U.S. MARKET AVERAGES

The economic growth in the second quarter declined in the second quarter as businesses liquidated inventories. However, large part of the economic growth has to do with the residential construction and government spending.

In the early market averages are flat as flood of earnings continue. Archer Daniel Midlands, Anadarko, American Electric Power reported better-than-anticipated earnings. Chevron reported decline in earnings.

Oil in New York is trading above $60 per barrel.

ECONOMIC NEWS

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 3.4 percent in the second quarter of 2005, according to advance estimates released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 3.8 percent.

The major contributors to the increase in real GDP in the second quarter were personal consumption expenditures, exports, equipment and software, residential fixed investment, and

government spending. The contribution of these components were partly offset by a negative

contribution from private inventory investment. Imports, which are a subtraction in the calculation of GDP, decreased.

The deceleration in real GDP growth in the second quarter primarily reflected a downturn in

private inventory investment that was partly offset by a downturn in imports and accelerations in exports and in equipment and software.

Final sales of computers contributed 0.43 percentage point to the second-quarter change in real GDP after contributing 0.37 percentage point to the first-quarter change. Motor vehicle output subtracted 0.08 percentage point from the second-quarter change in real GDP after contributing 0.15 percentage point to the first-quarter change.

The price index for gross domestic purchases, which measures prices paid by U.S. residents,

increased 3.2 percent in the second quarter, compared with an increase of 2.9 percent in the first. Excluding food and energy prices, the price index for gross domestic purchases increased 2.0 percent in the second quarter, compared with an increase of 3.0 percent in the first.

Real personal consumption expenditures increased 3.3 percent in the second quarter, compared with an increase of 3.5 percent in the first. Durable goods purchases increased 8.3 percent, compared with an increase of 2.6 percent. Nondurable goods purchases increased 3.3 percent, compared with an increase of 5.3 percent. Services expenditures increased 2.3 percent, compared with an increase of 2.8 percent.

Real nonresidential fixed investment increased 9.0 percent in the second quarter, compared with an increase of 5.7 percent in the first. Nonresidential structures increased 3.1 percent, in contrast to a decrease of 2.0 percent. Equipment and software increased 11.0 percent, compared with an increase of 8.3 percent. Real residential fixed investment increased 9.8 percent, compared with an increase of 9.5 percent.

Real exports of goods and services increased 12.6 percent in the second quarter, compared with an increase of 7.5 percent in the first. Real imports of goods and services decreased 2.0 percent, in contrast to an increase of 7.4 percent.

Real federal government consumption expenditures and gross investment increased 1.3 percent in the second quarter, compared with an increase of 2.4 percent in the first. National defense increased 2.0 percent, compared with an increase of 3.0 percent. Nondefense decreased 0.1 percent, in contrast to an increase of 1.1 percent. Real state and local government consumption expenditures and gross investment increased 2.4 percent, compared with an increase of 1.6 percent.

The real change in private inventories subtracted 2.32 percentage points from the second-quarter change in real GDP after adding 0.29 percentage point to the first-quarter change. Private businesses reduced inventories $6.4 billion in the second quarter, following increases of $58.2 billion in the first quarter and $50.1 billion in the fourth.

Real final sales of domestic product -- GDP less change in private inventories -- increased 5.8percent in the second quarter, compared with an increase of 3.5 percent in the first.