U.S. AVERAGES

Market averages trade in the negative for the entire day as summer lull, weaker housing market, and elevated oil prices kept buyers from the market. Market is still nervous when it comes to oil. Higher oil prices kept markets in Europe, Japan and India lower. Indian market saw its first 2% correction in six months. Markets in Brazil were down on tomorrow’s testimony from finance minister related to corruption charges. Mexico and Argentina also traded lower.

In the U.S. investors focused on the housing data and awaited oil inventory report to be released tomorrow. After the release of slower housing sales, even though the data suggested third most active monthly sales, housing sector stocks sold off.

Stocks in semiconductor, mining, and select tech sectors closed lower. Financial stocks also declined.

Eli Lilly, Amylin Pharmaceuticals and Alkermes rallied Tuesday after recording rosy preliminary results of a Phase II study on a type-2 diabetes treatment.

Merck continued to dip, with shares down 1.3% on jury decision against the company in a lawsuit related to the painkiller Vioxx.

WFS Financial advanced 13%. The automobile-financing company, which has a market capitalization of $2.5 billion, is reported to be a matter of interest to Wachovia which is among the companies exploring a deal. Shares of Wachovia lost 14 cents to 50.90.

Boston Scientific has declined hitting a new 52-week low on news that it has received an FDA warning letter.

Plumtree Software added 12% as BEA Systems offered $200 million in cash to buy the company. BEA’s stock rose 8 cents to 8.97.

Lucent Technologies added 4.2% following an upgrade to ""overweight"" from ""neutral"" by Prudential Equity Group.

Lawn maker Toro Company, Pier 1 Imports and Burlington Coat Factory and Brown Shoe are few of the retailers trimming or missing the earnings guidance.

Toro stock has declined by more than 20% in the last three months from its peak on the lowered earnings guidance and revised sales forecast. Pier 1 Imports have faced declining customer traffic same-store traffic for the last eighteen months. Stock has declined 20% in one year.

Pier 1 Imports shed 5% after cutting its 2Q guidance on a continued drop in customer traffic.

CarMax gained 13% after boosting its 2Q forecast on a higher sales growth and competitive wholesale auction prices. The used-car retailer now sees earnings of 37 cents a share, above analysts' estimate for 31 cents.

La-Z-Boy Inc. lost 94 cents to $13.05 after 1Q sales declined vs. the year ago period and it cut its quarterly outlook.

Google is getting ready to launch its own instant-messaging system, according to reports. The system is said to be named Google Talk and may be released this Wednesday.

Williams-Sonoma's 2Q profit climbed 12% on growth at the company’s catalog and Internet business and higher same-store sales at Pottery Barn.

INTERNATIONAL MARKET NEWS

Japanese stocks extended their rally Tuesday, while most other Asian-Pacific markets ended lower. In Tokyo, the Nikkei 225 Stock Average ended up 20.42 points, or 0.2%, at 12472.93, after hitting an intra-day high of 12612.16 early in the afternoon session.

Around the region, the Hang Seng Index fell 1.6%, to 14973.89, after trading between 14938.05 and 15244.90. The Shanghai Composite Index ended down 0.8%, while Kospi lost 0.1% to 1115.84. The Weighted Price Index of the Taiwan Stock Exchange closed down 0.2%, at 6195.18.

European stocks ended lower Tuesday, dragged down by weaker U.S. shares, though the strong German ZEW economic-sentiment indicator gave some boost. The German DAX 30 closed down 0.5% at 4,917.74. Other major European indexes also closed weaker, with the French CAC 40 closing down 1.1% to 4,436.56 points and the British FTSE 100 index dropping 0.3% to 5,300.