U.S. MARKET AVERAGES

The falling oil price and less than expected damage to the oil refineries in Texas led bulls in charge. The opening rally of more than seventy points in Dow and fifteen points in Nasdaq met resistance in the afternoon. The yields on ten-year note rose from 4.25% to 4.29% and oil kept the advancing pace. At close oil managed 4% come back from the day’s low, gold declined from seventeen year high and dollar rose against Euro. Gasoline and heating oil also 4% and 5% respectively.

Early losses in energy and refining stocks were reversed at the close of the day as oil rebounded. The shares of Valero, Tessoro, Nabor Industries, and National Oilwell rose better than 2%.

Retailers of all kinds, department stores, specialty retailers, luxury retailers and other bounced as traders believed that oil prices will decline in the coming days giving consumers more cash to spend.


MOVERS AND SHAKERS

Boeing (BA: chart) rose 3.7% after the company agreed on a contract with striking mechanists.

Wal-Mart (WMT: chart) jumped 0.7%% after a report said that the company is going to acquire Tommy Hilfiger Corp. (TOM: chart). Wal-Mart also expects same-store sales to grow to 2%- 4% on September. Tommy Hilfiger closed six cents lower at $16.65.

Palm Inc. (PALM: chart) added 2.6% ahead of an expected new version of its Treo product to be announced.

Advanced Micro Devices (AMD: chart) was up 3.2% due to a report about the chipmaker in the latest edition of the financial weekly Barron's, saying that the company's stock could reach $50 in two years.

Walgreen (WAG: chart) lost 2.5% due to the retailer's flat quarterly results, totaling $324.4 million, or 32 cents a share, well below analysts’ forecasts of 37 cents a share.

ECONOMIC NEWS

Existing home sales unexpectedly rose in the month of August, according to a report from the National Association of Realtors (NAR). The increase in sales came in spite of some disruption from Hurricane Katrina at the end of the month.

The report showed that existing home sales rose 2 percent to a seasonally adjusted annual rate of 7.29 million units in August from a revised 7.15 million unit rate in July. The increase surprised economists, who had expected sales to fall to a 7.11 million unit rate from the 7.16 million unit rate originally reported for July.

David Lereah, NAR's chief economist said, “With a general background of growing population and favorable affordability conditions, home sales are staying at very healthy levels.”

The increase in existing home sales was partly due to notable growth in the West, where sales rose 5.6 percent. Sales in the Midwest and Northeast rose 1.9 percent and 1.7 percent respectively, while sales in the South slipped 0.4 percent.

The report also showed that total housing inventory levels rose 3.5 percent to 2.86 million existing homes available for sale at the end of August. NAR said that this represents a 4.7-month supply at the current sales pace Lereah said, “Housing inventory improved in August but remains tight, and we have some way to go before we get into a range of balance between home buyers and sellers. As a result, we'll continue to see above-normal home price appreciation for the foreseeable future.”
In August, the national median existing-home price was up 15.8 percent year-over-year at $220,000. The represents the strongest rate of appreciation since July 1979, when annual price growth was 17.2 percent.

Commenting on the impact of Hurricane Katrina, NAR President Al Mansell said, “There will be a mixed impact in figures over the next couple months with total disruption in the hurricane disaster zone, offset by spiking sales from displaced residents in nearby regions which escaped heavy damage.”


INTERNATIONAL MARKET NEWS