4:00PM Surging market averages on the hopes rate hike deferral.

-Nasdaq gained 37.49 points, Dow advanced 212.19 and S&P 500 surged 22.95 points.
-Yield on 10-year closed at 5.06% and on 30-year closed at 5.107%.
-Crude oil lost 80 cents to close at $72.66 per barrel.
-Gold surged $13.30 per ounce to close at $642.80 per ounce.

-Asian Markets closed mixed. Japan closed 0.4% higher and India led 2.2% lower. Australia lost 0.4% but Hong Kong, Malaysia and Singapore advanced 0.3%.

-European Markets surged with over 2% gain in France, Germany and Spain. U.K. and Switzerland gained 1.7% and 1.9% respectively. Russia advanced 0.2% but South Africa gained near 3%.

-Latin American Markets surged on the back of rise in New York. Mexico led the surge with 5% rise and followed by 4.25% gain in Brazil and 3.2% advance in Argentina.

It was a day of catch up, and market did just that. Fed Chairman comments kick started the rally and tech stocks, banks, housing and mortgage lenders led the race to the top. Three popular averages, Dow Jones, S&P 500 and Nasdaq gained close to 2% on the Chairman’s comments soothed market fears of rising inflation and rates. Fed’s Chairman is still learning to communicate with the market and in the recent past market has not been clear with the direction from the Chairman. Since May 10th of this year, market has displayed extreme volatility and until yesterday had lost all the gains of the year. Banking stocks staged a solid rally as Bank of America and J P Morgan reported better than expected earnings. Yahoo (YHOO: chart) lost 22% after reporting disappointing earnings on 28% rise in revenue.

European markets generally closed higher at least near 2% on the U.S. Fed Chairman comments. Tech stocks also rose on the back of rising stocks of Nokia, Ericsson and ASM Lithography. The earnings at ASM Litho rose 49% and revenue gained 23%. The stock gained 6%. Other semiconductor technology related stocks advanced including near 5% rise in ST Microelectronics.

Asian markets generally closed mixed led by a steep decline in India. With the earnings season in full swing market has been preoccupied with earnings from large companies. Two leading outsourcing companies Wipro (WIT: chart) and Tata Consultancy Software reported strong rise in revenue. Wipro, software and business process outsourcing company, reported earning rise of 44% on revenue growth of 42%. The company also indicated that a similar rise in earnings is likely in the current quarter. Tata reported revenue rise of 35% and earnings rise of 46% on the addition of 62 new clients. The company also reported two large contracts of $50 million or more from a U.S. based retailer and Middle-East based telecom company. TCS stock fell 5% and Wipro fell 4% on the earnings news.
Sensex index, Mumbai stock exchange bench-mark, sold-off 2.2% as domestic and foreign investors sold stocks. Foreign investors have shown little loyalty to the emerging markets in the last three years of trading. They have generally chased rising markets and have sold stocks with the slightest hint of a local economic slowdown.

2:45PM Banking and housing companies rallied on the hope that future rate hikes may be postponed.
Fed Chairman’s testimony to the Senate Banking Committee and strong earnings from J P Morgan and Bank of America supported a solid advance in the banking stocks. Bank of America (BAC: chart) stock advanced 3% on the second quarter earnings of $1.22 per share compared to $1.14 per share a year ago. Excluding merger charges related to MBNA, earnings per share would have been $1.22 per share. In the prior merger chares related to Fleet Boston reduced earnings by 2 cents. Revenue grew 25% from a year ago. For the first six month the bank earned $10.46 billion or $2.25 per share compared to $9.05 billion or $2.21 per share on a split adjusted basis.

J.P. Morgan (JPM: chart) reported second quarter earnings of 99 cents compared to 28 cents a year ago on revenue rise of 52% and 11% lower than in the first quarter of this year. In the second quarter 2005 the company had a legal reserve charge of 33 cents per share. The strong revenue gains were supported by a 42% increase in investment banking fees and 30% rise in bonds and debt underwriting fees. The company allocated $21 billion and generated 16% return on equity. The bank’s stock gained 5.5% at late afternoon trading.


