Overnight Developments

• European stocks are higher with the European DJ Stoxx 50 up +0.86% and Dec S&Ps are up +9.40 points, both at 1-month highs. The dollar and Treasuries are weaker while most commodities rallied with crude oil at a 1-month high as a larger-than-expected increase in Aug China industrial production lifted mining stocks and raw material producers and boosted optimism in the global recovery. The European Commission raised its economic growth forecast for the Euro-Zone this year to 1.7% instead of a previously projected 0.9%, and said the economy may slow to a more "moderate" expansion in the second half. Bank stocks and the euro currency strengthened after the Basel Committee on Banking Supervision reached a compromise that more than doubles capital requirements for the world’s banks and gives them as long as 8 years to comply with the higher capital requirements intended to prevent future crisis. Credit Agricole jumped 6.7%, Societe Generale climbed 4.6% and Commerzbank advanced 2.0%. Deutsche Postbank AG slipped 6.8% after Deutsche Bank AG said it plans to raise at least 9.8 billion euros in its biggest-ever share sale to take over Postbank and meet stricter capital rules. Deutsche Bank expects to offer between 24 euros and 25 euros a share in cash to Postbank shareholders to increase its 29.95% stake in the lender.
• The Asian markets today closed higher with Japan up +0.89%, Hong Kong +1.89%, China +1.01%, Taiwan +2.55%, Australia +1.20%, Singapore +1.47%, South Korea +1.03%, India +2.17%. Strong economic data from China lifted Asian stocks and eased concern about a slowdown in the economic recovery. China’s Aug industrial production increased 13.9% y/y, more than market expectations of 13.0% y/y and Aug China retail sales rose +18.4% y/y. The PBOC reported Aug new loans of 545.2 billion yuan ($80 billion) and a 19.2% y/y increase in M2, the broadest measure of money supply. Both numbers were stronger than expected with the increase in M2 growth the first in 9 months. Aug China consumer prices rose 3.5% y/y, their biggest increase in 22 months due to a rise in food costs.

Today’s U.S. Earnings Reports

Earnings reports (confirmed releases, sorted by mkt cap) FUL-HB Fuller (BEST earnings consensus $0.45), LRN-K12 Inc. (-0.07), PCYC-Pharmacyclics (-0.07), PMFG-PMFG Inc. (0.10), MTRX-Matrix Service (0.10), VALV-Shengkai Innovations (0.16), GCOM-Globecomm Systems (0.17).

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Overnight Developments

• European stocks are higher with the European DJ Stoxx 50 up +0.59% and Sep S&Ps up +0.10 of a point, both at 2-week highs. The dollar is weaker while Treasuries and most commodities are little changed as the markets anxiously await the monthly US payrolls report. Speaking to reporters in Seoul today, ECB Council member Draghi said that while the economic recovery remains "fragile," it is becoming more broad-based. Draghi, who is also the governor of Italy’s central bank, said the ECB’s monetary stance would remain "accommodative." The euro strengthened after ECB Council member Wellink told Market News International that the yen’s appreciation against the euro is helping some Euro-Zone exporters. Yell Group Plc rose 6.2% as the publisher of the UK’s yellow pages directories rallied for a third straight day on takeover speculation, while Theolia SA plunged 9.4% after the French wind-power company reported a first-half net loss of 24.2 milli on euros, larger than the 14.1 million-euro loss a year earlier.
• The Asian markets today closed mostly higher with Japan up +0.57%, Hong Kong +0.49%, China -0.04%, Taiwan +1.42%, Australia +0.19%, Singapore +0.53%, South Korea +0.16%, India -0.09%. Asian stocks rose after US reports showed an unexpected increase in pending home sales and improved retail sales that eased concerns of an economic slowdown. Sony, the electronics maker that gets 22% of sales from the US, rose 2.4% and James Hardie Industries SE, the biggest seller of home siding in the US, climbed 2.1%. Technology stocks also advanced with Wintek Corp., a component maker for Apple’s iPads, surging 7% after saying its Aug revenue rose 17% m/m, while Chimei Innolux, Taiwan’s largest maker of liquid-crystal displays, closed 6.9% higher amid speculation that Q4 demand for consumer electronics will improves from the previous 3 months. Japan’s economy probably grew more than three times the government’s initial estimate of +0.4% annualized in Q2 after a Finance Ministry repo rt today showed Japan Q2 capital investment excluding software fell -1.5% y/y, its smallest decrease since 2007 as a result of strong overseas demand. Japan will release its revised Q2 GDP growth estimate on Sep 10.

