[R]09:45AM Wall Street opened lower ahead of Fed’s rate decision.[/R]

Wall Street declined at opening Tuesday amid cautiousness ahead of the Fed Reserve's interest-rate decision and government reports which showed increased labor costs and lower-than-expected Q2 productivity. The Labor Department reported that productivity rose 1.8%, below the 2.1% gain expected by economists. Unit labor costs rose at an annual rate of 2.1%, vs. expectations of a 1.6% gain.

In corporate news, Wynn Resorts (WYNN: chart) surged 13.5% after it said its revenue more than doubled due to strength in Las Vegas and a new casino in Macau. On the side of the losers, Marsh & McLennan Cos. (MMC: chart) dropped 5.5% after the largest U.S. insurance brokerage posted a 3% increase in its Q2 profits amid growth in its risk and insurance business. The company also approved a $1.5 billion share- buyback plan.

Among stocks driven by analyst comments, Luminent Mortgage Capital (LUM: chart) plunged 31% after it was cut to sell from neutral by UBS. Bear Stearns Cos. (BSC: chart) was in focus again amid reports that its CEO has called Merrill Lynch (MER: chart) and Citigroup (C: chart) executives to reassure them about his company's financial health. The stock gained 1%.

In the first hour of trading, the Dow Jones industrial average was down 48.86, or 0.36%, at 13,419.92 after soaring 286 points Monday. The Dow was down more than 100 in the early going Tuesday. The Standard & Poor's 500 index fell 5.56, or 0.38%, to 1,462.11, and the Nasdaq composite index rose 7.14, or 0.28%, to 2,540.19. The yield on the benchmark 10-year Treasury note rose to 4.75% from 4.74% late Monday.


[R]09:00AM U.S. stock futures indicated a flat start ahead of Fed’s decision.[/R]

U.S. stock futures traded near the flat line Tuesday, following a strong rally the previous session when the Dow hit a 4-year high of 286 points as investors bought financial stocks that suffered weakness in earlier hours amid worries over credit markets. Traders were cautious in pre-market hours, awaiting a Federal Reserve decision on interest rates and its view on risk after the recent troubles in credit markets.

Casino stocks were in the spotlight, with shares of Wynn Resorts (WYNN: chart) climbing 9.7% after the casino operator said its Q2 revenue more than doubled due to strength in Las Vegas and a new casino in Macau. Rival Harrah''s Entertainment Inc. (HET: chart) added 1% in pre-market trading after it posted 85% profit jump in Q2, due to a strong performance in Las Vegas.

Among companies posting disappointing results, Tyco International (TYC: chart) reported a $3.55 billion net loss for the third quarter, due to $3.3 billion in charges. Underlying earnings beat expectations of 55 cents a share. Duke Energy (DUK: chart) reported a 17% drop in Q2 net profit, but beat estimates.

In economic news, productivity in the total manufacturing sector grew 1.6% in Q2, as output rose 3.5% and hours increased 1.8%. S&P 500 futures slipped 1.3 points at 1,466.40 and Nasdaq 100 futures lost 2.5 points at 1,960.00. Dow industrial futures gave up 9 points.


[R]8:30AM New York, 9:30PM Tokyo – Asian markets make a feeble attempt to climb. Japan lost most of the day’s gain at the close.[/R]

Asian markets closed lower but select emerging markets managed to close higher. Philippines led the region with a gain of 2.8% followed by 1.1% rise in Australia and fractional gains in India, Japan, and Korea. Taiwan with a loss of 0.9% led the decliners in the region followed by 0.7% in Indonesia, followed by fractional losses in Thailand, Singapore, and Hong Kong. The Shanghai Composite gained 0.5% bucking the regional trend of lower markets for the last one week.

In Hong Kong trading insurance companies fell. China Life and Ping An lost nearly 0.7% dragged by weakness in financial and banking sector across the region. The regional commercial property developer Hong Kong Land reported first half profit increase of 32% to $155 million. The commercial property vacancy rates fell to 3% in Hong Kong but residential market remained relatively soft. The company is enjoying a rising demand from financial services segment. When counting the property valuations gain the profit in the first half jumped to $1.2 billion from $924 million a year ago. Diluted earnings per share jumped to 50.49 cents from 39.92 cents.

Indonesia Central Bank left the key interest rate unchanged to 8.25% meeting the expectations of the most economists. Food and energy prices have been stubbornly high and continue to rise. In July the prices gained 6.1% after rising 5.8% in June. The bank is targeting inflation between 5% and 7%. Rising prices of palm oil and crude oil have forced the government to reduce exports of palm oil. Indonesian currency rupiah edged a fraction lower at close to 9,316 to a dollar.

In Sydney trading Macquarie Bank recovered with a gain of 6.4% after falling more than 15% in the first week of this month. Novo Energy jumped 8% after a takeover offer from Toro Energy valuing the company at A$276 million. Primary Healthcare and Hills Industry edged up a fraction after reporting earnings. Australian Agriculture fell 7% after reporting first half profit decline of 31%. Casino operator, Publishing & Broadcasting jumped 4% and Austar United fell 2% on broker rating revisions.


[R]8:00AM Harrah’s Entertainment Q2 profit jumped 85%.[/R]

Harrah''s Entertainment Inc. (HET: chart) posted 85% earnings jump in Q2 to $237.5 million, or $1.25 per share, vs. $128.6 million, or 69 cents per share a year ago, boosted by strong results in Las Vegas and Atlantic City. Quarterly results beat analyst estimates of 98 cents per share.