4:00PM Market rally fizzled ahead of inflation data.

-Yield on 10-year bond closed at 5.003% and 30-year bond closed at 5.122%.
-Crude oil down 82 cents to close at $73.53 per barrel.
-Gold traded down $5 to close at $633.10 per ounce.

-Asian Markets closed mostly higher as led by 1.9% rise in Tokyo, 1.5% gain in Thailand and 1.1% advance in India.

-European Markets closed higher led by 1.23% rise in France and 1.13% advance in Germany and 1.0% rise in Belgium and Spain.

-Latin American Markets closed lower led by 1.2% fall in Argentina, 0.8% in Brazil and 0.3% in Canada.

Market rallied in the morning hours on the drop in oil price, rise in Asian and European stocks but rally lost its momentum in the afternoon as worries on inflation gripped investors. On Tuesday market is looking for a rise in core inflation between 0.2% and 0.3% in July compared to previous month. Several construction equipment related stocks traded near new lows for the year. Joy Global (JOYG: chart), Caterpillar (CAT: chart), Deere & Co. (DE: chart) and Terex Corporation (TEX: chart) traded near the low for the year. The expected slow down in the economy has driven down this stocks to a new low for the year.

Rise in gasoline and crude oil prices over the last three years have dampened several transportation stocks. Carnival Cruise (CCL: chart) traded near 30-month low and United Airlines (UAUA: chart), Continental Airlines (CAI: chart) and AMR Corp (AMR: chart), parent of American Airlines have also lost close to 50% of its value from the peak in this year.

PepsiCo Inc. (PEP: chart) named Indra K. Nooyi as its first female CEO as of October 1. The current President and CFO will assume the role of Chief Executive from Steve Reinemund, 58 years old. Ms. Nooyi joined PepsiCo in 1994 and was appointed as CFO of the company in 2001. She will be the fifth CEO in 41-year history of the company. Ms. Nooyi was involved in the acquisition of Tropicana in 1998, Quaker Oats in 2001 and Pepsi’s restaurant and bottling businesses. The company has now surpassed its arch rival Coca Cola in market value last year. PepsiCo market value exceeds that of Coca Cola by about one billion at today’s stock price.

Whole Foods Market (WFMI: chart) climbed near 7.5% on an analyst upgrade. The company stock gained more than $3.50 to close at $50.78 and has traded between $79.90 and $46.90. The analyst suggested that the company’s goal of achieving $12 billion by the year 2010 is aggressive but reachable, however it depends on the success in opening new stores and its success in penetrating in the UK market.

12:30PM European markets gained ground.
European markets finished steeply in the positive, reflecting a significant decline by the price of oil and reduced measures at U.K. airports. Oil dropped more than a dollar after a cease-fire between Israel and Hizbollah took effect, easing supply concerns. Another factor sending oil prices down was BP’s announcement that it will pump 200,000 barrels of oil a day from the Prudhoe Bay field in Alaska during repairs. Among leading gainers were airline stocks which recovered on the news of the day. British Airways advanced 1.9%, while Lufthansa rose 2%. Automakers like Renault and Volkswagen also posted gains. The French CAC 40 climbed 1.2%, the German DAX 30 rose 1.1%, supported by upbeat GDP figures for the second quarter, and London FTSE 100 gained 0.9%.

Oil price dropped over a dollar as a cease-fire in the Middle East took effect and BP said it will be able to pump 200,000 barrels a day at the oilfield in Alaska, despite the repairs. Light crude September delivery fell $1.27 to $73.08 a barrel. Gasoline lost 7 cents to $1.9925 a gallon, while heating oil fell 3 cents to $2.0090. Natural gas declined 40 cents to $6.870 per 1,000 cubic feet. London Brent dropped $1.26 to $74.37. The dollar traded mixed versus major currencies. The euro traded at $1.2743, up from $1.2729. The dollar bought 116.40 yen, up from 116.26. The British pound stood at $1.8908, up from $1.8901. European gold prices declined. In London the precious metal traded at $627.60, down from $637.60 per ounce. In Zurich gold traded at $628.38, down from $640.63. Silver closed at $11.97, down from $12.17.


