U.S. MARKET AVERAGES

The U.S stock markets made a flat opening of the Wednesday session overshadowed by 2Q GDP report, released before the bell and continuous uncertainty about the impact of Katrina on the U.S. oil facilities, but stocks gained some ground after U.S. Energy Secretary Samuel Bodman announced a decision made by the Bush administration to release some oil from the Strategic Petroleum Reserves.Oil prices had climbed as high as $70.65 a barrel in the pre-trading electronic trading but eased after the announcement.

Investors were also relieved by solid GDP figures for the second quarter, although 2Q GDP growth was unexpectedly revised downward to 3.3% growth compared with earlier reported figures of 3.4% and missing expectations of 3.5%.

Goldman Sachs was chosen as lead underwriter for Bank of China's highly anticipated multi-billion dollar IPO.

Late Tuesday, Sigma Designs Inc. reported 2Q 25% revenue growth as compared with the first, beating expectations. The company's second-quarter net income, however, fell 86% as chipsets revenue slipped while operating costs increased.

Tiffany & Co. , jewelry retailer, posted 2Q earnings of 35 cents a share vs. 22 cents a year ago, beating estimates of 24 cents a share on sales rise of 11%. The company raised its full-year guidance.

Culp Inc., NCI Building Systems are also expected to release reports.

ECONOMIC NEWS

The Commerce Department released the second-quarter GDP report which showed unexpected downward revision of 3.3% growth from previously reported 3.4%, disappointing economists’ expectations of 3.5% increase.
The 2Q GDP growth compares to 3.8% in the first quarter and according to the Commerce Dept. the decline reflects a downturn in private inventory investment as well as increase in consumer spending, exports, equipment and software spending. The downward revision is also attributable to the upward revision of imports and downward revision to consumer spending.
In addition, the report indicated 1.6% rise in the 2Q of the index for prices excluding food and energy compared with 2.4% growth in the first quarter.

Other economic data expected to be released Wednesday includes the New York NAPM August index of regional business activity and the Chicago PMI index for August in the afternoon the previous reading. Economists see a drop in the reading to 61.0 in August from 63.5 in July.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks closed the trading session mixed, reflecting surging crude-oil prices, boosted by the devastating impact of Hurricane Katrina on U.S. oil facilities, as well as accelerating U.S. inflation data. The Japanese stocks lost 0.3% on sharper-than-expected decrease in July industrial output of 1.1%. Among the decliners were the parts maker TDK and chip maker Advantest. Hong Kong’s Hang Seng fell 0.6%, while South Korea’s Kospi gained 0.4% reversing early losses in oil-sensitive stocks. The dollar was near a three-week high against the yen at 111.35.

European markets traded in the positive territory at mid-day as oil stocks gained ground, U.S. markets rebounded from sharp declines overnight and earnings reports provided some boost. Shares of oil majors like BP, Royal Dutch Shell and Total were sent higher. The French drug maker Sanofi-Aventis led the earnings reports, releasing upbeat quarterly news. The German DAX 30 added 0.5%, the French CAC 40 rose 0.6%, and London’s FTSE gained 0.7%.The euro added 0.03% on lower-than-expected unemployment rate in France for July.

ENERGY, METALS AND CURRENCIES MARKETS

Crude-oil prices declined from highs above $70 a barrel after the U.S. Energy Secretary announced that the Strategic Petroleum Reserves will lend oil to partially compensate losses, caused by Hurricane Katrina. Light sweet crude drooped 41 cents to $69.40 a barrel after slipping to $68.91 right after the loan from SPR was announced. London Brent fell 48 cents to $67.09.

Gold advanced as record-high crude-oil prices raised the appeal for the precious metal. In London gold for immediate delivery rose $1.10 to reach $432.70 per ounce, after falling $5.30 on Tuesday and closed at $431.60 as large speculators sold their holdings. This year gold has declined nearly 1.3%.

The U.S. dollar lost further ground against the euro due to concerns over oil prices following the damage done by Hurricane Katrina. The euro bought $1.2219 in morning European trading, up from $1.2205 the night before in New York. The dollar advanced against the Japanese yen, buying 111.42 yen, up vs. 111.35 on Tuesday, but fell against the British pound, which bought $1.7862, up from $1.7842 the night before.

EARNINGS NEWS

Sigma Designs, digital media processors maker, reported 2Q net profit of 0 cents per share, down vs. a net profit of 5 cents per share for the same period last year on 2% revenue decline for the comparable period . The company posted 25% net revenue growth compared with the previous quarter. The rise in revenue is mainly due to better sales performance with regard to the IP video applications.

VA Software, open-source software and web publisher, posted Q4 net loss of 2 cents per share, down vs. a loss of a penny a share for the same period last year despite 34% revenue growth. The stock gained 12 percent in after-hours trading after the announcement.