U.S. MARKET AVERAGES

U.S. averages rebounded from early declines, supported by a fall in oil prices and a sharper-than-expected rise in US factory orders in August. Oil prices have slipped by $2 falling below $64 a barrel. Heating oil, gasoline and natural gas followed the suit. Consequently, the energy sector posted a notable loss of 2.1%.

The computer hardware sector is another conspicuous loser, down 1.5% after Lexmark' posted lower Q3 earnings forecast. The early decline has reversed gains posted over the previous 2 sessions.

Healthcare sector posts considerable rise of 1.3% on the back of HMO, biotech and pharmaceutical stocks.

In the only piece of economic news, the U.S. Census Bureau released better-than-anticipated data, saying that new orders for manufactured goods in August increased $9.7 billion or 2.5%to $395.2 billion, following a 2.5% decrease in July. Economists had expected increase of 1.2%.

MOVERS AND SHAKERS

Printer maker Lexmark International Group Inc. (LXK: chart) lost 22.4%, which is nearly a quarter of their value, after the company predicted third-quarter earnings and revenue would come in well below its forecasts. The company pointed decreasing laserjet and inkjet supplies revenue as a result of a reduction in channel inventories as well as lower end user demand. The prediction is likely to stimulate investors to take a look at rival Hewlett-Packard's (HPQ: chart) outlooks for the rest of 2005. Hewlett-Packard dropped 1% yesterday.

Clorox Co. (CLX: chart) also narrowed its earnings targets for the second quarter and fiscal year due to boosting energy-costs. The Oakland-based company announced it will raise prices on about 40% in order to partly compensate those higher costs. The company fell 1.7% yesterday.

General Motors Corp. (GM: chart) and Ford Motor Co. (F: chart) may attract attention after both were put on CreditWatch by Standard & Poor's after yesterday's close. Both companies are dependant on sport utility vehicles and trucks amid rising energy prices. The ratings agency's move follows the reports by the both automakers about a sudden drop in U.S. vehicles sales for the next month. General Motors added 1.4% while Ford gained 0.3% yesterday.

Procter & Gamble (PG: chart) dropped 1.7% after Citigroup downgraded the company to hold from buy, worried over raw material pricing. The broker said it will limit upside to earnings-per-share estimates. The broker also cut its price target to $59 from $61.

J.P. Morgan downgraded Eastman Kodak (EK: chart) to underweight from neutral, citing its concerns that digital profitability remains weak and its traditional business is declining quickly. The company fell 0.9% yesterday.

Deutsche Bank cut Kimberly-Clark Corp. (KMB: chart) to hold from buy. The broker pointed as a reason that rearranging the health product company to drive asset rationalization and support higher R&D is the right way but the fast growing raw material costs, a still suffering business in Europe and the loss of synthetic fuel tax benefits are too exhausting to calm down until restructuring savings begin.

ECONOMIC NEWS

New orders for manufactured goods in August increased $9.7 billion or 2.5 percent to $395.2 billion, the U.S. Census Bureau reported today. This followed a 2.5 percent decrease in July. Shipments, up for the fourth consecutive month, increased $6.6 billion or 1.7 percent to $393.5 billion. This was at the highest level since the series was first stated on a NAICS basis in 1992 and followed a 0.1 percent increase in July. Unfilled orders, up for the fourth consecutive month, increased $9.2 billion or 1.6 percent to $590.0 billion. This was at the highest level since the series began and followed a 1.0 percent July increase. Inventories, down following two consecutive monthly increases, decreased $0.6 billion or 0.1 percent to $463.7 billion. This followed a 0.6 percent July increase.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks finished higher on a third consecutive rise of U.S. markets overnight and strong dollar against the yen, giving a boost to exporter-related issues. The Nikkei advanced on strong world semiconductor sales data and reached a new four-year high at 13738.84 points to close at 1.6%. Canon, Kyocera Corp., and Honda Motor were among the leading gainers. In South Korea markets gained 1.8%, while in Hong Kong lost 0.1%. The dollar traded at 114.12 yen.

European markets closed Tuesday session mostly higher on strong auto sector with the German DAX 30 rising 1.1% and the French CAC 40, up 0.6%. Oil-heavy London’s FTSE 100 fell 0.1% after crude-oil prices dropped and BP warned that it wouldn’t be able to meet its output targets.

ENERGY, METALS, CURRENCIES

Oil prices declined below $64 a barrel. Light sweet crude for November delivery dropped $1.87 to $63.60 a barrel on the Nymex. Heating oil fell over 7 cents to $2.005 a gallon, gasoline fell 7 cents to $1.99 a gallon. Natural gas declined by 10 cents to $13.20 per 1,000 cubic feet. London Brent lost 82 cents to $61.98.

Gold prices climbed in European trading. In London the precious metal closed unchanged at $465.50 per troy ounce. In Hong Kong gold gained $3.20 to close at $467.45. Silver finished at $7.43, up from $7.36.