[R]4:30PM Tobacco verdict and June same-store sales affected trading.[/R]

-S&P 500 gained 3.17 points, Dow advanced 73.48 and Nasdaq nudged up 1.75 points.
-Yield on 10-year bond closed at 5.19% and 30-year bond closed at 5.23%.
-Crude oil dropped 19 cents to close at $75 per barrel.
-Gold gained $6.60 per ounce to close at $636.30. Silver gained 17 cents to close at $11.59 and copper gained 21 cents to close at a new high of $3.62.

-Asian Markets closed lower led by more than 1% decline in Japan, Korea, India and Philippines. Hong Kong bucked the trend to close up 1.07%.

-European Markets closed higher led by near 1% gain in Spain, U.K., Germany and France. Norway gained 1.6%. South Africa rose 1.47% and Russia gained 2.3%.

-Latin American Markets closed higher led by 2.9% rise in Mexico.

Market averages for the most of the day traded higher but on a weak breadth. Florida verdict in tobacco case took Altria (MO: chart) 6% higher at close. The Florida Supreme Court upheld a lower court ruling and threw out a $145 billion, the largest punitive damages ever, saying the amount was “excessive as a matter of law.’’ Altria Group (MO: chart) parent of Philip Morris USA, Reynolds American (RAI: chart), a unit of Loews (LTR: chart), Ligget Group and Vector Group Limited (VGR: chart) were defendants in the case.

Amid growing concerns about the rise in gas prices over last year and climbing interest rates, June same-store sales reports by nearly half the retailers missed analyst estimates and fueled economists' pessimism for the second half of the year. Major retailers such as Wal-Mart and Gap released disappointing numbers, while a handful of mid-priced retailers, such as Target and J.C. Penney, kept on recording solid growth.

Among the companies which released disappointing results, Costco (COST: chart) reported same-store sales increase of 6%, vs. expectations of 6.9% gain, while Gap (GPS: chart) posted a 6% drop, worse than the 5.1% estimate. Home furnishings retailer Pier 1 (PIR: chart) posted a 18.4% drop, missing views for a decline of 14.1%. Teen retailers posted generally disappointing results, with Abercrombie & Fitch (ANF: chart) and Pacific Sunwear (PSUN: chart) posting declines, both worse than views. Bucking the trend, Bebe Stores (BEBE: chart) saw a 3.5% growth in line with estimates.

Results at department stores were mixed, with Nordstrom (JWN: chart) posting a 4.7% gain in same-stores sales, slightly below the 4.9% estimate, while Federated Department Stores Inc. had a 1.7% increase in same-store sales, below the 2.8% estimate. Limited (LTD: chart) reported a 3% rise in same-store sales, below the estimated 5.1%. But J.C. Penney Co. (JCP: chart) had a 4.3% gain in same-store sales in its department store business, better than the expected 2.8% increase. Ann Taylor (ANN: chart) posted a 12.5% growth in June same-store sales, surpassing the 6.1% estimate. At Children's Place (PLCE: chart), same-stores sales rose 14%, better than the 10.8% projected by Wall Street.

Mexican stocks got another shot in the arms when the official tally of last Sunday’s presidential election showed that after 99% of vote count Felipe Calderon had a slight lead over the candidate Lopez Obrador. Investors believe that Mr. Calderon’s policies will market friendly. Mr. Obrador suggested that he will mount a court challenge to the official election result.

A decision on Presidential election appears to be further than what market gains appear to predict. Market has rallied in the three of the last four trading days in the hope that the Presidential candidate will be selected soon and that Mr. Calderon will be elected as the next President of Mexico.

Constructions, home builders, cement and telecom companies participated in the market gain. American Movil (AMX: chart) gained 4%, Homex (HMX: chart) advanced 1% and Cemex (CX: chart) gained 3% in New York trading.

After months of volatility in the emerging markets, Brazil appears to have regained it footing. The Bovespa gained as high as 0.9% before settling at 0.4% gain. Steel companies such as Arcelor Brasil, Gerdau, Usiminas and mining companies CVRD traded higher. Telmar and Petrobras, daily leaders on the most active list, gained a fraction in trading.

