Wall Street lacked direction at opening hours, reflecting further credit problems and uncertainty about what the Fed Reserve's next move might be to steady the markets and the economy.

Countrywide Financial (CFC: chart) rose 2.9% on speculations it might be a takeover target due to losses related to subprime mortgages. Capital One Financial (COF: chart) added 1.9% announced a decision to close its wholesale mortgage business and reduce 1,900 jobs.

Better-than-expected earnings reports from several retailers provided some boost to the market sentiment. Target Corp. (TGT: chart) added 0.6% after the discount giant reported 13% earnings increase and improved gross margins. BJ's Wholesale Club (BJ: chart) said Q2 profit jumped 37% on 8% sales growth, beating expectations. The stock rose 5%.

However, shares of Staples (SPLS: chart) fell 1.8% after posting a lower-than-expected 11% profit rise. Shares of Saks (SKS: chart) dropped 2.5% after the retailer said it narrowed Q2 losses to 17 cents a share, from 15 cents a share a year ago.

In the first hour of trading, the Dow Jones industrial average fell 14.80, or 0.11%, to 13,106.55, having moved in and out of positive territory. The Standard & Poor's 500 index was down 0.87, or 0.06%, at 1,444.68, and the Nasdaq composite index edge up 2.02, or 0.08%, to 2,510.61. Bonds were flat, with the yield on the benchmark 10-year Treasury note at 4.60%.


09:00AM U.S. stock futures advanced, lifted by hopes the Fed Reserve will cut interest rates.

U.S. stock futures advanced on Tuesday, boosted by optimism that the Federal Reserve will make further steps by cutting its main base rate in order to relieve continuous global credit worries.

Banc of America Securities (BAC: chart) downgraded a number of home builders, including Toll Brothers (TOL: chart), Hovnanian Enterprises (HOV: chart) and Standard Pacific (SPF: chart), saying cancellations jumped as lenders pulled commitments from buyers already in the backlog and new buyers failed to qualify.

At the same time, Capital One Financial (COF: chart) announced a decision to close its wholesale mortgage business and reduce 1,900 jobs as the credit card giant loses confidence in the profitability of originating home loans. The stock gained 1.2% in pre-market trading.

On the earnings news front, Target Corp. (TGT: chart) said its Q2 net income rose 13% to $686 million, or 80 cents a share, up from $609 million, or 70 cents a share a year ago, meeting estimates. Company’s revenue increased 9.5% to $14.62 billion, slightly below expectations of revenue of $14.67 billion. The company's same-store sales rose 4.9%.

Among other retailers posting financial results, American Eagle Outfitters (AEO: chart) reported a 13% profit rise and Staples (SPLS: chart) posted 11% earnings rise.

After early losses, S&P 500 futures rose 3.8 points at 1,452.90 and Nasdaq 100 futures climbed 2.5 points at 1,900.25. Dow industrial futures rose 26 points.


7:00PM Mumbai, 9:30AM New York – A lack of transparency in nuclear pact with the U.S. left the ruling Congress party coalition in chaos. Sensex fell 3% on the worries that general election may be called ahead of schedule.

Sensex in Mumbai trading dropped 438.44 points or 3.04% to close at 13,989.11 after rebounding from the low of the day with a loss of 485 points. CNX Nifty lost 134 points or 3.2% to close at 4,074.90. The fragile coalition between Congress party and Communists parties appear to be divided on nuclear pact with the U.S. Rupee in international trading recovered against the U.S. dollar to 41.10 from 41.33.

Communists controlled parties provide a support with 60 members in the parliament to Congress party with only 226 seats, 47 seats short of majority in 545 -member Lok Sabha.

The daily turnover on BSE increased to 4,201 crore rupees from 3,877.61 crore rupees and on NSE turnover gained to 10,779 crore rupees from 8,959 crore rupees. All 30 stocks in the Sensex fell.

