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 remain close to $65 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.

Today’s rally is driven by rise in energy, mining, discount retailers and select bio-tech companies.

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.


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%.

The following is the unedited transcript of the text from the U.S. Census Bureau News which can be accessed at www.economicindicators.gov.

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for July, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $357.0 billion, an increase of 1.8 percent from the previous month and up 10.3 percent from July 2004.

Total sales for the May through July 2005 period were up 8.8 percent from the same period a year ago. The May to June 2005 percent change was unrevised from +1.7 percent.

Retail trade sales were up 1.9 percent from June and were up 10.7 percent above last year. Gasoline station sales were up 20.3 percent from July 2004 and sales of motor vehicle and parts dealers were up 17.9 percent from last year.

LABOR MARKET

The weekly and four-week average for the unemployment claims declined as reported by the Labor Department. The weekly initial claim for the week ending August 6th declined by 308,000 was in stark contrast to the Wall Street’s expectation of rise to 315,000. The four-week average moved to the lowest level reached since February 26.

The following is the unedited transcript of the news release from the Labor Department, which can be obtained at www.dol.gov.