Overnight U.S. Stock News

• Sep S&Ps this morning are up +0.10 of a point. The stock market yesterday finished on its high with modest gains (Dow +0.49%, S&P 500 +0.91%, Nasdaq Composite +1.06%). The S&P 500 and the Dow climbed to 2-week highs and the Nasdaq posted a 1-1/2 week high. Bullish factors included (1) carry-over strength from a boost to European equity markets after the ECB raised its 2010 GDP estimate for the Euro-Zone to between 1.4% and 1.8%, up from a previous forecast of between 0.7% and 1.3%, (2) comments from ECB President Trichet who said a double-dip recession in the Euro-Zone is "not in the cards," which boosts confidence in the global economic recovery, (3) the unexpected decrease in weekly US initial unemployment claims (-6,000 to 472,000 versus expectations of +2,000 to 475,000), (4) strength in homebuilders after the unexpected increase in Jul pending US home sales (+5.2% m/m versus expectations of -1.0% m/m), and (5) a rally in retailers after Aug ICSC chain store sales rose +3.2% y/y, their ninth straight monthly increase.
• Bearish factors included (1) the weaker-than-expected Jul factory orders (+0.1% versus expectations of +0.2%), (2) the prediction from the chief economist at FTN Financial who said that with "the rate of layoffs still uncomfortably high, there’s no reason to expect an acceleration in US consumer spending," and (3) the prediction from Edward Prescott, senior adviser to the Minneapolis Fed, that the US economy is likely to experience a period of stagnation until the country reduces its debt.
• Take-Two Interactive (TTWO) surged 13% in European trading after the video game publisher reported an unexpected Q3 profit of 28 cents a share and boosted its earnings outlook on sales of the newest release "Red Dead Redemption."
• H&R Block (HRB) climbed 3.8% in pre-market trading after it reported a fiscal Q1 loss of 36 cents a share, beating analysts’ estimates for a loss of 40 cents.

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Overnight Developments

• European stocks are slightly weaker with the European DJ Stoxx 50 down -0.36% and Sep S&Ps down -1.20 points. The dollar and Treasuries are little changed while copper rose to a 4-month high after the IMF raise its economic forecast for South Korea, the world’s fourth largest copper consumer. European and US stock prices are fluctuating on either side of unchanged ahead of the conclusion of today’s ECB’s monetary policy meeting in which policy makers are likely to extend emergency lending measures to banks into 2011. The French Q2 jobless rate unexpectedly slipped -0.2 to 9.7%, its first decline in 2 years as companies began hiring again. DSG International Plc rose 1.2% after the UK’s largest consumer-electronics retailer reported an increase in Q1 sales, boosted by the World Cup soccer tournament and the introduction of Apple’s iPad. On the negative side, Pernod Ricard SA slid 2.2% after it reported first-half profit of 951 million euros ($1.2 billion), bel ow analysts’ estimates of 987 million-euros, while Yara International ASA, the largest publicly traded maker of nitrogen fertilizer, dropped 3.2% after Morgan Stanley downgraded the shares to "equal weight" from "overweight."
• The Asian markets today closed higher with Japan up +1.52%, Hong Kong +1.19%, China +1.30%, Taiwan +0.69%, Australia +0.82%, singapore +0.13%, South Korea +0.54%, India +0.18%. Asian stocks rose after faster-than-estimated growth in US Aug manufacturing supported confidence in global economic growth. Japanese exporters rose as the yen weakened with Honda Motor up 1.9%, Nissan Motor up 3% and Sony up 2.2%. Chinese automakers advanced after China’s passenger-car sales grew 59% y/y in Aug, more than 3 times July’s pace, while Ping An Insurance, China’s second-largest insurer, gained 2.7% on plans to merge its bank unit with Shenzhen Development Bank after it said it will pay 29.1 billion yuan ($4.3 billion) for a stake that will give it control of Shenzhen. South Korean stocks rallied after the IMF raised its economic growth forecast for the country to 6.1% this year from 5.75% previously, and said the country still has room to raise its benchmark interest rate to a mor e neutral 4.0% from 2.25% currently. The Bank of Korea raised its benchmark rate 25 bp to 2.25% on July 9 as it joined Asian counterparts including India and Malaysia in removing monetary stimulus.

