2:30PM New York – Broader averages declined 1% on worries related to mortgage bonds and weak earnings from airlines and companies including Altria, Pfizer and Intel.

Market averages traded lower after first three hours of trading. Weak earnings news dominated trading sentiment in the morning hours. Pfizer reported 48% decline in earnings. Intel earnings jumped 44% but reported a sharp decline in gross margins. The stock fell 4.5%. Yahoo reported nearly flat earnings and lost 5.3% on the worries that company’s growth is likely to lag that of the industry for several quarters. AMR, parent of American Airlines earnings declined on higher operating costs. Domestic carrier, Southwest profit fell on higher load factor and increased capacity. Cigarette maker, Altria Group earnings fell 18% and stock declined 1.6%.

AMR (AMR: chart) reported the second quarter net income of $317 million compared to $291 million from a year ago. The earnings per share declined to $1.08 from $1.19. Revenue for the quarter rose 1.6%. The stock on the news fell 1.2%. Delta (DAL: chart) reported second quarter profit of $1.77 billion compared to a loss of $2.21 billion. The company earnings per share in the quarter were $4.49 compared to a loss of $2.21 on a revenue increase of 5.5% to $5 billion. In the third quarter Delta expects domestic capacity to fall between 1% and 3% and international capacity to rise 13%. Southwest Airlines (LUV: chart) earnings in the latest quarter fell to $278 million from $333 million or earnings per share declined to 36 cents from 40 cents. The revenue in the quarter increased 5.5% to $2.58 billion. Fuel cost in the quarter rose 24% on 14% higher jet fuel cost per gallon.


9:30AM New York – Market averages in New York fell on a decline in housing permits and stable core rate of consumer price index.

Labor Department reported that the June consumer price index increased 0.2% after adding 0.7% in May. Core rate of inflation, excluding food and energy gained 0.2% in the month and up 2.2% from a year ago. Energy prices fell 0.5% but gained 5.4% from a year ago on 1.1% drop in gasoline prices. Prices for food rose 0.5% after adding 0.3% in May.

The Commerce Department said that the housing starts in June rose 2.3% at an annual rate of 1.467 million but building permits fell 7.5% to 1.406 million units. The May starts were revised lower to 1.434 million annual units. June housing starts data suggests a decline of 19% from a year ago. Housing starts declined in the Midwest and Northeast but rose 9% in the West.

J P Morgan & Chase reported second quarter earnings rose 20% to $4.23 billion from $3.54 billion a year ago or earnings per share increased to $1.20 from 99 cents.

Altria Group Inc reported second quarter earnings of $2.22 billion from $2.11 or earnings per share increased to $1.05 from $1.00 on a revenue climb of 9.7% to $18.8 billion.

Pfizer Inc second quarter net income fell 48% to $1.27 billion or 18 cents per share. The sales declined 5.6% to $11.1 billion.


7:30AM NY – 6:30 PM Mumbai Sensex finishes 11 points higher in volatile trading, Hindalco zooms

The Sensex on BSE ended Wednesday 11.35 points higher, or 0.07%, at 15,301.17.

The benchmark index opened almost flat, up only six points and plunged right from the start on profit-taking. Volatility increased in the final hour of trading when both intra-day high of 15,325.78 and intra-day low of 15,160.27 were struck.

The market-breadth was negative with 2,706 stocks traded on the market, 1,141 advanced, 1,490 declined and 75 were unchanged. Of the 30 stocks in the Sensex, 15 advanced, while all the rest declined.

The turnover on BSE was Rs 5,720 crore, lower than Rs 6,100 crore on Tuesday. On NSE, the turnover was Rs 11,318 crore, also lower than Rs 12,729 crore on Tuesday.

Economic and financial news

Ramesh Chandra, Chairman of Unitech Ltd., announced that the real-estate company intends to invest $720 million in four years building 28 hotels together with Marriott International Inc., the biggest hotelier in the world. Four hotels are being built and another 10 will be under construction by the end of the year, and Marriott will manage the properties.

Ericsson, the largest maker of wireless networks in the world, secured a $2 billion order from Bharti Airtel Ltd. Ericsson announced in a statement that the contract will run for two years. Ericsson manages Bharti networks in 15 of the 23 zones that make up India's telecommunications market.

Trading highlights

DLF was the most-active stock with a turnover of Rs 370 crore followed by Indiabulls Real Estate and GMR Infra.