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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It is Friday, and there is not much to report.  Lots of red appears on my watch list and and a sigh of frustration escapes my mouth.  Yesterday it was reported that the unemployment rate continues to remain at 9.5% with figures showing less improvement now than earlier in the year, hinting at a slowed recovery.   It would seem that each day a new figure is released that swings the market wildly one way or another, making investment decisions very difficult.

One day were climbing out of the recession, and the next, our economy is undoubtedly headed for a double dip.  This morning the market dropped drastically, regaining about half of its losses by lunch.  International markets continue their decline as confidence in the U.S. economic recovery lessens each day.  The FTSE, DAX, and the Nikkei  all closed low especially Japan, closing down 183 points.  It has also been reported that China has begun to offload our Treasury bills, selling off its stockpile by about 10%.  China will not need us if we continue on in this manner.  Even the Quants cannot get  a firm grip on Wall Street anymore.

In an article by the New York Times, the writer explains that 2008 and 2009 were both bad years for quant investment managers.  Quant funds have dropped from $1.2 trillion to $467 billion.  The writer goes on to say that the finance world is undergoing a technical arms race to Out Smart and out Trade Wall Street, so don’t feel bad even the rocket scientists are taking a hit.  The market remains to defy quant theory and remain anomalous, and it would appear that the golden years of the Quants, where Jim Simmons returned 39% a year, after fees between 2000 and 2007 are over.

Each day it would seem that the news grows more grim.  China is at our heels and our government continues to spend an exorbitant amount of money in an attempt to stimulate our economy.  It’s not working and we could be in a lot of trouble in the upcoming months.  Hopefully some positive news will be released next week to lift the spirit’s of U.S. investors but until then I think traders are just going to step away from their desk and take a long lunch.

For more information visit http://www.worldmarketmedia.com/779/section.aspx/2272/post/us-economy-continues-to-frustrate-investors

- About the Author: WorldMarketMedia.com (The Global Online Investment Community) is a high traffic stock market, news data website providing cutting edge new media products and services to publicly traded companies worldwide. Our Editor’s Desk authors insightful real-time coverage on the economy, the capital markets and their listed companies. Article Source

Overnight Developments

• European stocks are stronger with the European DJ Stoxx 50 up +0.37% and Sep S&Ps are up +7.00 points. The dollar index and Treasuries are weaker while most commodities are higher, even after German investor confidence dropped to a 16-month low. The Aug German ZEW economic sentiment survey fell a more-than-expected -7.2 to 14.0, its fourth straight decline and its lowest level in 16 months, which suggests a weaker growth outlook going forward. In the UK, July consumer prices rose +3.1% y/y, which is above the government’s 3.0% limit and forced BOE Governor King to write his third public letter this year to explain how he will bring prices under control. European stocks received a boost after Carlsberg, the biggest brewer in Russia, climbed 2.1% after it reported Q2 profit of 2.63 billion kroner, beating analysts’ estimates of 2.05 billion-kroner and after the company raised its full-year profit forecast due to the effect of a stronger ruble and an improvement in the Russian market. Weinerberger surged 7.2% after the world’s largest brickmaker reported Q2 net income of 20.6 million euros ($26 million), compared with a 151.5 million euro loss the year before after the company cut costs and the building material market began to recover.
• The Asian markets today closed mixed with Japan down -0.38%, Hong Kong +0.12%, China +0.69%, Taiwan -0.13%, Australia +0.87%, Singapore -0.35%, South Korea +0.64%, India -0.01%. Japanese bank stocks fell and helped to lead the overall market lower after Deutsche Bank downgraded the industry to "marketweight" from "overweight," citing "a lack of confidence that the strong Q1 performance will continue in subsequent quarters." A report from the Nikkei newspaper said that the Japanese government might extend the eco-point incentive program for purchases of energy-saving devices in an attempt to extend the economic recovery after Monday’s release of Japan Q2 GDP data showed the Japanese economy barely grew last quarter. The central banks of Australia and South Korea said the world economic outlook has become clouded, which may slow their pace of future interest rate increases. The minutes of the Aug 3 RBA policy meeting released today said th ere is "more uncertainty over the global outlook than there had been earlier in the year," while BOK Governor Kim Choong Soo said in a speech today that markets "may prove turbulent in the future."