Overnight U.S. Stock News

• Sep S&Ps this morning are down -1.20 points. The stock market yesterday rallied sharply and closed on its high (Dow +2.54%, S&P 500 +2.95%, Nasdaq Composite +2.97%). The Nasdaq climbed to a 1-1/2 week high, while the S&P 500 and the Dow rallied to 1-week highs. Bullish factors included (1) carry-over strength from a rally in Asian and European stock markets which bolstered confidence in the global economic outlook after China’s manufacturing activity accelerated more than expected in August and Australia’s economy expanded in Q2 at its fastest pace in 3 years, (2) a rally in industrial stocks after the unexpected increase in the US Aug ISM manufacturing index (+0.8 to 56.3 versus expectations of -2.7 to 52.8), (3) strength in commodity and energy producers after a slide in the dollar and increased optimism that an expanding global economy will boost demand for raw materials lifted most commodity prices, and (4) gains in semiconductor makers after resea rch firm Gartner predicted chip sales will grow by +32% to $300 billion this year.
• Bearish factors included (1) the unexpected decline in jobs in the Aug ADP employment change (-10,000 versus expectations of +15,000), which fuels concern about Friday’s Aug nonfarm payroll report, (2) the larger-than-expected decline in July US construction spending which fell for the third straight month along with the downward revision to June construction spending (Jul -1.0% versus expectations of -0.5% and Jun revised down to -0.8% from +0.1%), and (3) comments from Dallas Fed President Fisher who said he is "reluctant" to expand the Fed’s balance sheet to stimulate the economy unless there are additional tax and regulatory policies in place to spur job growth.
• Collective Brands (PSS) sank 7.3% in pre-market trading after the company reported Q2 earnings of 32 cents a share, missing analysts’ estimates of 45 cents.
• Costco (COST) may be active to the upside today after the largest warehouse club chain in the US reported sales rose 9% to $5.9 billion in the four weeks that ended Aug 29 with comparable revenue increasing 7% during the period.

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Overnight Developments

• European stocks are weaker with the European DJ Stoxx 50 down -1.01% and Sep S&Ps down -4.20 points. The dollar and most commodities are lower while Treasuries and bunds are higher. European bank stocks are leading share prices lower with Raiffeisen International Bank Holding AG down 1.8% after the Austrian bank that operates in 17 former communist countries in eastern Europe reported Q2 net income of 71 million euros ($89.75 million), below analysts’ estimates of 99 million-euros. Eurobank Ergasias SA fell 3.1% as Greece’s second-largest lender said first-half profit fell after loan losses and taxes increased. Aug Euro-Zone inflation slowed to 1.6% y/y from 1.7% y/y in July, while the Aug Euro-Zone unemployment rate held at 10.0% for a fifth month, the highest in 12 years. In Germany, the number of people out of work declined -17,000 in Aug, its 14th consecutive month of declines, as the unemployment rate held steady at 7.6%. The German economy is leading Europe’s recovery as exports and investment surge, and may limit any slowdown in the Euro-Zone.
• The Asian markets today closed lower with Japan down -3.55%, Hong Kong -0.97%, China -0.41%, Taiwan -1.61%, Singapore -0.23%, South Korea -1.23%, India -0.34%. Asian stocks fell after slower-than-estimated growth in US personal income increased concern the economic recovery may falter. Japanese stocks tumbled despite an unexpected +0.3% m/m increase in Jul Japan industrial production and the larger-than-expected +0.7% m/m increase in Jul Japan retail sales. Stock prices in Japan remain under pressure on concern that the steps taken Monday by the BOJ and the government to halt the yen’s gain and boost economic growth will be insufficient. Q2 GDP in India expanded 8.8% annualized, its fastest pace in 2-1/2 years, which increases pressure on the Reserve Bank of India (RBI) to extend its recent string of interest rate hikes. The markets now expect another 25 bp rate hike by the RBI at its next meeting Sep 16 to cool inflation as India’s wholesale-price inflation has rem ained stubbornly around 10% since Jan.

