10:00AM New York – Shanghai gains bucking the regional trend. Baidu.com surges in New York trading.

Shanghai Composite Index gained 0.5% to 4,346.45 and Hang Seng Index fell 0.64% or 150.49 to close at 23,211.69.

Government of China today allowed the state controlled insurance companies to invest in overseas companies and properties. Moody’s raised rating for China to A1 and to A2 from A3 for Hong Kong. China’s foreign reserve of $1.3 trillion and foreign debt of $323 billion played a key role in the debt rating revision. Another factor that played a key role is that Chinese government has managed to increase its share of GDP to 20% from 10% in less than a decade. While Hong Kong government has no debt, has third largest reserve of foreign exchange in Asia.

Profit expectations kept market averages at the elevated level in Shanghai. Airlines, banks, brokerage, and Internet companies led the rally.

Baidu.com shares surged 17% in New York trading this morning after the company reported second quarter earnings of 142 million yuan from 58.5 million yuan on sales growth of more than 100% to 401.3 million yuan. The company forecasted third quarter sales of between 492 million yuan and 506 million yuan. The revenue of the search engine companies are likely to triple in the next five years as more people use Internet to search information in China. There are more than 150 million users in China, second largest user base in the world but the search engine advertising revenue is less than $220 million this year. The search engine market ads are expected to grow fourfold in the next five years.

Local analysts estimate that Baidu.com has more than 50% market share in Chinese searc market and is expected to remain leader for the foreseeable future followed by Google with less than half the market share of Baidu.com.

Haitong Securities Co. reported first half profit of 2 billion yuan from 214 million yuan a year ago on rising stock market indexes and feverish online day trading. Revenue in the first jumped three fold to 4.8 billion yuan. The company with a branch network of 124 locations and 2 million accounts earned 650 million yuan in the year 2006. the company has filed to sell 1 billion stock at 13.15 yuan in a private placement and expects approval from the government to list its share on the exchange by merging with a shell company Shanghai Urban Agro-business Co.


09:45AM Wall Street opened lower, weighed down by credit markets concerns and rising oil.

Wall Street opened steeply in the red, dragged down by continuous worries in credit markets and the housing sector, as well as surging oil prices. The Commerce Department said that sales of new homes dropped 6.6% in June to a seasonally adjusted annual rate of 834,000 units, the largest percentage drop since January.

In addition, weak results posted by homebuilders added built on concerns. D.R.Horton (DHI) swung to a Q3 loss of $2.62 a share, from net income of 93 cents a share a year ago. The stock dropped 4.5%. Among other companies releasing quarterly results, Dow Chemical (DOW) reported that its net income increase to $1.07 a share, from $1.05 a share last year, with sales rising 6% to $13.27 billion. The results beat analyst expectations, but the stock dropped 4.3%.

Further on the earnings news front, oil giant Exxon Mobil Corp. (XOM) posted Thursday an unexpected drop in Q2 profit, hurt by lower natural gas prices. However, the company released net income of $10.26 billion, the fourth-largest quarterly profit ever recorded by a publicly traded U.S. company. On a per-share basis, Exxon Mobil earned $1.83 a share, up from $1.72 from a year ago, missing forecast of $1.96 a share. Company’s revenue fell to $98.35 billion from $99.03 billion a year ago but topped estimates of 97.6 billion. Exxon Mobil shares slipped 2.5%.

In morning trading, the Dow Jones industrial average fell 67.71, or 0.49%, to 13,717.36. The Standard & Poor''s 500 index was down 12.49, or 0.82%, at 1,505.60 and the Nasdaq composite index tumbled 15.73, or 0.59%, to 2,632.44.


9:00AM U.S. stock futures pointed steeply down, dragged by surging oil.

U.S. stock futures pointed steeply lower Thursday, reflecting continued concerns about the corporate and mortgage lending markets and rising oil prices. Beazer Homes USA (BZH) and D.R. Horton (DHI) will be in the spotlight. Light sweet crude jumped as high as $76.99 a barrel in electronic trading on strong demand from refiners. Stronger-than-expected results from Apple and Ford failed to offset the decline.

Apple (APPL) shares climbed 7.1% in pre-open trade after the company reported a 73% profit rise on sales of Macintosh computers. Ford (F) rose 1.3% after posting the first profitable quarter in two years. Market also awaited key economic data on June home sales figures.

Further on the earnings news front, office products retailer Office Depot (ODP) posted 8% profit drop in Q2, due to weak sales in North America. Net income fell to 40 cents per share, from 41 cents per share a year ago, while sales rose to $3.63 billion from $3.49 billion a year earlier. Excluding charges, the company earned 43 cents per share, meeting the average analyst estimate.

Among other pre-market highlights, ExxonMobil (XOM) reported an unexpected decline in Q2 profit. Dow Chemical (DOW) posted 2% profit rise, slightly better-than-expected. Both insurers Aetna (AET) and Travelers (TRV) raised their earnings guidance.

In economic news, the Commerce Department said that durable goods increased less-than-expected 1.4%. According to another report, initial jobless claims unexpectedly inched lower in the latest week. The number of initial claims in the week ending July 21 fell 2,000 to 301,000. S&P 500 futures dropped 15.9 points at 1,508.60 and Nasdaq 100 futures dropped 16.25 points at 2,010.25. Dow industrial futures declined 106 points.