[R]12:30PM European markets closed sharply lower on higher oil.[/R]
European markets finished steeply lower Monday as a spike in oil prices and concerns over the U.S. Fed Reserve’s decision on interest rates generated negative sentiment. Crude oil jumped over $1 after oil giant BP said it's shutting down its Prudhoe Bay oil field in Alaska due to a corroded pipeline and a small leak. Shares of the company slipped 2.1% in London. The German DAX 30 tumbled 1.7%, followed by the French CAC 40, also down 1.7%, while London FTSE 100 lost only 0.9%.

Oil prices jumped $2 Monday on key oilfield shutdown in Alaska and Middle East concerns. Light crude September delivery climbed 2.8% to $76.85 a barrel. London Brent surged $1.77 to $77.94. The dollar traded mixed versus major currencies. The euro traded at $1.2861, down from $1.2875. The dollar bought 114.98 yen, up from 114.39. The British pound stood at $1.9095, up from $1.9082. European gold prices were mixed. In London the precious metal traded at $650.50, up from $648.50 per ounce. In Zurich gold traded at $650.38, down from $651.25. Silver closed at $12.40, up from $12.36.


[R]11:30AM Commodities stocks helped limit losses.[/R]
Surging oil has kept stocks under pressure since opening hours, but selling pressure remained subdued on cautiousness ahead of the Fed Reserve''s decision on interest rates on Tuesday. In late morning trading, the Dow Jones industrial average fell 37.14, or 0.33%. The Standard & Poor''s 500 index lost 4.24, or 0.33%, and the Nasdaq composite index shed 13.95, or 0.67%. Bonds lost ground as well in advance of the Fed meeting, with the yield on the benchmark 10-year Treasury note rising to 4.91% from 4.9% late Friday.

Airline and other transportation stocks stood out as the biggest decliners amid concerns about rising fuel costs. Notable losses by some biotechnology, disk drive, and defense stocks also helped to lead the major averages lower. Celgene (CELG: chart) dragged the biotech sector lower, falling down 4.4%. At the same time, commodities stocks posted gains, helping to limit the downside move. Shares of BP (BP: chart) lost 1.8% on the Prudhoe Bay shutdown, which would take away 2.5% of the company''s total daily production. However, rival oil producers gained on hopes to benefit from the higher prices. Hess Corp. (HES: chart) rose 0.6%, while Chevron Corp. (CVX: chart) climbed 0.65%.


[R]10:30AM The Sensex falls in a volatile trade due to oil prices hike and U.S. rates.[/R]
The Indian Sensex fell Monday 53.87 points, or 0.50%, to finish at 10,812.64. It had opened slightly lower at 10,863.28 and traded in a range of 100 points. The turnover on BSE was Rs 1,883 crore much lower than Friday''s Rs 2,551 crore. The market-breadth was negative as 1,233 shares declined and 1,151 advanced and 96 shares were unchanged. Among the Sensex constituents, 21 declined while only 9 advanced.

ICICI Bank led the gainers, moving up 4.15% to Rs 570 on 4.60 lakh shares. on expectations that the U.S. Federal Reserve may pause its rate hiking campaign gave the stock a lift. BHEL rose 1.52% to Rs 2,182.50 on 1.86 lakh shares before its board meeting on August 8th, 2006 to consider a bonus issue and a stock-split proposal. Cipla also gained 0.94% to Rs 230, as well as NTPC notched up 0.80% to Rs 120.50 and State Bank of India edged up 0.63% to Rs 813.

Hero Honda led the decliners, plunging 3.10% to Rs 667.20 on 1.07 lakh shares, due to concerns of rising oil prices. Other auto stocks als o sank, like Maruti Udyog declining 2.30% to Rs 765.90 , Tata Motors losing 1.80% to Rs 746 and Bajaj Auto falling 1.21% to Rs 2582. Index large-cap Reliance Industries slipped 1.40% to Rs 954 on 12.98 lakh shares. ONGC declined 1.69% too. Reliance was the most active stock on BSE with a total turnover of Rs 124.25 crore followed by SBI with Rs 73.01 crore and HDFC bank with Rs 64.69 crore.