Overnight U.S. Stock News

• Sep S&Ps this morning are down -4.20 points. The stock market yesterday opened lower and sold-off steadily the entire day and finished on its low (Dow -1.39%, S&P 500 -1.47%, Nasdaq Composite -1.56%). Bearish factors included (1) comments from the BOJ after its emergency meeting in which it expanded its bank loan program and said that "uncertainty" regarding the American economy is growing, (2) the weaker-than-expected Jul US personal income which fuels concern the economic rebound may slow further (+0.2% versus expectations of +0.3%), (3) the action by Morgan Stanley to cut its second-half GDP estimate for the US to between 2.0% and 2.5% from an earlier estimate of 3.0% to 3.5%, and (4) the action by Barclays Capital to reduce its year-end S&P 500 forecast to 1,120 from an earlier forecast of 1,220, saying "the market-implied probability of recession increases."
• Bullish factors included (1) carry-over strength from an early rally in European equities after Aug Euro-Zone economic confidence rose more-than-expected to its highest level in 2-1/2 years along with a rally in Asian shares after the BOJ expanded its bank-loan program, (2) the stronger-than-expected Jul US personal spending (+0.4% versus expectations of +0.3%), and (3) increased M&A activity after Sanofi-Aventis bid $18.5 billion for Genzyme, Intel agreed to buy Infineon Technologie’s wireless unit for $1.4 billion and 3M said it agreed to buy Cogent for $943 million.
• Ford Motor (F) slipped 2.1% in European trading on speculation that tomorrow’s US auto sales results will show that Aug sales this year were the slowest since 1982 as model-year closeout deals failed to entice customers.

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Overnight Developments

• European stocks are slightly higher with the European DJ Stoxx 50 up +0.09% and Sep S&Ps down -0.80 of a point. The dollar index is weaker and copper jumped to a 4-month high on speculation that central banks won’t allow the global economy to slide back into recession after the Bank of Japan (BOJ) expanded a bank-loan program and Fed Chairman Bernanke pledged last Friday to "do all that it can" to ensure a continuation of the economic recovery. European stocks also received a boost after Aug Euro-Zone economic confidence rose a more-than-expected +0.7 to 101.8, its highest level in 2-1/2 years, as a surge in exports help the Euro-Zone economy in Q2 to expand at its fastest pace in 4 years. An increase in M&A activity is another positive factor for stock prices today after Zodiac Aerospace jumped 13% after La Tribune reported that Safran SA is preparing another bid for Europe’s biggest maker of airplane seats, while Genzyme climbed 3.4% after Sano fi-Aventis SA offered to buy the world’s largest maker of medicines for genetic diseases for about $18.5 billion. On the negative side of M&A activity, Infineon Technologies AG, Europe’s second-largest semiconductor maker, slid 1.9% after Intel agreed to buy its wireless unit for about $1.4 billion, below the $1.9 billion Infineon was seeking.
• The Asian markets today closed higher with Japan up +1.76%, Hong Kong +0.68%, China +1.97%, Taiwan +0.24%, Australia +1.89%, Singapore +0.62%, South Korea +1.82%. India +0.19%. Japanese stocks rallied when the BOJ, at the conclusion of its emergency meeting in Tokyo, boosted its bank-loan program by 10 trillion yen ($118 billion) to 30 trillion yen as the yen’s surge to a 15-year high against the dollar threatens economic growth. The yen knee-jerked lower after the BOJ’s action, but soon strengthened on speculation the steps taken by the BOJ are insufficient to stem its strength. Even Prime Minister Kan’s announcement that the government will spend 920 billion yen ($10.8 billion) on economic stimulus and compile an extra budget if needed failed to stem the yen’s gains. Deutsche Bank AG recommends that investors sell Asian stocks before slowing earnings growth and a weakening global economy lead to further stock losses.

