[R]3:00PM Oil and gas stocks are trading at their worst level for the year after a sharp decline in the last thirty days.[/R]
Market averages are still in the negative zone but have recouped most of the loss of day on falling oil price. Oil declined 1.3% or 80 cents to $63.15 per barrel. Natural gas for the current month delivery was down 9% on the government report that the inventories are at fifteen year high. Natural gas traded 50 cents lower to $4.91 per mBTU.

Energy stocks declined on lower energy prices. Explorers, refiners and equipment makers stocks have been under pressure in last one month of trading and have lost between 15% and 30% in value. Refiners, Valero (VLO: chart) has lost 22% from its peak at $64 a month ago and Tesoro Petroleum (TSO: chart) has declined 24% from a peak of $72 in the same period. Integrated oil companies Exxon Mobil (XOM: chart) has lost 7% from its peak of $71, Conoco Phillips (COP: chart) has declined 15.4%, Chevron (CVX: chart) has edged 10.2% lower but Marathon Oil (MAR: chart) has jumped 7% in the last one month.

[R]12:30PM European markets closed in the red.[/R]
European markets finished in the red Thursday affected by losses on Wall Street due to a combination of economic data and downgrades of major blue-chip stocks. Positive earnings from retailers along with gains in the mining sector failed to improve market sentiment. Swiss luxury-goods group Richemont gained 2.1% after it said total sales for the five months ended in August rose 16%. Hermes International rose 3.3% on 7.8% profit growth. Home-improvement chain Kingfisher gained 2.3% after it said first-half total retail sales climbed 6.6% to 4.35 billion pounds. Higher metals prices helped resource stocks like Rio Tinto and BHP Billiton move higher. The German DAX 30 ended flat at 5,907, the French CAC 40 lost 0.3%, and London FTSE 100 declined 0.3% as well.

Oil prices declined along with natural gas prices which hit a two-year low after the Energy Department data showed U.S. inventories of natural gas rose more than expected. Light crude October delivery fell 43 cents to $63.54 a barrel. Natural gas futures slipped 40 cents to $5.04 per 1,000 cubic feet. The U.S. dollar was weak versus major currencies. The euro traded at $1.2727, up from $1.2692. The dollar bought 117.49 yen, down from 117.56. The British pound stood at $1.8892, up from $1.8763. European gold rebounded from recent weakness. In London the precious metal traded at $587.60, up from $587 per ounce. In Zurich gold traded at $590.35, up from $586.05. Silver closed unchanged at $11.09.

[R]11:30AM Stocks traded lower on inflation worries.[/R]
Market averages kept trading in the negative mood, hurt by price data which revived fear that the U.S. rate-tightening cycle is not over. While retail and housing stocks saw some early weakness, gains by utility stocks helped to limit the downside. The computer hardware and airline sectors also showed some strength. At the same time oil and gas stocks reversed from earlier gains as crude prices failed to hold their ground and U.S. reported that natural gas supplies fell to a two-year low. Crude oil futures for October delivery dropped 10 cents at $63.90 a barrel. October natural gas futures fell 22.9 cents, or 4.2%, to $5.22 per 1,000 cubic feet. Among the biggest movers in the oil group, Marathon Oil Corp. (MRO: chart) was leading the decliners, down 1.8% to $74.22 a share, while ConocoPhillips (COP: chart) was leading the few gainers in the oil group, up 0.2%.

After upbeat reports from Goldman Sachs (GS: chart) and Lehman Bros (LEH: chart) and a strong rally in the brokerage sector earlier in the week, Bear Stearns (BSC: chart) reported better-than-expected fiscal Q3 earnings and revenue, and continued the pattern of investment bank results exceeding forecasts. Bear Stearns was down 57 cents at $135.65. In late morning trading, the Dow Jones industrial average fell 19.69, or 0.17%. The Standard & Poor's 500 index fell 2.34, or 0.18% and the Nasdaq composite index slipped 0.74, or 0.03%. Bonds fell, with the yield on the benchmark 10-year Treasury note flat at 4.76% from late Wednesday.

[R]10:30AM The Sensex closes higher as large-caps in banking and IT stocks rally.[/R]
The Sensex on BSE finished 79.23 points, or 0.67% higher, at 11,973.02. The market-breadth, positive in the first half of the trading session, turned negative as selling pressure intensified in small-caps and mid-caps. For 1,116 shares that advanced, 1,380 declined and 72 shares were unchanged. From the Sensex stocks 18 advanced while 12 declined. The turnover on BSE was Rs 3,365 crore, much lower than Wednesday Rs 3,999 crore. The turnover on NSE was Rs 8,424.29 crore.

Market resurged and returned to near 12,000 level, after five months of trading.

Private sector banking large-cap, ICICI Bank soared 3.04% to Rs 650 on 4.97 lakh shares. Grasim advanced 2.83% to Rs 2,393, and Gujarat Ambuja Cements jumped 1.90% to Rs 115.20 were the other top advancers. Dr Reddy’s Labs gained 1.20% to Rs 746.15 on 4.24 lakh shares. The company is reportedly on the look-out for acquisition in Italy and Spain, and plans to expand into Europe.

