11:30AM Blue chips moved higher on P & G.
Stocks traded narrowly mixed Thursday, reflecting investor worries on interest rates following a pair of rate hikes overseas. However, economic data releases pointed to a slowing economy, which raised hopes that the Fed might pause in its rate hiking strategy. The ISM's service sector index for July came in at 54.8, lower than the 56.5 reading expected by economists. June factory orders rose 1.2%, less than the 1.7% increase expected.

At the same time, U.S. blue-chip stocks moved to the upside after Procter & Gamble Co. (PG) shares rose 1.3% on news rival Unilever reported higher revenue. The Anglo-Dutch consumer goods maker reported a rise in sales growth. In late morning trading, the Dow Jones industrial average rose 19.29, or 0.17%. The Standard & Poor's 500 index lost 1.04, or 0.08%, and the Nasdaq composite index dropped 0.58, or 0.03%. Bonds fell slightly in response to the European rate hikes, with the yield on the benchmark 10-year Treasury note rising to 4.97% from 4.96% late Wednesday.


Durable goods orders increased less than expected.
The Department of Commerce released its report on new orders for manufactured goods in the month of June on Thursday. The report showed that orders grew by less than economists had been expecting. The report showed that new orders for manufactured goods rose 1.2 percent in June following an upwardly revised 1.0 percent increase in May. Economists had expected orders to increase by 1.8 percent compared to the 0.7 percent increase originally reported for May. The increase in orders for manufactured goods reflected a downwardly revised 2.9 percent increase orders for durable goods. Last week, the Commerce Department said durable goods orders rose 3.1 percent compared to a 0.3 percent increase in May. At the same time, a decrease in orders for non-durable goods helped to offset the increase in orders for durable goods. The report showed that orders for non-durable goods fell 0.7 percent in June. The report also showed that shipments fell 0.3 percent in June following a 2.5 percent increase in May, while inventories rose 0.8 percent in June after rising 0.7 percent in May. Subsequently, the inventories-to-shipments ratio edged up to 1.16 in June from 1.15 in May.

Business activity in the service sector fell more than expected.
Thursday morning, the Institute for Supply Management released its report on business activity in the service sector in the month of July. The report showed that the pace of growth in the sector slowed more than economists had expected. The ISM said that its index of business activity in the sector fell to 54.8 in July from 57.0 in June. While a reading above 50 indicates growth in the sector, economists had been expecting a more modest decrease to a reading of 56.5. The decrease by the index was partly due to a slowdown in the pace of new orders growth, with the new orders index falling to 55.6 in July from 56.6 in June. Nonetheless, new orders still grew for the 40th consecutive month. At the same time, the repot showed that employment expanded at a faster pace, as the employment index rose to 54.5 in July from 52.0 in June. Inventories also saw faster growth than in the previous month. The ISM also said that its reading on inflation in the service sector showed an acceleration in the pace of price growth. The prices index rose to 74.8 in July from 73.9 in June.


10:30AM The Sensex notches modest gain after hitting record high earlier.
The Sensex in India ended with a gain of 46.97, on 10,923.16, reaching the 11,000 mark earlier in the trading session. The market-breadth was strong. For 1,488 shares that advanced, 975 declined and 72 shares were unchanged. The turnover on BSE was Rs 2,931 crore, higher than Wednesday’s Rs 2,666 crore.

Ranbaxy led the gainers, advancing 3% to Rs 389.50 in the wake of a U.S. federal appeals court decision to invalidate a secondary Pfizer patent, paving the way for an earlier launch of a generic form of Lipitor, the U.S. pharma company’s cholesterol drug. ICICI Bank climbed 1.1% to Rs 554.05 after its ADR advanced 2% on Wednesday to $ 26.55.

HDFC Bank also notched up 1.8% to Rs 794 as its ADR advanced 0.7% on Wednesday to $ 53.45. Housing finance large-cap HDFC gained 1.7% to Rs 1,212, raising lately home loan rates across the board by 50 basis points. Bharti Airtel advanced 1% to Rs 397.45 after reporting that it had given a $107 million outsourcing contract to IBM. Grasim also moved up 1.79% to Rs 2,116.40 and Bajaj Auto gained 1.48% to Rs 2,581.00.