Overnight U.S. Stock News

• Sep S&Ps this morning are down -0.80. The stock market last Friday rebounded from an early drop to a 1-1/2 month low and finished sharply higher and on its high (Dow +1.65%, S&P 500 +1.66%, Nasdaq Composite +1.65%). Bullish factors included (1) the smaller-than-expected downward revision to Q2 US GDP (+1.6% annualized versus expectations of +1.4% annualized) as Q2 consumption was revised upward to +2.0% from +1.6%, and (2) comments from Fed Chairman Bernanke, which led a broad-based rally in raw materials and energy producers, when he said the Fed "will do all that it can" to ensure a continuation of the economic recovery and that the "preconditions" for growth in 2011 are "in place."
• Bearish factors included (1) the unexpected decline in the Aug US University of Michigan consumer confidence (-0.7 to 68.9 versus expectations of unchanged at 69.6), and (2) data from EPFR Global that said investors withdrew a net $7.1 billion from equity funds tracked worldwide in the week to Aug 25 and put $5.2 billion into bonds amid concern the economies in Europe and the US are losing momentum.
• Genzyme (GENZ) gained 3.8% in European trading after Sanofi-Aventis offered to buy the company for $18.5 billion in cash or $69 a share, taking its bid public after Genzyme refused to negotiate.

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Overnight Developments

• European stocks are weaker with the European Stoxx down -0.81% and Sep S&Ps down -2.90 points. The dollar and Treasuries are higher on increased safe-haven demand as stocks falter. European bank stocks are leading financial shares lower after Allied Irish Banks Plc, Ireland’s second-biggest bank, dropped 8.2% after its first-half loss widened as bad debts rose. Standard Chartered Plc fell 6.3% after Royal Bank of Scotland Group Plc cut its recommendation on the bank to "hold" from "buy," citing weakness in capital-market related sales and pre-impairment profit that missed forecasts. Next Plc slid 7.4% and led retailers lower after Britain’s second-largest clothing retailer said consumer spending will be "more restrained" in the second half. Limiting losses in European stocks was the 4.0% jump in Electricite de France SA after the French government said that electricity prices would rise 3.4% starting Aug 15. Demand for dollars continues to weaken after the 3-month dollar Libor rate fell for the 16th consecutive session to a 2-3/4 month low of 0.424%.
• The Asian markets today closed mixed with Japan down -2.11%, Hong Kong +0.43%, China +0.37%, Taiwan +0.19%, Australia -0.65%, Singapore -0.43%, South Korea -0.10%, India +0.57%. Asian stocks were undercut after weaker-than-expected US economic data on home sales and factory orders renewed concerns about the strength of the global economy. Japanese exporters were pressured as the yen rose to an 8-month high against the dollar, which threatens to hurt the value of overseas sales when converted to the local currency. Canon, the world’s biggest maker of digital cameras, fell 4.3%, and Sony, which gets 22% of its sales from the US, slipped 3%. Toyota Motor dropped 1.6% and Honda Motor fell 2.2% after the companies posted declines in US auto sales last month of 3.2% and 2.0% respectively. The yield on Japanese 10-year government bonds fell below 1.00% for the first time in 7 years on speculation the strengthening yen will increase deflationary pressures.

