11:30AM U.S. market averages erased some of the earlier gains amid cautiousness.
U.S. market averages traded off earlier highs as investor cautiousness led to choppy trading. Better-than-forecast earnings from Dow component General Motors, Sun Micro and positive inflation data have been helping market to continue recovery.
Auto maker General Motors (
GM: chart) rise 3% to give blue-chip stocks a boost. Other gainers on the Dow included, Altria Group (
MO: chart), up 3.6%, Verizon (
VZ: chart), up 3%, Caterpillar (
CAT: chart) and Alcoa (
AA: chart), each rising more than 1.3%. Tobacco, utilities and real estate stocks posted strength.
Nasdaq traded in a choppy fashion, pressured by networking and disk drive stocks. Apple (
AAPL: chart) weighed on the tech-heavy average with a decline of 2.5%. However, computer server and software developer Sun Microsystems (
SUN: chart) climbed 7% as it swung to profit from year-ago losses.
On the deal news front, Marathon Oil (
MRO: chart) fell 2.8%, as it announced a deal to acquire Canada's Western Oil Sands in a deal worth $6.2 billion. Shareholders of Western Oil Sands will receive $3.6 billion in cash and 34.3 million Marathon shares and securities exchangeable for Marathon stock. Separately, Marathon posted Q2 earnings drop.
In late morning trading, the Dow Jones industrial average rose 44.95, or 0.34%, to 13,403.26, after rising more than 120 points earlier. The Standard & Poor's 500 index gained 2.63, or 0.18%, at 1,476.54, and the Nasdaq composite index added 0.36, or 0.01^, at 2,583.64. The 10-year Treasury note's yield dipped to 4.80% from 4.81% late Monday.
Construction spending dropped 0.3% in June.
Tuesday morning, the Department of Commerce released its report on construction spending in the month of June, showing that spending on construction unexpectedly fell compared to the previous month. The report showed that
construction spending fell 0.3 percent in June following an upwardly revised 1.1 percent increase in May. With the decrease, June spending is down 2.4 percent compared to the same month last year. Economists had expected spending to rise 0.2 percent compared to the 0.9 percent increase originally reported for the previous month. The unexpected decrease in construction spending came as spending on private construction fell 0.3 percent, while spending on public construction was nearly unchanged.
10:00AM New York, 7:30 PM Mumbai – Regional rebound, earnings from Reliance Communication, Bhel, and Aditya Birla Nuvo propel the index near record level.
Sensex in Mumbai trading soared 290.08 to 15,550.99 or 1.9%. For the month of July Sensex jumped 12%. Of the thirty stocks in the index 17 advanced and the rest declined. In the broader market 1,695 stocks gained, 973 declined, and 79 were unchanged but on a lower trading volume. The daily turnover in the market declined to 5,272 crore rupees from 5,057 crore rupees.
The Reserve Bank of India increased the capital requirement ratio for banks to stem the rising liquidity and expanding loan portfolios. The bank raised the ratio to 7% from 6.5% to stem the inflation forces. After the credit committee meeting the bank left the reverse repo and bank rates at 6% and left its current fiscal forecast unchanged to 8.5%.
Gainers
Reliance Communications reported 77% increase in earnings to 837 crore rupees on 18% increase in revenue to 3,229 crore rupees.
Capital goods maker Bhel jumped 4.9% to 1,734 rupees and Larsen & Toubro gained 7.2% in the session. ABB India and Crompton Greaves surged in the rally by 7% as well. Bhel reported first quarter earnings of 289 crore rupees an increase of 22% from a year ago.
Reliance Industries jumped 2.4% to 1,893 on the news that the company is in the process to acquire regional natural gas distribution network of Adani Group in Gujarat.
Cement stocks gained in the rally led by India Cements surge of 8% followed by Ultra Tech Cement advance of 4.4%, and ACC increase of 3.3%. In the housing sector HDFC jumped 5.6%.
Metal stocks jumped in the rally on higher copper prices in international trading. Sterlite Industries and Hindustan Zinc jumped 6% followed by 4.4% gain in Jindal Steel & Power.
Stock split news left several stocks volatile in the day. Unitech jumped 4.7% on bonus issue of one share per share but Valecha Engineering fell 6% after the company issued one bonus share of every 2 shares held.
Decliners 