Sugar stocks soared due to reports that the government had partially lifted its ban on sugar exports. Dwarikesh Sugar surged 12% to Rs 121, Dhampur Sugar jumped 10.8% to Rs 109, Balrampur Chini Mills advanced 7% to Rs 96.80, Bannari Amman Sugar climbed 5% to Rs 1,020.30 and DCM Shriram Consolidated advanced 5% to Rs 83.90.

Reliance Industries slipped 0.5% to Rs 985, sharply off the session’s high of Rs 1,007.45. As for reports, Reliance Industries has raised petrochemical prices between 3% and 9% in August 2006. Hindustan Lever also lost 1.8% to Rs 223.75 and cigarette large-cap ITC slid 1.3% to Rs 171. Oil exploration company ONGC was off 1.4% to Rs 1,176. Other decliners included BHEL with a loss of 1.60% to Rs 2,118.75, Dr Reddy''s lost 0.75% to Rs 1,407.95 and ACC shed 0.67% to Rs 861.95.

Great Eastern Shipping lost 1.6% to Rs 219.65 following the company comment that its board had decided not to proceed with the demerger of its offshore business as the six-month timeline to complete the process had passed.


9:45AM Stocks opened in the negative.
U.S. stock markets opened in the negative, reflecting growing concerns about further interest rate increases after a pair of European central banks raised interest rates. Mixed monthly retail sales also contributed to the negative mood. The stock market''s decline came despite a slight rise in weekly first-time unemployment claims. First-time claims rose to 315,000, up from 301,000 the previous week.

Wal-Mart Stores Inc. (WMT) gained 0.3% after reporting a 2.4% gain in same-store sales. Limited Brands Inc. (LTD), operator of retailers such as Victoria''s Secret and Bath & Body Works, rose 3.6% after posting a 7% jump in same-store sales. Target Corp. (TGT) posted a lower-than-expected 3.1% increase in same-store sales, sending company’s shares down 1%. Gap Inc. (GPS) dropped 3% after the clothing retailer said its sales dropped 4 percent for July.

The early weakness was partly due to some disappointing earnings news. Conglomerate Tyco International Ltd. (TYC) said its quarterly profits fell from a year ago due to one-time charges and stock option expenses. In midmorning trading, the Dow Jones industrial average fell 29.86, or 0.27%.

Commodity stocks were among the worst performers in the first half hour of trading. Oil prices fell as the storm in the Caribbean lost strength overnight, dragging energy stocks lower. The gold sector also declined in the early going, sliding by about 1.8%. The coal sector continued the profit taking that began in the previous session. Telecommunications stocks also came under pressure in early trading, with Sprint Nextel (S) helping to lead the sector lower after the company reported Q2 earnings that fell sharply year-over-year. Internet stocks moved modestly higher during Thursday''s early trading, with eBay (EBAY) rising 1.5%. The drug, chemical and bank sectors also posted some strength. The Standard & Poor''s 500 index lost 6.08, or 0.48%, and the Nasdaq composite index dropped 14.16, or 0.68%. Bonds fell in response to the European rate hikes, with the yield on the benchmark 10-year Treasury note rising to 4.98% from 4.96% late Wednesday.


Initial jobless claims rose more than expected.
Thursday morning, the Department of Labor released its report on initial jobless claims in the week ended July 29. The report showed that jobless claims rose more than economists had been expecting. The report said that initial jobless claims rose to 315,000 from the previous week''s revised figure of 301,000. Economists had expected jobless claims to increase to 305,000 compared to the 298,000 originally reported for the previous week. The Labor Department also said that the four-week moving average rose to 313,750 from the previous week''s revised average of 313,500. The increase comes after the less volatile moving average fell in the two previous weeks. The report also showed that continuing claims in the week ended July 22 rose to 2.498 million from the preceding week''s revised level of 2.469 million. The bigger than expected increase in jobless claims may raise some concerns about the strength of the July employment report due to be released on Friday. The report is expected to show that the U.S. economy added 150,000 jobs in July.