[R]11:30AM Stocks lacked direction.[/R]
The U.S. stock markets turned to choppy trading Tuesday, with traders expressing some uncertainty about the outlook for the markets. Corporate news and oil prices are expected to be the main market drivers this week as little economic data are due out. Among the biggest gainers Tuesday were oil companies after the discovery of a major new oil source in the Gulf of Mexico by Chevron Corp. (CVX: chart).

One of the biggest decliners on the Nasdaq was Adolor Corp. (ADLR: chart), falling 46.22% on mixed study results for a bowel drug. Another notable tech loser was Redback Networks (RBAK: chart), down 15% on UBS downgrade. Elbit Medical Imaging (EMITF: chart) dropped 6.8% after reporting wider profit loss in Q2. Tractor Supply Co. (TSCO: chart) fell 5.46% following a brokerage downgrade of its stock. Medifast (MED: chart) stood out as one of he biggest decliners on the NYSE, down 16% on profit outlook. Sierra Health Services (SIE: chart) dropped 7.4% on stock downgrade by UBS. Holly Corp. (HOC: chart) lost 4%, while Frontier Oil (FTO: chart) dropped 6.12%.

In merger and acquisition news, Illinois Tool Works Inc. (ITW: chart), a maker of engineered parts for various industries, agreed to acquire Click Commerce Inc., a maker of supply chain management software, for $292 million. Illinois Tool Works offered to buy the outstanding shares of Click Commerce for $22.75 each, representing a 27% premium over Friday's closing price of $17.95 on the Nasdaq. In late morning trading, the Dow Jones industrial average fell 11.36, or 0.10%.The Standard & Poor's 500 index was down 0.71, or 0.05%, and the Nasdaq composite index fell 0.63, or 0.03%.


[R]10:30AM The Sensex ends lower in flat trading, metals, cement gain.[/R]
The Sensex on BSE declined 9.61 points (0.08%) to close at 11,904.60. The market-breadth was slightly negative as 1,229 shares advanced on BSE, 1,290 declined and 83 shares were unchanged. The market traded within a range of 100 points, between a low of 11,847.93 and a high of 11,945.53. The turnover on BSE was Rs 2,797 crore, compared to Monday’s Rs 2,879 crore. The turnover on NSE was Rs 5,753.64.

IT stocks and few auto shares declined on profit-taking. Auto component makers and construction shares were in focus. Metal stocks led the advancers in the latter part of the trading. Sterlite Industries surged 4.4% to Rs 452.50, Hindustan Zinc advanced 4% to Rs 592.30, Hindalco gained 2.9% to Rs 179.80, and National Aluminium Company edged up 1.8% to Rs 207.80. Oil exploration large-cap ONGC increased 1.1% to Rs 1,226 after London’s Brent crude oil rose above $68 a barrel.

Cement shares advanced too, on expectations of an increase in demand after the monsoon season. ACC rose 2.4% to Rs 942.25, Gujarat Ambuja Cements advanced 1.1% to Rs 115.55, Grasim gained 1.4% to Rs 2,310 and UltraTech Cement moved 2.3% higher to Rs 789. Reliance Communications gained 2.5%, to Rs 307.40, following introduction of an undersea cable on Tuesday, aimed at providing cheaper bandwidth to retail and commercial users.

Reliance Petroleum rose on a heavy volume. The stock advanced 3%, to Rs 67.55. Reliance Industries, though, slipped 0.7% to Rs 1,122.50. IT stocks also declined on profit-taking. TCS sank 1.4% to Rs 1,003, Wipro declined 1.4% to Rs 515, and Infosys edged down 0.8% to Rs 1,833. Auto shares, too, lost on profit-taking. Tata Motors shed 1.3% to Rs 885 and Maruti Udyog lost 1.3% to Rs 891.

