[R]4:15PM Market averages decline on rate worries.[/R]

-Dow closed down 60.35 points, Nasdaq lost 18.21 and S&P 500 declined 6.60.
-Yield on 10-year bond closed at 5.19% and 30-year bond closed at 5.23%
-Crude oil gained 52 cents to close at $70.85 per barrel.
-Gold declined $5.60 to $585.40 per ounce.

-Asian markets closed higher in overnight trading. Japan closed up 3.4% and Taiwan rose 2.95%. India advanced 2.4%.
-European markets closed higher across the region led by a 0.8% rise in Spain and Switzerland. Germany and France closed up 0.6%.
-Latin American markets closed lower led by a decline of 0.7% in Brazil.

Market averages were under pressure for the most of the trading session. Nasdaq declined close to 1% and Dow and S&P500 lost near 0.5%. Rate worries and economic slow down kept investors selling stocks. Index of Leading Economic Indicators declined 0.6% in May more than 0.5% estimated by economists. The Labor Department reported that jobless claims rose 11,000 to 308,000 at the end of the last week.

The airline stocks came under selling pressure in the early trading on the news that the UK and U.S. regulators are investigating British Airways for ticket prices and fuel surcharges along with several carriers. British Airways (BAB: chart) fell $4.09 to close at $63.70 in New York trading.

Federated Department Stores (FD: chart) reported that it has agreed to sell Lord & Taylor retail chain for $1.2 billion cash to real estate partnership NRDC Equity Partners. LLC. The company sale includes 48 stores and central distribution center.

Bed Bath & Beyond (BBBY: chart) closed down $2.21 to close at $34.71 on broker downgrade. The company reported second quarter earnings of 35 cents vs. 33 cents a year ago on revenue rise of 10% to $1.4 billion. The company same-store sales rose 4.4%. The company forecasted fiscal year earnings of $2.17, two cents lower than analysts’ estimates.

[R]12:30PM European markets finished higher.[/R]
European markets closed in the positive, although British Airways overshadowed the positive trading sentiment. The company closed down 5.9% after the carrier disclosed that the U.K. Office of Fair Trading and the U.S. Justice Department are looking into the carrier and other airlines over pricing and fuel surcharges. European stocks were largely supported by defensive stocks, but finished off session highs as U.S. markets reversed from yesterday’s rally. The German DAX 30 rose 0.55%, the French CAC 40 gained 0.6%, and London FTSE 100 rose 0.3%.

Oil prices advanced for a second day in a row after a weekly petroleum report showed that gasoline inventories rose less than expected. Light crude July delivery rose 64 cents to $70.97 a barrel. Heating oil added 1 cent to $1.9504 a gallon. Gasoline futures rose 1.6 cents to $2.0820 a gallon. Natural gas futures were steady at $6.590 per 1,000 cubic feet. The dollar gained ground versus major currencies. The euro traded at $1.2632, down from $1.2659. The dollar bought 115.16 yen, up from 114.79. The British pound stood at $1.8389, down from $1.8439. European gold prices moved higher. In London the precious metal traded at $594.40, up from $574.90 per ounce. In Zurich gold traded at $593.15, up from $5674.80. Silver closed at $10.56, up from $10.22.


[R]11:30AM Stocks traded lower on profit taking.[/R]
Stock markets posted weakness Thursday morning, contributed by profit taking. Telecommunications stocks showed considerable weakness. Qualcomm (QCOM: chart) posted a significant loss, falling 4.2% after Nokia (NOK: chart) said it plans to ramp down its CDMA manufacturing by April 2007. Qualcomm holds most patents to the CDMA technology. Other chipmakers also came under pressure, contributing to a 1.3% loss by the Philadelphia Semiconductor Index. Maxim (MXIM: chart), National Semiconductor (NSM: chart) and Freescale Semiconductorare moved notably down. The networking sector declined, dragged by Foundry Networks (FDRY: chart) and 3Com (COMS: chart), sending the Amex Networking Index down 1.3%. Some internet stocks moved steeply lower, with shares of RealNetworks (RNWK: chart) down 8.1% after Goldman Sachs downgraded its rating on the company's stock to Underperform from In-Line. Among individual stocks, Phoenix Technologies (PTEC: chart), software company, tumbled 29% after the company significantly cut its Q3 revenue guidance. In corporate news, Rite Aid sank 6% after the drugstore operator said its Q1 profit fell. In late morning trading, the Dow Jones industrial average fell 22.57, or 0.2%. The Standard & Poor's 500 index was down 4.12, or 0.33%, and the Nasdaq composite index lost 13.09, or 0.61%. Bond yields remained inverted as prices fell. The yield on the 10-year Treasury note edged up to 5.19% from 5.16% late Wednesday, while the 2-year yield steadied at 5.22%.