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Overnight Developments

• European stocks are weaker with the European Stoxx down -0.81% and Sep S&Ps down -2.90 points. The dollar and Treasuries are higher on increased safe-haven demand as stocks falter. European bank stocks are leading financial shares lower after Allied Irish Banks Plc, Ireland’s second-biggest bank, dropped 8.2% after its first-half loss widened as bad debts rose. Standard Chartered Plc fell 6.3% after Royal Bank of Scotland Group Plc cut its recommendation on the bank to "hold" from "buy," citing weakness in capital-market related sales and pre-impairment profit that missed forecasts. Next Plc slid 7.4% and led retailers lower after Britain’s second-largest clothing retailer said consumer spending will be "more restrained" in the second half. Limiting losses in European stocks was the 4.0% jump in Electricite de France SA after the French government said that electricity prices would rise 3.4% starting Aug 15. Demand for dollars continues to weaken after the 3-month dollar Libor rate fell for the 16th consecutive session to a 2-3/4 month low of 0.424%.
• The Asian markets today closed mixed with Japan down -2.11%, Hong Kong +0.43%, China +0.37%, Taiwan +0.19%, Australia -0.65%, Singapore -0.43%, South Korea -0.10%, India +0.57%. Asian stocks were undercut after weaker-than-expected US economic data on home sales and factory orders renewed concerns about the strength of the global economy. Japanese exporters were pressured as the yen rose to an 8-month high against the dollar, which threatens to hurt the value of overseas sales when converted to the local currency. Canon, the world’s biggest maker of digital cameras, fell 4.3%, and Sony, which gets 22% of its sales from the US, slipped 3%. Toyota Motor dropped 1.6% and Honda Motor fell 2.2% after the companies posted declines in US auto sales last month of 3.2% and 2.0% respectively. The yield on Japanese 10-year government bonds fell below 1.00% for the first time in 7 years on speculation the strengthening yen will increase deflationary pressures.

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Overnight Developments

• European stocks are higher with the European Stoxx 50 up 0.55% after hitting a 3-month high. Sep S&Ps are up 5.70 points (+0.52%). European stocks received support from positive earnings reports from AstraZeneca and Volkswagen and from positive confidence and employment reports. The European Commission’s business and consumer confidence index rose to a 2-1/3 year high of 101.3 from 99 in June. Meanwhile, Germany unemployment fell by 20,000 to 3.21 million, which was the lowest level in 1-1/2 years and was the 13th consecutive monthly decline. The Germany unemployment rate fell to 7.6% from 7.7%. French Finance Minister Christine Lagarde today said she expects a "serious pickup" in global growth in 2011, "if only because global trade has significantly improved." UBS upgraded European stocks to "neutral" from "underweight," cut U.S. stocks to "neutral," and cut Japanese stocks to "underweight."
• The Asian markets today closed mixed: Japan -0.59%, Hong Kong +0.01%, China +0.50%, Taiwan +0.18%, Australia -0.13%, Singapore +0.41%, South Korea -0.17%, Bombay +0.19%. Asian stocks were undercut by Wednesday’s U.S. Beige Book report, which suggested lackluster U.S. demand for Asian exports. Panasonic fell 7.7% today after news that the company would offer stock to help it purchase full control of its Sanyo Electric and Panasonic Electric Works units.

