advanced 0.3%, South Korea’s Kospi climbed 1.4%, and Taiwan’s Taiex was up 0.6%. Averages in China and Singapore ended down.

European stocks traded mixed at mid-day, reflecting positive corporate news and losses from tech companies and food producers which offset gains made by the oil and gas sector. U.K.’s FTSE made the strongest performance, climbing 0.4% as markets continue to recover from last week’s terrorist attacks and traders are in the process of digesting earnings updates from Vodafone and Pearson. The German DAX 30 was flat, trading amid a rise in import prices of 1.6%. The French CAC 40 added 0.1% with traders’ attention focused on France Telecom which is likely to win the auction for Spanish operator Amena and Danone which slid 8.3% after PepsiCo reported it wasn’t planning to bid for the French dairy company.

ENERGY, METALS AND CURRENCIES MARKETS

Gold futures climbed above $426 per ounce for the first time in two weeks as boosted commodity demand is expected after the revaluation of the Chinese currency last week. Gold for August delivery traded at $426.40 per ounce on the NYME. Silver added 0.5 cents to reach $7.12 per ounce. Copper prices continue rising on global supply concerns and September contract was up 0.05 cents to reach $1.618 a pound.

The euro regained some ground against the dollar climbing to $1.2085 after Friday’s drop to $1.2043 amid inflationary suggestions.

Crude-oil futures dropped after Friday’s intense rally as supply fears eased and are further expected to decrease and slip below $55 a barrel in the last quarter. Light sweet crude for September delivery declined 69 cents to $57.96 in electronic trading on the NYME after it rose $1.52 Friday. Heating oil dropped 1 cent to $1.5715 a gallon. London Brent September delivery lost 49 cents to trade at $57.09 on the International Petroleum Exchange.

Gold changed little after falling Friday as the dollar gained against the euro. Gold for immediate delivery rose 20 cents to $425.20 per ounce and 30 cents for August delivery to reach $425.30 per ounce in after-hours trading on the NYME.

China’s yuan gained against the U.S. dollar after currency limits were relaxed for the first time in a decade. The yuan ended trading at 8.1097 against the dollar, up from 8.11. Against other currencies the greenback was firm, trading at 111.55 yen and $1.2052 per euro.