United Western Bank surged 7% to Rs 17.35, on heavy volume, after the private sector bank forwarded a reconstruction scheme to RBI. A group of banks including ICICI Bank and state-run banks Canara Bank, Allahabad Bank and Andhra Bank submitted bid for the bank. Ashok Leyland advanced 1% to Rs 43.45 after the its sales in August jumped 37% to 6,483 from 4,737 units a year earlier.

UK-based oil explorer Cairn Energy Plc is planning for an initial public offering of its Indian operations in December but stated its biggest oil field would come onstream later than planned.


[R]09:45AM Stocks lost ground in early trading.[/R]
U.S. stocks lost direction at opening hours Tuesday as investors opted for profit taking after returning to work from a three-day break. Another retreat by the oil price and little other data helped stocks move lower.

Among companies in focus, Chevron (CVX: chart) added 1.1% after it announced the discovery of a major new oil source. Caterpillar (CAT: chart) shares rose 1.3% after the company said it would be raising machinery and engine prices from January 2007. Inco Ltd (N: chart) terminated its merger agreement with Phelps Dodge (PD: chart) and as part of the termination Inco paid Phelps Dodge $125 million and will pay another $350 million if it completes an alternative merger by Thursday. Shares of Phelps Dodge rose 3.3%. At the same time, shares of Viacom (VIA: chart) were off 4% as CEO and President Tom Freston is stepping down. Bristol-Myers Squibb (BMY: chart) fell 1.4% after the pharmaceutical company cut its earnings projection for this year. Procter & Gamble (PG: chart) stock fell 0.8% after the company affirmed its outlook for fiscal Q1 earnings and sales.

Disk drive stocks posted some early weakness, contributing to a 1.4% loss by the Amex Disk Drive Index. Some networking, internet, and biotechnology stocks also came under pressure in early trading, leading the tech-heavy Nasdaq notably lower. Meanwhile, gold stocks showed a strong upward move, benefiting from higher gold prices. In the first hour of trading, the Dow Jones industrial average fell 17.85, or 0.16%. The Standard & Poor''s 500 index was down 1.71, or 0.13%, and the Nasdaq composite index fell 3.96, or 0.18%.


[R]9:00AM Stock futures recovered on oil weakness.[/R]
U.S. equity futures recovered from earlier declines to move slightly higher Tuesday as another drop by crude-oil futures provided a boost to market sentiment. Crude-oil futures fell 65 cents to $68.54 a barrel following the Labor Day holiday, which usually marks the end of driving season.

There is very little data on the economic agenda Tuesday, with the highlight being the Organization of Economic Cooperation and Development keeping its forecast for U.S. economic growth in 2006 unchanged, at 3.6%.

In merger-and-acquisition deals, Co. Generale de Geophysiqueshot agreed to pay $3.1 billion in cash and stock for Veritas DGC. Verita’s shares rose 4.4% in pre-market trading. In other M&A activity, Click Commerce surged (CKCM: chart) jumped 26% to $22.51 in the pre-open after Illinois Tool Works (ITW: chart) said it was buying the Chicago on-demand supply management services company for $292 million, or $22.75 a share.

On the corporate news front, Viacom (VIA: chart) named insider Philippe P. Dauman, as president and CEO after Tom Freston resigned his positions with the company. Company''s shares gained 1.7% in pre-market trading. Phelps Dodge (PD: chart) said it was terminating its merger agreement with Inco LTD. As part of the termination, Inco paid Phelps Dodge $125 million, and will pay it an additional $350 million if it enters an alternative merger agreement before September. Aluminum giant Alcoa (AA: chart) lost 1.3% in Germany after a broker downgraded the stock, citing concerns over demand. S&P 500 futures gained 1.40 points to 1,314.00 and Nasdaq 100 futures added 3.50 points to 1,594.00. Dow industrial futures rose 6 points to 11,478.

Procter & Gamble Co, (PG: chart), consumer products company, reported its Q1 earnings and sales outlooks. The company continues to see earnings at 76 cents to 78 cents a share on sales growth of 23% to 27%. Analysts forecast earnings of 78 cents a share.