U.S. MARKET AVERAGES

U.S. stocks opened lower on Thursday after China moved away its yuan currency exchange rate versus the dollar, which could hit the profits of companies that source heavily from China, such as Wal-Mart Stores Inc, whose shares fell 1.4% percent.

Stocks tended to move higher in pre-market trading after the news that China would no longer peg its currency to the U.S. dollar but later stocks declined on news of further blasts in London’s underground.

Treasurys were sharply lower. The benchmark 10-year note lost 24/32, or $7.50 per $1,000 invested, to yield 4.252. The 30-year bond rose 1 6/32 points to yield 4.463%. Yields move inversely to prices.

The HMO sector sharply declined in the first half hour of trading and has been narrowing some of its losses over the past 2 hours. The segment is still down, falling 6.5% to its lowest level in about 7 weeks.

Tech sector drags the market down, with the disk drive sector down 2.6% and the semiconductor and networking spaces lower by 1.7% each.

The gold sector is up about 1.3%. Internet stocks are strong. The retail sector posts modest gains.

Microsoft reports its fiscal fourth-quarter earnings Thursday. Excluding stock-based compensation expenses, analysts see earnings at 31 cents a share, up vs. 28 cents a year ago.

Google is expected to post second-quarter earnings of $1.20 a share, excluding stock-based compensation, up vs. 58 cents a share last year.

Coca-Cola Co. was up 82 cents after posting 2Q that rose 8.8% on a 5% increase in unit case volume driven by strong international sales.

McDonald's dropped 28 cents after 2Q revenue rose more than expected but earnings declined.

Nokia Corp. declined $1.96 after the company's 3Q earnings estimate missed expectations.

eBay Inc. jumped $6.34 after 2Q earnings surged beyond expectations.

SBC Communications fell 15 cents to 23.65 after the company reported a drop in 2Q profit.

EMC Corp. fell 70 cents after the company projected lackluster 3Q earnings and revenue, despite a strong 2Q results.

ECONOMIC NEWS

China put an end to a decade-old fixed exchange rate to the dollar. The new yuan rate revalues the currency by 2.1% to 8.11 per U.S. dollar immediately. China will value the yuan against a number of currencies as the new system will allow it to rise or drop according to the fluctuations of the dollar versus other currencies.

The Federal Reserve Bank of Philadelphia released its survey of regional manufacturing activity, with the diffusion index of current activity rising to 9.6 for July. In June, the measure came in at negative 2.2.

The Conference Board announced its basket of leading economic indicators climbed 0.9% in June, beating expectations. The board also revised numbers for the two previous months upward.

The number of Americans filing new claims for unemployment benefits declined by the largest amount in 2 1/2 years last week, reflecting a slowdown in layoffs in the auto industry.
The Labor Department said that new benefit claims fell by 34,000 to a new total of 303,000 as the labor market continued to signal strength.