U.S. AVERAGES

Labor market and retail sales strength gave early boost to the averages at the opening which have been sustained at mid-day. Weakening rally in the last one hour still remains firm and broad.

Retail sales in July were $357 billion, up 1.8% from June and up 10.3% from one year ago. Excluding automobiles, retail sales were $271.4 billion, up 0.3% from last month and up 8.1% from July 2004.

Oil price briefly touched to $66 before settling at $65.45 per barrel. Paris based International Energy Agency confirmed the view expressed by the U.S. EIA that the world oil demand will grow slowly this year and daily demand for oil will rise by 1.6 million barrels less than previously thought.

Oil price is up 50% from a year ago and 40% since the beginning of the year.

Today’s rally is driven by rise in energy, mining, discount retailers and select bio-tech and REIT stocks. Refco, financial services firm prices 25 million shares at $22 and at close the share jumps 23%.

Whirlpool Corp. made an aggressive move to secure the deal to acquire rival Maytag Corp. by boosting its offer for a third time to $1.79 billion, or $21 a share. Including the assumption of $977 million of Maytag debt, the entire deal was valued at $2.7 billion.

Yahoo! (YHOO: chart) said Thursday morning that it has agreed to take a 40% economic interest in Chinese e-commerce company Alibaba.com. Yahoo! said it would pay $1 billion in cash and add its China business to that of Alibaba, with the 2 firms working together to increase the Yahoo! brand in China. Yahoo! revealed that the deal gives it 35% of Alibaba's voting rights.

Target Corp reported 2Q earnings of 61 cents vs. 39 cents on a continuing operations basis. The last year’s earnings were at $1.53 when recently sold results of Marshall Field’s chain were included. Total revenue in the quarter rose 14% and same store sales grew 6.7%.

Advance Auto Parts Inc., auto parts retailer, reported 2Q net earnings of 90 cents a share vs. 70 cents a share, in the year-ago quarter, beating analysts’ estimate of earnings at 87 cents a share. Net sales rose to $1.02 billion vs. $908.4 million last year. The company sees 3Q earnings at 78 - 83 cents a share and 4Q per-share profit at 50 - 54 cents. For 2005, the company lifted its earnings forecast to $3.12 - $3.18 a share.


NTERNATIONAL MARKETS

European markets fell across the region as investors weigh the impact of oil on corporate earnings and economic growth. Other than oil-heavy FTSE index in London and Norway, markets in Germany fell 0.7% and in Paris declined 0.4%.

German telecom giant Deutsche Telekom ended lower 2.1% after it reported second quarter income growth of 63%. ING, Dutch insurance and banking giant fell 2.7% after second quarter earnings fell 6.7%.

Insurance company stocks experienced heavy trading as Britain’s Aviva and Royal Sun & Alliance declined 2% each despite rise in earnings of 21% and 100% respectively. Aegon, Dutch insurance stock declined after reporting rise in net of 71%. Allianz just a day ago reported 64% rise in net income.

U.S. ECONOMIC NEWS


ADVANCED JULY SALES FOR RETAIL SALES AND FOOD SERVICES

July retail sales advanced 1.8% less than expected 2% but more than June gain of 1.7% driven by auto discounting from auto manufacturers. Excluding auto sales the retail sales advanced 0.3% less than estimates of 0.6%.