Gokaldas Exports soared 10.2% to 252 rupees after the U.S. private equity firm Blackstone agreed to acquire 50% from the controlling Hinduja family and 20% from the public investors. After the deal Blackstone will control 70% in the company and Hinduja family will lower its stake from 69% to 19%.

Banks declined for the second day in a row led by 5.5% fall to 1,465.30 rupees in State Bank of India followed by 4.2% decline to 835.45 rupees in ICICI Bank, and 2% decrease to 1,105 rupees in HDFC Bank.

Reliance Industries is reported to have discovered oil reserve, one of the largest discoveries on the east coast so far, in the drilling of third well in Krishna Godavari basin. The stock in the general market decline fell 2.8% to 1,742 rupees.

Reliance Communications fell 4.2% to 486 rupees after jumping a day ago on market speculation that it is negotiating with Aircel. Reliance denied the rumors today. Reliance has a total of 37 million or 3.7 crore subscribers. Bharti Airtel plans to double its network towers to 80,000 in the next the six months. The stock dropped 0.7% to 821 rupees.

Software exporters fell as market worried that the current credit market volatility in the U.S. may affect earnings in the sector. Tata Consultancy Service fell 4% to 1,012 rupees, Satyam Computer declined 4.1% to 415 rupees, and Wipro lost 5% to 446.30 rupees.

Central Bank of India priced its IPO at 102 rupees and raised 820 crore rupees. The stock closed up 13% to close at 115.40 rupees on heavy volume of 2.4 crore shares. The issue was oversubscribed 62 times at the close on July 27th.

Real estate developers suffered in the market decline. Sobha Developers fell 4.7% to 750 rupees, Unitech declined 3.3% to 477 rupees, DLF lost 3.6% to 558 rupees, and Ansal API decreased 3% to 257 rupees. TCI Industries, the owner of Mukesh Mill properties in Colaba area of Mumbai jumped upper end of the daily limit 5% to 4,318 crore rupees. The stock has surged 5% every day for the last 28 trading sessions on the expectations that the mill will be acquired at a premium price by one of realtor companies. DLF recently agreed to pay 1,600 crore rupees for 38 acre land complex of DCM Shriram in New Delhi. Gayatri Projects fell 7.7% to 255 rupees after the company plans to raise foreign investor limit to 49%.

6:00AM New York, 6:00PM Tokyo - Asian shares continue rally second day running amid fading investor concerns over US credit market worries. Japan deputy finance minister opposes interest rate hike. Nissan Diesel shareholders give thumbs up for Volvo take-over. Australia has A$3.7 billion budget surplus. Evans and Tate Ltd placed under receivership.]/R]

Asian shares finished higher second day running spurred by withering investor concerns over spreading losses arising from US mortgage market problems. Japan rose 1.1% while Australia added 0.96%. Hang Seng rose 0.62%, Seoul up 0.28% and Taiwan up 0.07%. Of the 225 Nikkei stocks, 171 shares rose, 47 fell and 7 were unchanged. Of the index stocks, top 10 gained in excess of 5%. In Sydney, of the stocks in ASX 200, 117 stocks gained, 73 dropped and 11 traded unchanged out of the 201 shares.

In Tokyo trading Nikkei 225 inched higher 1.1% to 15 901.34 pushed by gains in industrial shares. Exporters, banks, metal stocks traded firmer as well. The Bank of Japan pumped in a further 800 billion yen into the financial system Tuesday to ease rates growth, the sixth such intervention in a week. The yen firmed marginally to 14.69 against the dollar from 114.88 yesterday. Late last week, the yen had risen to record highs at 112 per dollar.

Japan deputy finance minister, Hiroki Tsuda told a news conference Tuesday government would not relish a rate hike. He is quoted by local media as saying: “Since stock markets and currency markets remain uncertain, we expect the BOJ to closely monitor market movements and continue to make appropriate decisions depending on market conditions.” Speculation is abuzz in the market that BOJ intends to lift the key accommodation rate from the current 0.5%.