IT shares lost ground too. Satyam Computers was down 2.71% to Rs 734, Wipro lost 2.63% to Rs 494 and TCS shed 1.26% to Rs 938.

Among other stocks, Unity Infraprojects soared 19.30% to Rs 415.65 on 4.74 lakh shares and Godawari Power jumped 7% to Rs 73.40. Aban Loyd Chiles Offshore gained 2.64% to Rs 1,026 after its off-shore oil rig Aban VII was hired by ONGC Videsh for development at Offshore Qatar for approximately four months.

Jet Airways edged up 0.43% to Rs 517 following reports that it has hiked fuel surcharge by Rs 150 for domestic travel, in business as well as economy class. Era Construction India added up 3.50%, to Rs 230 on being awarded a construction deal worth Rs 55 crore by Pratappur Sugar & Industries.

Panacea Biotec sank 4% to Rs 300 despite being granted a patent by the Indian Government. The stock witnessed a block deal of 1.68 lakh shares at Rs 309.50 per share by 11:11 IST.


[R]9:45AM Stocks opened in the negative.[/R]
Stock markets opened in the negative Monday as a sharp increase by the price of oil generated negative sentiment, adding to investors’ concerns about another rate hike from the Fed as rising energy prices could lead to broader inflation or a halt to economic growth.

The oil prices jump contributed to a significant weakness in the oil-sensitive airline sector, with the Amex Airline Index currently down 2.5%. At the same time, oil service stocks benefited from the price increase, sending the Philadelphia Oil Service Index up 1%. The biotechnology sector posted some weakness, dragged by Vertex (VRTX: chart), Celgene (CELG: chart), and Myogen (MYOG: chart).

AES Corp. (AES: chart), power company, jumped 9.4% after reporting Q2 net income almost doubled to 25 cents a share from 13 cents a share a year ago on 15% revenue growth, beating estimates. El Paso Corp. (EP: chart) fell 5%, despite posting a profit after a year-ago loss. Shares of BP (BP: chart) dropped 2% on the Prudhoe Bay shutdown. In midmorning trading, the Dow Jones industrial average fell 21.37, or, 0.19%. The Standard & Poor''s 500 index lost 2.38, or 0.19%, and the Nasdaq composite index dropped 7.80, or 0.37%. Bonds lost ground as well in advance of the Fed meeting, with the yield on the benchmark 10-year Treasury note rising to 4.92% from 4.9% late Friday.


[R]9:00AM Stock futures dropped on surging oil.[/R]
U.S. equity futures moved lower on fears consumer spending could be hurt by a spike in energy prices following a shutdown of a major oil field in Alaska. Crude oil September delivery jumped 2% to $76.25 a barrel after British oil company BP PLC discovered a damaged pipeline at Alaska''s Prudhoe Bay and began shutting down the biggest oil field in the US. As well as on the impact of surging oil prices, investors will also focus on the economy, awaiting Tuesday''s Federal Reserve meeting. The Fed is widely expected to pause its two-year monetary tightening campaign.

Shares of energy drink maker Hansen Natural Corp. (HANS: chart) tumbled 16% on the Inet as the company''s earnings missed analysts'' average estimate. Energy company El Paso Corp. (EP: chart) may draw attention after it posted a quarterly profit versus a year-earlier loss, supported by gains from a hedging program. Apple Computer Inc. (AAPL: chart) shares are seen in focus again on news that several options grants to top executives at Apple were dated just before sharp increases in its stock between 1997 and 2001. In news of deals, AmerisourceBergen Corp (ABC: chart) and Kindred Healthcare Inc. (KND)) agreed to form a new public company by combining their institutional pharmacy businesses. Standard & Poor''s 500 futures were down 5.8 points, below fair value. Dow Jones industrial average futures were down 46 points, and Nasdaq 100 futures were down 7.75 points.