U.S. MARKET AVERAGES

The stocks made a mild come-back in the afternoon’s trading on falling oil prices. The oil still near its all-time high of $67 had shaken market confidence and several traders were taking profit in the morning. The rise in tech sector, better earnings from Lowe’s and sales of chip unit by Agilent Technologies put market into the positive territory. Investors however remain cautious ahead of CPI and PPI index releases and housing starts data this week


The Congressional Budget Office projected lower 2005 federal deficit of $331 billion, 2.7% of GDP, an improvement over earlier forecasts and far below last year’s $368 billion.

Wall Street has been fluctuating for weeks on healthy economy assurances and soaring crude-oil prices. Last week investors were soothed by strong corporate earnings and upbeat Fed. Reserve report, but constantly rising crude prices, which surpassed $67 a barrel, undermined their confidence.

The Labor Department is releasing a consumer and producer price reports this week and Wall Street could face another streak of volatility.

Crude futures opened the week lower on eased refinery concerns without reports of new refinery breakdowns. Crude traded recently 49 cents down at $66.37 on the NYMEX. Gasoline fell nearly 2 cents a share to $1.9858 a gallon, while heating oil lost a cent to $1.8965. Demand for gas will remain high in August but is expected to drop after the Labor Day.

Lowe’s, Apple Computer and Sysco reported strong quarterly results which lifted their stocks. Lowe’s reported 20% jump in earnings on 17% rise in revenue on the back of 6.5% same-store sales growth. Apple shares jumped 10% in the three trading days on two analysts upgrade and one setting the target of $52.

Delta Airlines was trading lower ahead of imminent bankruptcy speculations.

Wal-Mart is expected to report Tuesday a profit rise of 65 cents a share, up from 62 cents a year ago. Wal-Mart expects August sales increase to meet forecasts of 3 to 5% rise, but its shares fell 2 cents to $48.68.

Home Depot, home improvement shop, is due to post Tuesday quarterly income of 80 cents a share, up from 71 cents a year ago on improved sales due to do-it-yourself spending.

Hewlett-Packard, computer and printer maker, is due to release a quarterly report Tuesday afternoon. According to analysts’ expectations earnings will be 31 cents a share vs. 24 cents last year. The company announced its decision to cut another 10% of its 150,000 workers on rivalry with Dell Inc. and IBM Corp.

Apple Computer was named by Piper Jaffray a top recommended large capitalization stock for the rest of 2005. The stock rose $2.10 to an all-time high of $46.10.

British Airways rose 7 cents to $62.74 after announcing that it resumed 80% of its scheduled international flights and 85% of its domestic flights.


ECONOMIC NEWS

The government is set to release several economic indictors this week including the index for inflation, housing starts and building permits, producer’s price index, capacity utilization and weekly unemployment level.

The index in the last six months has shown low inflation as measured by the Consumer Price Index. The CPI for July, ex food and energy cost, is likely to be at or below 0.2% following 0.1% rise in June.

Higher food and energy prices are passed on to consumer by gasoline and groceries stores but manufactured goods are still discounted. The computers, electronics and automobiles are still selling at or below prices registered last year. Commodities including oil, copper, iron ore and coal are trading near all-time high.

July prices paid to producers for finished goods is likely to jump 0.5% and prices paid to factories and farmers is likely to be 0.1% higher after declining 0.1% in June.