The IT sector was in strong demand. Satyam Computers advanced 0.82% to Rs 808.80 on 7.22 lakh shares and Infosys Technologies Ltd gained 1.25 to Rs 1,831.85 after the domestic bank in Croatia, Hrvatska Postanska, selected company’s banking solution to drive its technology-led transformation initiative.

Index heavy Reliance Industries surged to a high of Rs 1,136.05, but retreated at close. It finished 0.7% higher, to Rs 1,124.15, on a volume of 12.62 lakh shares. Reliance Industries was the most-active stock on BSE with a turnover of Rs 142.45 crore, followed by Reliance Capital with Rs 137.14 crore.

Cement shares were in focus following reports that prices could go up between Rs 5 and Rs 10 per 50 kg bag, as demand soars after monsoon. Prism Cement gained 5% to Rs 39.90, ACC advanced 1.47% to Rs 945, Madras Cement rose 3.70% to Rs 3134.50, Birla Corporation moved up 11.35% to Rs 332.70, Mangalam Cement surged 5.92% to Rs 199.40, India Cements advanced 2.64% to Rs 208, JK Lakshmi Cement spurted 7.30% to Rs 15 and UltraTech Cement jumped 4.65% to Rs 821.

The banking sector led the advancers today. State-run banks surged. Corporation Bank jumped 5.27% to Rs 353.55, Bank of Baroda edged up 1.35% to Rs 266, Allahabad Bank rose 3.95% to Rs 79, Oriental Bank of Commerce gained 1.52% to Rs 223.20 and Indian Overseas Bank advanced 4.78% to Rs 103. Private sector banks also surged. Karur Vysya was up 6.31% to Rs 294, UTI Bank moved ahead 3.42%, to Rs 351, and Federal Bank advanced 5.58%, to Rs 211.75.

Decliners included Hero Honda which fell 1.755 to Rs 765.05, Bharti Airtel sank 1.145 to Rs 438, HDFC Bank was off 1.12% to Rs 864, Reliance Energy fell 1.06% to Rs 465.50 and Maruti shed 0.74% to Rs 948.90.

Reliance Communications Ltd, said on Thursday it had sought 3G spectrum from the government to test services and equipment. The company’s move comes after India allowed four major carriers, including Bharti Airtel Ltd, to conduct indoor trials of third-generation mobile services.

[R]9:45AM Stocks opened down on inflation worries and downgrades.[/R]
U.S. stocks started trading below the flat line Thursday, dragged by data showing unexpected inflation from imports as well as brokerage downgrades of blue chip industrial giants General Electric and Boeing. General Electric (GE: chart) was downgraded by UBS to neutral from buy, and had its price target cut to $38 from $40, on the belief that earnings will be negatively affected by the shape of the Treasury yield curve and higher tax rates. UBS also downgraded Boeing Co (BA: chart) , moving its rating to reduce from neutral, and its price target to $74 from $85, on concerns of economic slowdown.

Semiconductor, networking, and retail stocks posted notable losses. The losses by retail stocks declined although a report from the Commerce Department showed that retail prices increased unexpectedly in August. In the first hour of trading, the Dow Jones industrial average fell 34.98, or 0.30%. The Standard & Poor's 500 index fell 3.01, or 0.23% and the Nasdaq composite index slipped 6.26, or 0.28%.

[R]Initial jobless claims fell unexpectedly.[/R]
The Department of Labor released its report on initial jobless claims in the week ended September 9 on Thursday, showing that jobless claims fell unexpectedly. The report showed that jobless claims fell to 308,000 from the previous week's revised figure of 313,000. Economists had expected claims to increase to 315,000 compared to the 310,000 originally reported for the previous week. The Labor Department also said that the 4-week moving average fell to 314,250 from the previous week's revised average of 315,750. This marked the second consecutive decrease by the less-volatile moving average. The report also showed that continuing claims in the week ended September 2 rose to 2.499 million from the preceding week's revised level of 2.481 million.

[R]09:00AM Stock futures declined on economic data.[/R]
U.S. stock futures pointed lower Thursday morning, as a number of economic reports renewed concerns about the strength of U.S. economy and a rise in inflation. August retail sales rose a stronger-than-expected 0.2% in August as lower gasoline prices helped boost consumer spending. But this was down from a 1.4% rise in July, suggesting an economic slowdown. In another report, the Labor Department said U.S. jobless claims unexpectedly fell by 5,000 last week. August import prices rose by a greater-than-expected 0.8% in August, hinting at inflation pressures. Standard & Poor's 500 futures were down 1.3 points, below fair value. Dow Jones industrial average futures were down 13 points and Nasdaq 100 futures were down 0.25 point.

[R]Import and export prices increased.[/R]
The Department of Labor released its report on import and export prices in the month of August on Thursday, showing that both import and export prices continued to increase. The report showed that import prices rose 0.8 percent in August following an upwardly revised 1.0 percent increase in July. With the increase, import prices increased for the fifth consecutive month. The increase in imports was partly due to a notable increase in the prices of petroleum imports, which rose 2.3 percent in August after rising 5.1 percent in July. Excluding petroleum import prices, import prices rose by a more modest 0.5 percent. The Labor Department also said that exports prices rose by 0.4 percent for the second consecutive month. A 1.0 percent increase in the prices of agricultural exports contributed to the increase, although export prices still rose 0.4 percent excluding agricultural export prices.