11:30AM Stock markets rallied on Federal Reserve Chairman Testimony.
Stocks moved sharply higher on well received comments from Federal Reserve Chairman Ben Bernanke, interpreted as an indication that the Fed will leave interest rates unchanged at its next meeting in August. Bernanke also predicted that a projected slow down in economic growth should help limit inflation pressures over time.

The broad based strength in the market included strength in the airline sector as airline stocks benefited from declining oil. The decrease by the price of oil is partly due to the release of a report from the Energy Department that showed that U.S. crude oil and gasoline inventories unexpectedly increased. Gold stocks also posted significant gains, as the price of the precious metal moved back to the upside after sharp declines in the previous two sessions. Housing and financial stocks moved sharply higher, as Bernanke''s comments offset recent concerns about interest rates. The health insurance sector also moved notably higher, with the Morgan Stanley Healthcare Payor Index rising 3%.In morning trading, the Dow rose 160.16, or 1.48%. The Standard & Poor''s 500 index rose 18.44, up 1.49%, and the Nasdaq composite index rose 26.01, or 1.27%.

Crude oil and gasoline stockpiles rose
Crude oil inventories ticked slightly higher during the most recent week, according to government statistics released Wednesday. This broke a recent string of declines. Stockpiles of gasoline and distillates also ticked up during the week. The Department of Energy''s Energy Information Administration said that crude oil inventories edged higher by 200,000 barrels for the week ended July 14. Specifically, the measure ticked up to 335.5 million barrels from the previous week''s level of 335.3 million barrels. This broke a recent string of declines, with inventories dropping by 6 million barrels in the previous week. Oil inventories for the July 14 week were 3.2% higher than last year. Meanwhile, gasoline inventories showed a week-over-week advance of 1.5 million barrels. This followed a decline of 400,000 barrels in the previous week. The level of gasoline inventories was 0.8% above last year. Distillate fuel oil had an inventory advance of 1.2 million barrels during the week. This built on a recent streak of gains, including an advance of 2.6 million barrels in the previous week.


10:30AM Stock markets rallied on Bernanke’s comments.
Stock markets rallied in morning trading, following comments from Federal Reserve Chairman Ben Bernanke of moderating pace of economic growth and contained inflation. The Dow Jones industrial average shot up more than 100 points. In morning trading, the Dow rose 108.70, or 1.01%. The Standard & Poor''s 500 index rose 15.27, up 1.23%, and the Nasdaq composite index rose 24.29, or 1.19%. Bonds were down but recovering some lost ground on Bernanke''s comments. The yield on the 10-year Treasury note was 5.16%, up from 5.14% Tuesday.

The airline sector turned in one of the market''s best performances in early trading, with SouthWest Airlines (LUV: chart) climbing 7.6% after the airline reported strong Q2 earnings growth. The health insurance sector rebounded from yesterday’s sharp decline to show significant strength, as reflected by the 2.8% gain shown by the Morgan Stanley Healthcare Payor Index. Housing stocks also moved sharply higher in spite of the Commerce Department report that showed a bigger-than-expected decrease in housing starts in the month of June.


9:45AM Stocks opened higher on strong earnings.
U.S. stocks advanced at opening on signs of cooling economy and stronger-than-expected earnings from International Business Machines Corp. and JPMorgan & Chase. However, a disappointing revenue outlook by Yahoo Inc. limited gains on the Nasdaq.

The Labor Department said the CPI rose by just 0.2% in June, the smallest increase in four months, but core inflation, excluding energy and food, rose by 0.3%, higher than the 0.2% expected. Signs of slowing housing market were received from the Commerce Department report which said that construction of new homes fell by 5.3% in June.