4:00PM Alcoa meets earnings but revenue was shy by $50 million of estimates.

-S&P 500 closed up 1.86 points, Dow closed up 12.88 and Nasdaq closed down 13.14.
-Yield on 10-year bond closed at 5.13% and 30-year bond closed at 5.16%.
-Crude oil traded as low as $72.85 but recovered to a loss of 48 cents to close at $73.61.
-Gold closed $8.70 down to $626.10 per ounce. Copper closed at $3.5825.

-Asian Markets closed higher led by a near 2% rise in Korea, India and Japan.

-European Markets closed higher with Switzerland, France, Germany and Russia closed up near 0.5%.

-Latin American Markets closed lower led by a decline of 0.7% in Mexico.

Tech heavy Nasdaq closed lower but broader average S&P 500 and industrial stocks closed higher. Earnings related enthusiasm supported early gains in the market but in the afternoon market averages fell. Earnings are expected to rise at least 11% according most market watchers in the current earnings season. For the eleven consecutive quarters, five hundred largest companies have reported at least 11% earnings growth. Market watchers expect earnings to rise in double digit in the second quarter as well.

It has been lately a familiar pattern of merger news on Monday and today was not any different. Kimco Realty Corp (KIM: chart) agreed to acquire Pan Pacific Retail Properties (PNP: chart) for $2.9 billion. Kraft Foods agreed to buy Spanish and Portuguese units of United Biscuits for $1.07 billion. WPS Resources (WPS: chart) said that it will acquire Peoples Energy Corp (PGL: chart) for $1.52 billion in stock.

Earnings warnings from AMD, Kronos and EMC kept shares in check. AMD (AMD: chart) lost $1.05 to close at $22.51 and EMC (EMC: chart) lost 5% or 77 cents to close at $10.41 but Kronos (KRON: chart) lost 20% to close at $29.46.

After the close, the aluminum company, Alcoa (AA: chart) kicked-off the earnings season with earnings of 85 cents vs. 52 cents a year ago on revenue rise of 19%. The company met earnings expectations but missed the revenue guidance of $8.01 billion by $50 million.

European markets closed mostly higher, but by a fraction only. Falling oil and metals prices hurt the mining stocks in South Africa and in London. Earnings expectations drove stocks in Europe too. L’Oreal gained 1.6% and Novartis advanced 1.3% ahead of earnings. Broker upgrade and earnings expectations drove ASML Holding and ARM Holdings.

Markets in Mexico closed lower as investors awaited the next twist in the recently completed Presidential election. Mr. Lopez Obrador has requested a vote-by-vote recount. The local election authority has until the end of August to investigate and report the results by September 6th. IPC index closed at its worst level of the day. Wal-Mart de Mexico kicked-off earnings season and reported earnings rise of 33% beating the estimates of 25%. The stock closed higher 1.25%. Grupo Carso Telecom, Cemex (CX: chart), Banorte closed down near 3%. American Movil (AMX: chart) closed down 2.4%.

Bovespa index in Brazil closed near unchanged level. Telecom, electric utilities and banking sector stocks led the gainers. Electropaulo Metropolitana, Cemig and Cesp gained more than 1%.


12:30PM European markets closed higher.
European markets closed in the positive, reflecting robust opening on Wall Street ahead of the second-quarter earnings season and gains for L’Oreal and Novartis. Cosmetics giant L’Oreal climbed 2.6% ahead of Wednesday’s sales figures, while drug maker Novartis rose 1.3%. The German DAX 30 closed up 0.4%, the French CAC 490 rose 0,.6%, and London FTSE 100 edged up 0.1%.

Oil prices fell below $74 on gasoline futures sell-off. Light crude August delivery dropped 84 cents to $73.25 a barrel. Gasoline lost 6 cents to $2.176. London Brent slipped 87 cents to $72.64. The dollar traded higher versus major currencies. The euro traded at $1.2731, down from $1.2814. The dollar bought 114.14 yen, up from 113.91. The British pound stood at $1.8389, down from $1.8514. European gold prices declined. In London the precious metal traded at $627.20, down from $631.40 per ounce. In Zurich gold traded at $626.20, down from $631.75. Silver closed at $11.14, down from $11.36.


11:30AM Stock markets rallied on earnings optimism.
Stocks rallied Monday as after weeks of volatile trading on confusion about interest rates, investors gained optimism for a strong Q2 earnings session. A few multibillion-dollar acquisitions also helped to generate positive sentiment. Kraft Foods Inc. (KFT: chart) agreed to buy the Spanish and Portuguese units of United Biscuits for $1.07 billion and Kimco Realty Corp. agreed to acquire Pan Pacific Retail Properties Inc. for $2.9 billion. Lower oil prices supported the market''s advance, helping stocks steady themselves from steep losses in the prior session.

The airline sector continued its strong performance, sending the Amex Airline Index higher by 2.1%. Despite the decrease by the price of oil, some strength emerged in the oil service sector, lifted by strong gains by Cameron (CAM: chart) and Schlumberger (SLB: chart). The health insurance sector also showed continuous strength, with Morgan Stanley Healthcare Payor Index up 1.2%. Some retail stocks also posted significant gains, with Gap (GPS: chart) turning in one of the sector''s best performances, rising up 5.4%. Meanwhile, some technology stocks came under pressure, helping to limit the upside for the tech-heavy Nasdaq. Some computer hardware, networking, and semiconductor stocks also moved notably lower. In late morning trading, the Dow rose 72.12, or 0.65%.The Standard & Poor''s 500 index was up 6.16, or 0.49%, and the Nasdaq composite index gained 2.75, or 0.13%. Bonds pulled back from last week''s rally, with the yield on the 10-year Treasury note ending up to 5.15% from 5.13% late Friday.


10:30AM The Sensex end higher buoyed by rise in IT and cement shares.
The Sensex in India ended 174.77 points, or 1.6% higher, to close at 10,684.30. The turnover on BSE was $500 million or Rs 2,236 crore, a decline of 20% from Friday’s trading. The market-breadth was weak with 1,304 stocks advanced, 1,040 declined and 71 shares were unchanged.

IT shares soared on hopes that firms may lift their earnings and revenue guidance for the fiscal year 2007 on strong volume growth and weak rupee against dollar. I-flex solutions surged 6.5% to Rs 1,211, Wipro rose 5% to Rs 494, HCL Tech gained 5% to Rs 517, TCS rose 3% to Rs 1,804, Infosys advanced 2.7% to Rs 3,190 and Satyam Computer gained 2.6% to Rs 710.