U.S. Market Averages

Stocks traded lower during the entire session. After five days of trading higher and broader averages trading near 4-year highs, investors were in the mood to take profit.

During the session stocks in semi-conductor, networking, home builders and financial sector declined and healthcare, energy and pharmaceutical sectors gained. During the day EDS, Network Appliance and Autodesk managed to hang on to the gains of the session.

Oil prices jumped higher 44 cents on the worries of steady demand at this price level and hurricane forecast. The U.S. weather service is predicting 11 to 14 more tropical storms by the end of November. Oil refiners such as Valero and Tesoro are trading higher.

July retail sales show a mixed sales growth for various companies. While July is a month of inventory liquidation and least important month for retailers, large department and teenage retailers still managed to eke out gains. Sara Lee reported 5% decline in sales and 4Q loss of 19 cents vs. profit of 44 cents a year ago on account of 55 cents charge. The restructuring plan includes spin off of clothing business including brands Playtex and Hanes.

The hot weather skewed the purchased to air-conditioners and refrigerators. Auto sales were driven by significant discounts but apparel sales suffered due to weather conditions.

European markets closed lower as the Bank of England cut for the first time in two years its benchmark interest rate by a quarter-point to 4.5% amid slowing pace of the economic growth and increased terrorism worries. European Central Bank kept the interest rate unchanged at 2% as expected by market.

Economic News

In the week ending July 30, the advance figure for seasonally adjusted initial claims was 312,000, a decrease of 1,000 from the previous week's revised figure of 313,000. The 4-week moving average was 316,750, a decrease of 2,250 from the previous week's revised average of 319,000.

The advance seasonally adjusted insured unemployment rate was 2.0 percent for the week ending July 23, unchanged from the prior week's unrevised rate of 2.0 percent.

The advance number for seasonally adjusted insured unemployment during the week ending July 23 was 2,581,000, a decrease of 18,000 from the preceding week's revised level of 2,599,000. The 4-week moving average was 2,592,000, an increase of 2,250 from the preceding week's revised average of 2,589,750.

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INTERNATIONAL MARKET NEWS

European markets closed lower, reflecting bank shares decline after quarterly results from France’s Societe Generale and Royal Bank of Scotland and decrease of oil stocks, erasing earlier gains. In the market focus were interest rates as the Bank of England cut its benchmark rate to 4.5% for the first time since July 2003.

Averages in Germany slipped 1%, in France lost 0.8%, and in the U.K. declined 0.2%. Crude-oil prices fell below $61 a barrel. The euro slipped 0.2% to $1.7753.

Asian benchmarks closed lower with the Japanese Nikkei down 0.8% ahead of political uncertainty, retreating from a 15-month high on profit-taking in automakers, banks and select blue-chip stocks.

The other regional markets followed the suit as Hong Kong’s Hang Seng lost 0.1%, South Korea’s Kospi dropped 0.5%, and Taiwan’s Straits Times was down 0.2%. In Tokyo the dollar was trading at 111.17 yen.


ENERGY, METALS AND CURRENCIES MARKETS

At mid-day crude oil futures climbed 2% to trade as high as $62.06 a barrel on supply concerns and political uncertainty. Light sweet crude for September delivery was last quoted 52 cents up at $61.38 on the NYMEX. Heating oil September delivery rose 1.1% to close at $1.7078 a gallon. Natural-gas gained 3%.