[R]10:30AM India gains on upbeat global markets.[/R]
The Sensex in India advanced 235.74 points, or 2.3%, to close at 10,275.88. The benchmark reached its high of 10,362.74 in intra-day, but then it lost 127.90 points to decline to 10,234.84 in the evening trading. The turnover on BSE was $723 million or Rs 3,254 crore, up from Wednesday’s $628 million or Rs 2,826 crore. The market-breadth was positive as 1,996 stocks advanced, 482 declined and 33 shares remained unchanged. Gainers included HDFC soaring nearly 10% to Rs 1,118 on bargain-hunting and on reports that the demand for housing loans is still strong. Engineering & construction large-cap L&T advanced nearly 8% to Rs 2,190. Metal shares jumped on recovery in metal prices on LME. Hindustan Zinc advanced 9.6% to Rs 595 on 2.5 million shares. Hindalco advanced 4.4% to Rs 170 on a heavy volume of 3.7 million shares. Sterlite Industries added 2.4% to Rs 383 and Nalco advanced 5% to Rs 235.70. However, the stock ended well-off from its high.

Bank shares also joined the advancers mostly on renewed buying. State Bank of India advanced 4.4% to Rs 773, ICICI Bank gained 3.8% to Rs 513.65 and HDFC Bank rose 2.7% to Rs 727.90. Oil exploration large-cap ONGC surged nearly 4% to Rs 1,066 due to crude oil price rise to about $70.50 per barrel. Dolphin Offshore gained 10% to Rs 240.20 on reports that it is close to acquiring Mumbai-based, privately-owned shipping company, Procyon Offshore Services. Gujarat State Petronet rose 2% to Rs 32.15 after the company reported robust fiscal 2006 results. Mahindra & Mahindra soared 7% to Rs 580 on reports that it plans to build a factory in Tamil Nadu. The plant is likely to make multi-utility vehicle, Ingenio, which is expected to be launched in 2008.

IT stocks were in demand. Wipro advanced 2.2% to Rs 447, Satyam Computer gained 2.3% to Rs 680, TCS advanced 1.8% to Rs 1,672 and Infosys rose 0.6% to Rs 2,935. Reliance Capital surged 10% to Rs 515. The stock advanced on high volume of 4.8 million shares. Infomedia India advanced 20%, to Rs 194.25 on plans to buy-back its shares at Rs 245 per share. Infomedia intends to buy-back 14% of its equity from shareholders holding less than 50 shares. VisualSoft Technologies soared 12% to Rs 83 on reports in a section of the media that Megasoft, with development centers in Chennai and Hyderabad, is likely to acquire the company.

Among the decliners were Dr Reddy’s Lab dipping 6.7% to Rs 1,257. Ciba Specialty Chemicals also plunged 15% to Rs 295 after the company posted a sharp fall in Q4 March 2006 net profit, which declined to Rs 3.20 crore from Rs 7.90 crore in Q4 March 2005.


[R]9:45AM Stocks opened in the negative.[/R]
Stocks started below the flat line Thursday, reflecting cautiousness ahead of Fed Reserve meeting and higher oil prices. A slight rise in weekly unemployment claims drew little reaction from investors. The Labor Department said the number of jobless claims filed grew by 11,000 to 308,000 last week, just beating economists' estimate of 305,000. The airline sector dropped on news that British and U.S. regulators are probing several carriers over ticket prices and fuel surcharges. British Airways PLC fell $4.51 to $63.28, and United Airlines parent UAL Corp. lost 38 cents to $31.87. Bed Bath & Beyond Inc. dropped $2.09 to $34.83 after the home retailer issued a weak full-year earnings outlook. In the first hour of trading, the Dow Jones industrial average fell 26.24, or 0.24%. The Standard & Poor's 500 index was down 3.48, or 0.28%, and the Nasdaq composite index lost 6.62, or 0.31%. Bond yields remained inverted as prices fell. The yield on the 10-year Treasury note edged up to 5.17% from 5.16% late Wednesday, while the 2-year yield steadied at 5.2%.


[R]9:00AM Stock futures pointed to a roughly flat opening.[/R]
Stock futures indicated flat to higher opening Thursday, with trading expected to be lackluster due to the lack of significant news and traders looking ahead to next week's Federal Reserve meeting. Economic data may attract some attention, as the Labor Department released its report on initial jobless claims, which showed that jobless claims rose a little more than economists had expected. In corporate news, shares of Allianz (AZ: chart) are expected to see trading activity as the insurer said it is planning to cut 7,480 jobs due to the restructuring and modernization of its Dresdner Bank AG and Allianz Deutschland AG. Family Dollar (FDO: chart) gained 2.4% in pre-market trading after the company reported better-than-expected Q3 earnings and raised its full year earnings forecast.