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Overnight Developments

• Global stocks are mixed with the European Euro Stoxx 50 Index up +0.45% and Sep S&Ps up +5.70 points. The euro and Treasuries are little changed despite the action by Moody’s Investors Service to downgrade Ireland’s credit rating one notch to Aa2 from Aa1, citing the government’s "gradual but significant loss of financial strength." European stocks and the euro also saw little reaction after the cost to insure debt payments from Hungary surged and the forint tumbled 2.6% against the euro when deficit-reduction talks with the IMF broke down. Credit-default swaps on Hungarian government debt jumped 45.5 bp to a 5-week high of 362 bp after the IMF and European Union declined to endorse Prime Minister Orban’s plans to control the budget deficit as part of a 20 billion-euro ($25.8 billion) emergency bailout because "a range of issues remain open." The EU said that Hungary’s government must make "tough decisions, notably on spending," to comply with deficit requirements. M&A activity boosted European stock prices after International power and GDF Suez climbed after GDF Suez, operator of Europe’s largest natural-gas network, said it’s in preliminary talks to combine some of its assets with International Power, creating an enlarged company majority-owned by GDF. Tomkins rallied 34% after Onex Corp., Canada’s biggest publicly traded buyout firm, and the Canada Pension Plan Investment Board signaled they might bid 2.9 billion pounds ($4.4 billion) for Tomkins.
• The Asian markets today closed mostly lower with Japan closed for holiday, Hong Kong down -0.79%, China +2.54%, Taiwan -0.19%, Australia -1.46%, Singapore -0.42%, South Korea -0.45%, India -0.15%. Asian stocks were undercut as concern deepened that the global economic recovery is faltering which may hurt exports and curb demand for Asian goods after US July University of Michigan consumer confidence tumbled to an 11-month low. The China Securities Journal said a report from the State Information Center said that China’s export growth might slow over the rest of the year to less than half the pace of the first six months. The report states that China’s exports between July-through-December may rise only +16.3% from a year earlier, slowing from the +35% y/y increase in the first half as the removal of tax rebates, weaker demand because of Europe’s debt crisis, and comparisons with higher base levels leads to smaller increases. Still, the report predicts that China’s ex ports for the full year of 2010 will climb 24.5% compared with a -16% decline in 2009.

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Overnight Developments

• Global stocks are mixed with the European Euro Stoxx 50 Index down -0.48% and Sep S&Ps up +1.80 points. US stock futures rose to a 2-week high after Intel, the world’s biggest chipmaker, reported better-than-expected earnings late yesterday and boosted its profit forecast for the year to a record. Intel’s rally led a surge in global technology stocks with STMicroelectronics NV and Infineon Technologies AG, Europe’s biggest chipmakers, climbing more than 2% and ASML Holding NV, Europe’s largest manufacturer of chip technology, advancing 5.6%. European stocks failed to hold their gains however after ICAP, the biggest broker of transactions between banks, dropped 5.3% after saying, "volumes slowed significantly in June as our customers’ and end investors’ risk appetites reduced." Also undercutting European stocks and the euro was the smaller than expected +0.9% m/m increase in May Euro-Zone industrial production which was forecast to increase +1.2% m/m along with a report from the Bank of Spain that showed Spanish lenders borrowed a record 126.3 billion euros ($161 billion) from the ECB in June as investors shunned the nation’s banks.
• The Asian markets today closed mostly higher with Japan up +2.71%, Hong Kong +0.64%, China +0.72%, Taiwan +1.54%, Australia +1.87%, Singapore +0.82%, South Korea +1.38%, India -0.27%. Intel’s earnings report boosted Asian technology stocks with Samsung Electronics, Asia’s biggest semiconductor maker, advancing 2.6% and Advantest, the world’s largest maker of chip-testing equipment, gaining 5.9%. Japanese stocks also received a boost after Komatsu Ltd., the world’s second-largest maker of construction equipment, gained 5.5% after raising its first-half net income forecast by 41% to 52 billion yen on rising demand from Asia and Latin America. Singapore raised its 2010 economic growth forecast saying its economy will grow between 13% and 15% this year after it reported that growth in the first half of this year accelerated to a record 18.1% pace as casinos spurred tourism. Fitch Ratings claims that Chinese bank lending in the first half was 28% higher than official numb ers suggest as more loans were repackaged into investment products, "distorting" credit data. Fitch said after adjusting for "informal securitization," new loans stood at about 5.9 trillion yuan ($871 billion) in the first six months, more than the PBOC’s data that show new loans of 4.6 trillion yuan.

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