11:30AM Market averages rallied.
Mideast cease-fire and lower oil prices boosted stocks and the three major averages rallied. The Dow and S&P 500 were supported by heavy equipment maker Caterpillar Inc. (CAT: chart) which rose 1.7%, jet maker Boeing Co. (BA: chart), up 1.3% and diversified manufacturer United Technologies Corp. (UTX: chart), up 1.5%. The Nasdaq was helped by Cisco Systems (CSCO: chart) which rose 2.4% on news the company is set to benefit from telecommunications companies upgrading their networks to handle next-generation services such as video.

Significant strength was posted by financial stocks. The shares of Charles Schwab Corp. (SCHW: chart) rose 1.7% after it said its July client daily average trades rose 15% from year ago levels, to 245,200, but they fell 5% from June 2006. Net new assets brought to the company by new and current clients in July 2006 totaled $6.8 billion. Total client assets were $1.284 trillion at the end of July, up 12% from July 2005 and up 1% from June 2006.

Knight Capital Group (NITE: chart) announced its average daily U.S. equity trade volume in July 2006 declined 1% to 775,000 from 768,000 in July 2005 and was off 6.4% from 828,000 in June 2006. Average daily dollar value traded in July was $7.03 billion, down 4% from $7.32 billion in July 2005 and off 11.2% from $7.91 billion in June 2006. Average daily U.S. equity share volume was 5.15 billion in July up 137.9% from 2.17 billion in July 2005 and up 27.6% from 4.04 billion in June 2006. Knight shares lost 0.8%. Shares of Ameritrade (AMTD: chart) rose 1.9%, following announcement last week that its average client trades during July averaged 210,000 per day. In late morning trading, the Dow Jones industrial average rose 77.40, or 0.7%. The Standard & Poor''''s 500 index added 6.69, or 0.53%, and the Nasdaq composite index gained 19.79, or 0.96%. Bonds moved lower, with the yield on the benchmark 10-year Treasury note rising to 4.99% from 4.97% late Friday.


10:30AM Sensex gained 1% due to decline in oil prices.
The Sensex in India ended 120.53 points, or 1.08% higher, to settle at 11,312.99. The turnover on BSE was Rs 2,821 crore, lower than Friday''s Rs 3,402.61 crore. The market-breadth was strong, as 1,837 shares rose on BSE, only 641 declined and 60 shares were unchanged. The index has soared since late July 2006 supported by sustained foreign funds inflow, strong quarterly results, normal rain in the month of July, and easing of worries of domestic rate hike.

Bajaj Auto led the gainers, surging 5% to Rs 2,788. Hero Honda led the decliners, falling nearly 2.2% to Rs 681.25. Refinery shares were in focus as the crude oil price declined. BPCL jumped 6% to Rs 325, Indian Oil Corporation rose nearly 6% to Rs 423 and HPCL surged 5.9% to Rs 235.95. ONGC rose 1.8% to Rs 1,216.50. The large-cap company is looking for stakes in many more overseas oil assets in collaboration with Chinese firms. IT large-cap Infosys rose 0.7%, to Rs 1,755.

Other auto stocks participated in the rally led by TVS Motor gaining 2.5% to Rs 95, Eicher Motor rising 2% to Rs 230.95, Mahindra & Mahindra advancing 1.3% to Rs 621. Tata Motors rose 1.1% to Rs 803 and small car maker Maruti Udyog gained 1% to Rs 802.45.

Reliance Industries rose 1.8% to Rs 1,030, extending Friday''s 3.1% gain. Housing finance large-cap HDFC advanced 3.6% to Rs 1,310 and shares of largest commercial bank State Bank of India gained 1.8% to Rs 874. Cipla surged 3.7% to Rs 250.45. Cellular service company, Bharti Airtel moved up 2.4% to Rs 414, as last week, the company posted strong subscription growth for July 2006.