4:15PM Lower than expected wholesale inflation data sparked a rally.

-Yield on 10-year bond closed at 4.933% and 30-year bond closed at 5.052%.
-Crude oil closed down 53 cents to $73 per barrel.
-Gold closed down $6.30 to $626.80 per ounce.

-Asian Markets closed mostly unchanged with Japan down 0.3%, Singapore down 0.4% and Australia down 0.7%. Markets in India and South Korea were closed.

-European Markets closed higher led by 1.6% rise in Switzerland, 1.5% gain in Germany and 1.4% jump in France. South Africa and Russia closed higher as well.

-Latin American Markets surged led by 2.0% rise in Brazil and 1.8% gain in Argentina. Mexico rose 0.98%.

Traders were primed for a rally with the release of July wholesale inflation report. The producer price index for the month rose 0.1% after gaining 0.5% in June and core rate of inflation after deducting energy and food prices fell 0.3%. This unexpected rise in core PPI rate kept buyers in charge and quickly large cap and tech stock rallied in the opening hours. When looked at the entire production chain a different picture emerges on the inflation rate. The prices of raw materials, also known as crude goods, in the month rose 3.1% and intermediate goods rose 0.5%. For the last twelve months prices of crude goods rose 34% and intermediate goods gained 7.9%. In the month gasoline price rose 0.7% after gaining 6.3% in June and 2.2% in May. With the soon to be released consumer price inflation in the CPI report market is now expecting the CPI in July to rise 0.4% and core CPI to gain 0.3%.

The rally was sustained for much of the day despite an earnings decline reported by Wal-Mart. Wal-Mart reported 26% decline in earnings on the account of sale of loss-making German operation. The company reported second quarter earnings of 50 cents vs. 67 cents a year ago on revenue gain of 11%. The first decline in earnings since the year 1996, the company also stated that the sales at its U.S. stores 6.9% and a decline in operating margin. The company set its third quarter earnings forecast at 59 cents to 63 cents per share and kept its full-year forecast at $2.88 to $2.95 per share.


12:30PM European markets advanced on U.S. inflation data.
European markets posted solid gains Tuesday as benign U.S. inflation data cheered investors, bringing them back into the market. In corporate news, the biggest Swiss bank UBS rose 3.9% after reporting 47% profit growth in the second quarter. Hennes & Mauritz gained 3.6% on 2% same-store sales growth in July and 11% increase in overall sales. In the health care sector, Sanofi-Aventis rose 2.5% after the company and partner Bristol-Myers filed for a preliminary injunction ordering Apotex Inc. and Apotex Corp. to halt sales of a generic version of the drug Plavix. The German DAX 30 led gainers with 1.5% advance, followed by the French CAC 40, up 1.4%, and London FTSE 100, up 0.5%.

Oil price hovered over $73 a barrel ahead of oil inventory report Wednesday. Light crude September delivery fell 8 cents to $73.45 a barrel. London Brent dropped 22 cents to $74.08. The dollar traded lower versus major currencies. The euro traded at $1.2783, up from $1.2719. The dollar bought 116 yen, down from 116.67. The British pound stood at $1.8958, up from $1.8878. European gold prices declined. In London the precious metal traded at $621.40, down from $627.60 per ounce. In Zurich gold traded at $622.20, down from $628.38. Silver closed at $11.98, up from $11.97.


11:30AM The Nasdaq jumps 1.66%.
The three major market averages posted considerable advance Tuesday, with the Nasdaq and S&P500 up more than 1% as benign inflation report which helped ease worries about further interest rate increases by the Fed Reserve. The technology sector led gainers, with personal computer maker Dell (DELL: chart) up 3% after the company announced the recall of 4.1 million notebook computers to replace batteries made by Sony because of a risk of fire. The S&P Retail Index rose 1.7% after Home Depot Inc. (HD: chart) reported profits that beat estimates pushing their shares 3.3%higher. Significant strength also emerged among financial stocks. In morning trading, the Dow Jones industrial average rose 101.90, or 0.92%. The Standard & Poor's 500 index rose 13.30, or 1.05%, while the Nasdaq composite index rose 34.34, or 1.66%. Bonds rose sharply on the government's inflation report, with the yield on the benchmark 10-year Treasury falling to 4.93% from late Monday's 5%.


9:45AM Stocks rallied at opening on weak PPI.
Stocks jumped sharply higher at opening as weaker-than-expected July PPI renewed hopes the Fed Reserve will not raise interest rates in the short term. The Labor Department said prices at the wholesale level edged up by 0.1%, the smallest amount in five months in July as falling food prices helped offset higher energy costs.

Earnings reports from giant retailers were also in the spotlight. Wal-Mart Stores Inc (WMT: chart) lost 0.5% on lower quarterly profit because of a charge for selling its German stores. Home Depot Inc. (HD: chart) rose 3.4% as the home improvement retailer reported higher quarterly profit on improved sales. The company also said profit and sales growth this year would come in at the low end of its previous forecast. Staples Inc. (SPLS: chart) rose 2.5% after posting 19% profit jump in Q2 driven in part by market share gains in North America.

In other news, shares in Dell Inc. (DELL: chart) rose 1.9% supporting the Nasdaq even after the personal computer maker said it will recall 4.1 million notebook computer batteries because they could overheat and catch fire. In morning trading, the Dow Jones industrial average rose 75.00, or 0.68%. The Standard & Poor's 500 index rose 8.58, or 0.68%, while the Nasdaq composite index rose 20.56, or 0.99%.


Wholesale prices rose modestly by 0.1%, while core prices fell 0.3%.
Tuesday morning, the Department of Labor released its report on wholesale prices in the month of July. The report showed that prices rose less than economists had expected, while core prices fell unexpectedly. The Labor Department said that its producer price index edged up 0.1 percent in July following a 0.5 percent increase in June. Economists had expected the report to show a somewhat more significant increase of about 0.4 percent. The increase by the producer price index in July marked the smallest increase since the index fell 1.2 percent in February. The modest increase in prices came in spite of a notable increase in energy prices, which rose 1.3 percent in July after rising 0.7 percent in June. The increase in July marked the biggest increase since prices surged up 4.0 percent in April.

The rise in energy prices was partly offset by a decrease in food prices, which fell 0.3 percent in July after jumping 1.4 percent in June. The drop in food prices came as prices of eggs for fresh use fell 26.1 percent in July after surging up 27.7 percent in the previous month. As mentioned above, the report also showed that the core producer price index, which excludes food and energy prices, fell 0.3 percent in July after rising 0.2 percent in June. The decrease came as a surprise to economists, who had expected the index to increase 0.2 percent. The drop in core prices was partly due to a 3.1 percent decrease in prices for light motor trucks as well as lower prices for passenger cars, pharmaceutical preparations, civilian aircraft, mobile homes, newspaper circulation, railroad equipment, and integrating and measuring instruments.


9:00AM Stock futures pointed to a higher start on PPI.
U.S. stock futures recovered from earlier weakness after government data showed a lower-than-expected increase in producer prices in July. The U.S. PPI rose at a 0.1% rate in July, versus a 0.5% increase in June as falling food prices helped offset higher energy costs. Core prices fell 0.3% last month, from a rise of 0.2% in June.