4:30PM Deal of $8 billion and inflation report failed to excite traders.

-Yield on 10-year bond closed at 4.75% and 30-year bond at 4.9%.
-Crude oil rose 23 cents to $70.26 per barrel.
-Gold gained $8 to close at $628.20 per ounce.

-Asian Markets advanced, led by 1.7% gain in Japan, Thailand and Australia up 0.9% and Hong Kong up 0.6%.

-European markets closed lower, led by 0.4% in the UK and France. Spain, Switzerland and the Netherlands dropped 0.2%.

-Latin American Markets rose, led by Chile with a gain of 0.7%, Argentina and Brazil rose 0.5% and Mexico dropped 1.2%.

News on inflation, same-store sales and factory orders made rounds in the trading community on a day when trading was light. The trading volume on NYSE and Nasdaq system was 1.7 billion and 1.5 billion shares.

Commerce Department reported that personal income in July rose at 0.5% and personal expenditure rose at 0.8% in the month. The price index for personal consumption expenditures rose 0.1% in July, excluding food and energy. With this rise, annual core PCE rose at 2.4%, significantly above the target range of between 1% and 2%. The Department also reported that factory orders declined 0.6% in July, less than expected decline of 1%.

Same store sales for August did not reflect any change in the trend in place for more than six months. Large format stores, apparel stores and discount stores reported a mild rise in same-store sales. Wal-Mart (WMT: chart) reported same store rise of 2.7% and Target (TGT: chart) reported a rise of 2.8%.

Gap (GPS: chart) reported negative same-store sales for the fifth month in a row. Sales in six of the last eight months declined from a year ago. Pier One (PIR: chart) reported same-store sales decline for the seventh month in a row and for seven of the last eight months sales declined from a year ago. Pacific Sunwear (PSUN: chart) reported sales decline for the sixth month in a row.

Joy Global (JOYG: chart) reported better-than-expected earnings and confident outlook propelled the stock 21.5%.

3:30PM Goldcorp agrees to acquire Glamis Gold in all-stock deal worth of $8 billion.
Gold mining companies have been in the merger wave for last two years supported by a rise in demand and price for gold. Canada incorporated but headquartered in Reno, Nevada, Goldcorp said that as a result of the deal the combined company will have proven reserves of 41 million ounces of gold. The combined company will also have substantial silver reserves in Mexico.

The company was ranked as third largest gold producer in the North America and had third largest reserves in the region as well. The combined company will have 11,000 employees and will be based in Canada. Ian Tefler, the current chief executive and president of Goldcorp will be the chairman of the new Goldcorp. Kevin McArthur, president and chief executive of Glamis will become president and CEO of Goldcorp.

Goldcorp (GG: chart) has operations in the North and South America and Australia. Glamis (GLG: chart) has operations in Nevada, Mexico and Central America.


2:30PM Joy Global earnings lift stocks of construction equipment stocks.
Joy Global (JOYG: chart) reported third quarter sales rose 17%. Net income in the quarter rose to $1.53 per share from $0.25 a year ago. The current quarter earnings included a reversal of tax allowances that added to $111 million or 90 cents per share.

The stock jumped 17% or $6.30 on the news and lifting other equipment stocks with it. Terex (TEX: chart) gained 8% and Manitowoc (MTW: chart) gained 4%. The mining company equipment maker offered upbeat outlook for the mining industry. The company chairman and chief executive John Hanson said that we see no peak in demand for our products and services and, with the exception of short-term softness in the U.S. coal markets, our customers’ commodity markets continue to exhibit robust conditions.”

Total revenues in the third quarter were $599 million, a 17 percent increase over the $513 million reported in the third quarter of 2005. This increase was particularly evident in aftermarket parts and services revenues, which rose by 24 percent from the prior year’s third quarter. Aftermarket revenue growth was strong in both operations, particularly at Joy Mining with a significant rise in parts and complete machine rebuilds. Aftermarket revenues were 63 percent of total quarterly revenues compared with 59 percent in the third quarter of fiscal 2005. Original equipment revenue growth in the quarter was limited by mining shovel capacity at P&H Mining.

Gross margins rose in the quarter to 32 percent of sales from 28 percent of sales last year. Operating leverage in the quarter was again very strong, with incremental profitability of 44 percent for Joy Global in total. This unusually high operating leverage was due to a combination of factors, including a higher percentage of aftermarket revenues at Joy Mining, favorable product mix in original equipment revenues overall, good recovery of material cost increases and the stringent control of overhead costs.

The company repurchased 3.8 million shares in the quarter and has purchased 5 million for the year so far. The company reported in the conference call that only $50 million of capital is left in the stock buy-back plan.