U.S. MARKET AVERAGES

The early afternoon session is one of low volume trading as the main averages are consolidating early gains. The stock markets welcomed upbeat news from chipmaker Intel which tightened 3Q guidance range and the semiconductor giant Texas Instruments which provided a boost to the market sentiment by releasing a 3Q lifted earnings and sales guidance. In these reports investors found hopes for an upswing in electronics demand.

In the meantime oil prices climbed over $65 a barrel on continued refinery shutdowns and U.S. Energy Dept forecast that winter energy costs would reach a 10-year high. Investors were cautious, awaiting more information about Katrina’s impact and sought for indicators of less-than-expected economic slowdown.

The energy sector was up 1.8%, standing out as one of the notable gainers in the trading session. The gold sector also joined the group of the big gainers, rising 2.1%. The tech sector is another gainer of the day, climbing 1.1%. Financial sector advanced 0.6%. The Housing sector moved higher to 1.7%.

Several healthcare stocks also posted strong gains sending the index up 5.9%

Transportation sector has notably declined by 1.4%. Airline sector was down 1.1% on lowered guidance by Continental. Trucking stocks weakened on lowered guidance from Yellow Roadway.

Investors also eyed a report, showing overall import prices for August rose 1.3% from 0.8% In July. Economists had expected an increase of 1.2%.

In midday trading, the Dow Jones industrial average climbed 77.62, or 0.73 percent, to 10,673.55. The Standard & Poor's 500 index rose 9.18, or 0.75 percent, to 1,240.85, and the Nasdaq composite index advanced 9.29, or 0.43 percent, to 2,175.32.

Bonds moved higher, with the yield on the 10-year Treasury note sliding to 4.11 percent from 4.14 percent on Thursday. The dollar was mixed against most major currencies, while gold prices climbed.

MOVERS AND SHAKERS

Intel Corp (INTC: chart) fell 0.9% in the early trading after the company cut its previous plans for third-quarter sales, but it expected sales to grow by 10% this year in comparison with 2004.

Texas Instruments Inc (TXN: chart) added 1% in pre-market trading because it lifted its third-quarter financial expectations due to a greater demand for its chips.

Yellow Roadway (YELL: chart) dropped 4.4% in pre-market dealings after the company narrowed its third-quarter earnings predictions and cited the hurricane as one of the reasons.

Northrop Grumman Corp. (NOC: chart) also expected to cut its earnings and revenue as a result of Katrina's damage to its Gulf Coast shipbuilding operations. The company advanced 0.6% on Thursday.

The airline industry continues to suffer by high fuel prices. Continental Airlines (CAL: chart) fell 0.7% because of its forecasts for a significant loss in 2005 due to higher fuel prices.

Biogen Idec (BIIB: chart) lost 1.3% as Citigroup downgraded the company after it cut 17% of its workforce in a try to free up cash for new drugs.

ECONOMIC NEWS

Friday morning, the Department of Labor released its report on import and export prices in the month of August. The report showed that import prices showed a notable increase while export prices fell modestly.

The Labor Dept. said that import prices rose 1.3 percent in August, extending a recent upward move after rising 0.8 percent in July and 1.2 percent in June. The continued increase in prices was largely due to higher prices for petroleum imports.

Prices for petroleum imports rose 7.1 percent in August after rising 6.1 percent in July and 8.6 percent in June. Excluding petroleum imports, prices were unchanged in August after falling 0.2 percent in the two previous months.

As mentioned above, the report also showed that export prices fell 0.1 percent in August after rising 0.1 percent in July. The decrease reflected a 0.6 percent drop in prices for agricultural exports, although prices still fell 0.1 percent excluding agricultural exports.

INTERNATIONAL MARKET NEWS