[R]12:30PM European markets advanced on pharma and auto stocks.[/R]
European markets finished strong as the European Central Bank held its key rate at 2.75%, and the Bank of England left rates unchanged at 4.5%. A strong boost to the market was provided by gains for pharmaceutical companies like Shire which rose 3.1%. Automakers were also among the main market drivers, with Renault standing out as a top advancer. The German DAX 30 climbed 1.2%, the French CAC 40 rose 0.9%, and London FTSE 100 surged 1.1%.

Oil prices declined below $75 after a petroleum report showed a decline in crude oil inventories but an increase in gasoline stockpiles. Light crude August delivery lost 39 cents to $74.80 a barrel. Gasoline lost 2 cents to $2.257. Natural gas futures fell 9 cents to $5.67 per 1,000 cubic feet. London Brent dropped 30 cents to$73.68. The dollar traded lower versus major currencies. The euro traded at $1.2757, up from $1.2732. The dollar bought 115.11 yen, down from 115.71. The British pound stood at $1.8373, up from $1.8347. European gold prices advanced. In London the precious metal traded at $629.30, up from $620.30 per ounce. In Zurich gold traded at $628.60, up from $619.95. Silver closed at $11.42, up from $11.24.


[R]11:30AM Stocks traded higher on bargain hunting.[/R]
The major averages moved firmly in the positive territory with traders turning to bargain hunting after the sharp decline Wednesday. Stocks shot higher, lifted by sharp gains in shares of major tobacco companies, including Altria Group Inc. (MO: chart). Altria gained 7.6% to $78.88 after a favorable court ruling, strongly boosting both the Dow and the S&P 500 index.The health insurance sector advanced over the course of morning training, lifted by Humana (HUM: chart), up 2%. The Morgan Stanley Healthcare Payor Index rose 1.3%. Significant strength was visible in the gold sector, as the precious metal gained in value after some weakness recently. Airline stocks made a strong performance, supported by gains for ExpressJet (XJT: chart) and JetBlue (JBLU: chart) partly due to some weakness in the price of oil, which pulled back off the record high after a petroleum report showed a bigger-than-expected decline in crude oil inventories but an unexpected increase in gasoline inventories. At the same time, the price decrease contributed to some weakness in the oil service sector. The Philadelphia Oil Service Index dropped 0.9%. In late morning trading, the Dow Jones industrial average gained 97.01, or 0.87%. The Standard & Poor's 500 index was up 6.21, or 0.49%, and the Nasdaq composite index added 11.34, or 0.53%. Bonds gained ground, with the yield on the 10-year Treasury note down to 5.19% from 5.22% late Wednesday.

[R]Crude oil inventories extended recent decline.[/R]
Crude oil inventories declined during the most recent week, according to government statistics released Thursday. This added to a slide posted in the previous period. Meanwhile, gasoline inventories ticked higher, reversing part of the previous week's slide. The Department of Energy's Energy Information Administration said that crude oil inventories fell by 2.4 million barrels for the week ended June 30. Specifically, the measure slipped to 341.3 million barrels from the previous week's level of 343.7 million barrels. This followed a decline of 3.4 million barrels in the previous week. Oil inventories for the June 30 week were 3.6% higher than last year. Meanwhile, gasoline inventories showed a week-over-week advance of 700,000 barrels. This followed a decline of 1 million barrels in the previous week, which snapped a streak of gains. The level of gasoline inventories was 1.4% below last year. Distillate fuel oil had an inventory advance of 1 million barrels during the week. This built on a recent streak of gains, including an advance of 1.8 million barrels in the previous week.


[R]10:30AM Sensex in India slips 1.3% on profit taking.[/R]
The Sensex in India declined 151.67 points, or 1.3%, to close at 10,767.97. The stock trading on Bombay Stock Exchange was $600 million (or Rs 2,691 crore) lower than Wednesday’s $617 million (or Rs 2,775 crore). During the session, 955 shares advanced, 1,347 declined and 93 were unchanged.