[R]4:30PM Cisco report higher sales after the market close.[/R]

-Dow closed up 55.3, Nasdaq down 6.7 and S&P closed up 0.48%.
-Yield on 10-year bond closed at 5.14% and 30-year bonds at 5.21%.
-Crude oil rose 92 cents to close at $72.69 per barrel.
-Gold up $21.60 to close at $701.50 and silver up 70 cents to $14.46.
-Emerging markets in Argentina, Mexico and Brazil rose 1% or more.

Market averages braved to close higher ahead of Fed meeting tomorrow. Dow closed only 100 points below all-time high. Lingering tensions from Iran and global oil supply worries kept oil rising. Weak dollar in Asian and European trading charged gold to a new high. Gold crossed $700 for the first time since 1980. International tensions, weak dollar and U.S.’s inability to control rising government and trade deficit continues to worry currency market.

Dollar continued to decline against euro and yen. Dollar lost 0.44 yen and 0.57 euro in the New York trading. Dollar has been on the decline and near-term future of dollar is uncertain. On Saturday, Warren Buffett, Chairman of Berkshire Hathaway, mentioned that the U.S. dollar can fall substantially. Asian countries now collectively hold more than $5 trillion of the U.S. dollar.

AOL division of Time Warner (TWX: chart) reported that it plans to cut 1,300 jobs. Majority of the jobs will be associated with shut down of call-canter in Jacksonville, Florida.

After-the-close Cisco (CSCO: chart) reported third quarter earnings of $1.40 vs. $1.41 per share. Earnings per share for the period jumped up to 22 cents from 21 cents in the same period on the account of lower number of shares. Revenue rose 18% in the period to $7.32 billion beating the estimate of $7.16 billion largely due to the recent acquisition of Scientific-Atlanta. Cisco rose 4% in the after-market trading hours.

California Pizza Kitchen (CPKI: chart) reported 17% rise in sales and earnings per share of 23 cents vs. 22 cents a year ago. Kerr-McGee reported that plans to split stock 2 for 1 on July 3rd and hiked quarterly dividend to 6.25 cents from 5 cents per share.



[R]2:15PM Fluor and Chipotle report earnings, Coach announces buy-back.[/R]
Coach (COH: chart), a hand bag retailer, reported that the company board has authorized buy-back program of $500 million to be executed by the end of June of 2007. Coach has traded between $24 and $37 in the last one year and recently the stock has lost 20% from the peak.

Fluor (FLR: chart) reported after-the-close first quarter net income rose to $1 a share from 56 cents a year ago with revenues for the period increasing 27% to $3.62 billion. The company raised 2006 full-year earnings outlook from $2.80 to $3.10 to $2.90 to $3.20 a share. Flour shares, up 21% since the beginning of the year, rose another 0.4% on Monday closing at $93.75.

Chipotle (CMG: chart) reported earnings of 26 cents a share up from 10 cents a share a year ago. Revenue increased 42%. Outlets open at least one year saw sales rise 19.7%. Operating margins rose from 17.1% to 20.2%. General and administrative expenses were lowered to 8.2% vs. 8.4% a year ago.

[R]12:30PM European markets closed higher on telecoms.[/R]
European markets closed in the positive, lifted by gains in the telecommunications and automotive sectors which helped offset weakness among tech stocks. Shares of Vodafone Group rose 3.2% on a report that U.S. Verizon Communications offered to buy out Vodafone''''s 45% stake in Verizon Wireless for $38 B. Automakers Renault and Volkswagen rose 3% and 4% respectively, following a brokerage upgrade on General Motors. Tech stocks Infineon Technologies and STMicroelectronics declined after computer giant Dell cut its profit outlook. Merger-and-acquisition deals provided some support with steelmaker Arcelor rising 2.2% on speculations that Mittal will raise its offer.. The German DAX 30 added 0.2%, the French CAC 40 rose 0.6%, and London FTSE 100 climbed 0.6%.

Crude oil prices rose over $1 as a latter from Iran’s leader to President Bush failed to settle the tensions. Light sweet crude June delivery rose $1.13 to $70.90 a barrel. Gasoline gained 2 cents to $2.028 a gallon, while heating oil added 5 cents to $2.006. London Brent climbed $1.09 to $71.30. European gold advanced on weaker dollar and higher oil prices. In London the precious metal rose to $695.50 per troy ounce, up from $677. In Zurich gold gained to $694.40, up from $675.90. Silver closed at $14.20, up from $13.90. The U.S. dollar dropped vs. major currencies in European trading. The euro traded at $1.2766, up from $1.2704. The dollar bought 111.14, down from 111.69 yen. The British pound was quoted at $1.8667, down from $1.8569.


[R]11:30AM Stocks traded mixed ahead of FOMC meeting.[/R]
Stocks traded mixed as markets nervously awaited news on interest rate hikes and the tech sector declined on profit warning from Dell. While the tech-heavy Nasdaq moved below the flat line, the Dow moved to the upside, benefiting from a strong gain by shares of General Motors (GM: chart). The auto maker rose 4.2% after the company revised its Q1 loss to a profit due to an accounting change. Shares of GM were also lifted by an upgrade by Deutsche Bank, which raised its rating on the stock to hold from sell. Blue-chip stocks Home Depot (HD: chart), McDonald''''s (MCD: chart), and Alcoa (AA: chart) notably advanced, providing further support to the Dow Jones index. At the same time, Hewlett-Packard (HPQ: chart) and Intel (INTC: chart) posted significant losses, reflecting weakness throughout the technology sector. A sharp rise in the price of gold, up $15.10 to $695, helped gold stocks recover from weakness shown in the two previous sessions, with the Amex Gold Bugs Index currently up 2.2%. Similarly, energy stocks also benefited from an increase in the price of oil to $70.75 a barrel.


[R]10:30AM Sensex finishes above the 12,500 mark to hit yet another high.[/R]
Sensex in India finished up 51.39 points, at 12,513.86, or 0.41% higher. Total turnover on BSE came to 4,907 crore, lifted by the most traded script today ONGC, which saw a block deal of 16.63 lakh shares. The market-breadth was near 1.5:1 as 1,510 stocks advanced, against 1,029 that sank.63 scripts remained unchanged. ONGC led the gainers, moving 4% up to Rs 1,434 on a high volume of lakh shares. Auto tocks also performed strongly due to lower oil prices. Maruti Udyog advanced 2.37% to Rs 962 and Tata Motors jumped 2.33% to Rs 985.60, after a recent Supreme Court decision, favorable to the company. Supreme Court has disallowed overloading of transportation trucks benefiting the Tata Motors truck division. Sales are expected to be higher for the rest of the year. Goetze India surged 20% after an American company Federal Mogul is reported to have bought the entire stake of its majority partner. Goetze close at Rs 300.50.

Tata Steel rose 2.26% to Rs 659.20 on a high trading volume. Among the decliners was Dr Reddy’s which declined 2.16% to Rs 1,646.15. ONGC led the most active stocks in trading value stock with a turnover of Rs 300.67 crore or $63 million, followed by Reliance Industries with Rs 252.90 crore and Tata Motors with turnover of Rs 133.71 crore. Kamdhenu Ispat initial publilc offering listed shares at Rs. 25 and traded as high as Rs. 50 before settling at close to Rs. 45.75 on a heavy trading volume.