Overnight U.S. Stock News

• Sep S&Ps this morning are up +7.00 points. The stock market yesterday erased early losses and finished the day mixed (Dow -0.01%, S&P 500 +0.01%, Nasdaq Composite +0.39%). The S&P 500, the Dow and the Nasdaq all fell to 3-week lows but recovered to finish mixed to higher. Bullish factors included (1) strength in raw materials and commodity producers after the dollar fell and boosted most commodities along Goldman Sachs’s reiteration of its "overweight" rating on commodities, and (2) the plunge in the yield on the 10-year T-note to a 17-month low of 2.57%, which should benefit consumers and businesses.
• Bearish factors included (1) carry-over weakness from a fall in Japanese and European stocks on concern the global economic recovery is faltering after Q2 Japan GDP came in weaker-than-expected (+0.4% annualized versus expectations of +2.3% annualized), (2) the weaker-than-expected Aug Empire manufacturing index (+2.0 to 7.1 versus expectations of +3.2 to 8.3), (3) a slump in homebuilders after the unexpected decline in the Aug NAHB housing market index to a 17-month low (-1 to 13 versus expectations of +1 to 15), and (4) the decline in most education stocks after data from the US Department of Education signaled that for-profit college aid may be imperiled because loan payback rates are insufficient.
• Potash Corp. of Saskatchewan (POT) surged 13% in pre-market trading after the world’s largest fertilizer producer rejected an unsolicited takeover proposal from BHP Billiton worth $130 a share in cash.

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Stocks Pulled back mid day around 2%, and few think about the fact that they have run 10% since bottom May 5th post Flash Crash.  The Fed news sent a few Global shivers to fan this broad based sell off.  I would look for a normal 5% correction in this move and we should see a few bargain hunters showing up somewhere across the normal retracement levels.

(Reuters) – Stocks dropped more than 2 percent on Wednesday as worse-than-expected Chinese factory data and a weaker outlook from the Federal Reserve added to worries about the economic recovery. The S&P 500 once again fell into negative territory for the year, with the S&P materials index (^GSPM – News) down more than 3 percent and an index of semiconductors (^SOXX – News) tumbling 4.3 percent.

A volatility index was up sharply, suggesting investors see further choppiness in the market. On Tuesday the Federal Reserve downgraded its outlook on the economy, and said it would begin funneling proceeds from maturing mortgage bonds it holds into longer-term government debt to keep borrowing costs low. The Fed’s assessment of the economy highlighted growth worries.

“Maybe the Fed made investors realize the economy is growing at an anemic pace at best,” said Alan Lancz, president, Alan B. Lancz & Associates Inc., an investment advisory firm, based in Toledo, Ohio. The Dow Jones industrial average (DJI:^DJI – News) was down 226.06 points, or 2.12 percent, at 10,418.19. The Standard & Poor’s 500 Index (^SPX – News) was down 28.53 points, or 2.54 percent, at 1,092.53, and was down 2 percent for the year. The Nasdaq Composite Index (Nasdaq:^IXIC – News) was down 65.74 points, or 2.89 percent, at 2,211.43.

China reported a slowdown in factory output, adding to the picture of softening domestic demand painted by other data a day earlier that showed a sharp drop in import growth. Among top decliners was Cisco Systems (NasdaqGS:CSCO – News), which is due to report earnings after the bell. The stock was down 2.8 percent to $23.64.

For more information visit http://www.worldmarketmedia.com/779/section.aspx/2221/post/market-slumps-into-mid-week

- About the Author: WorldMarketMedia.com (The Global Online Investment Community) is a high traffic stock market, news data website providing cutting edge new media products and services to publicly traded companies worldwide. Our Editor’s Desk authors insightful real-time coverage on the economy, the capital markets and their listed companies. Article Source

Shares of Industrial Services of America (Nasdaq: IDSA) hit a new 52-week high yesterday before closing up over 13% at $16.71 per share on very heavy volume. Shares took a while to respond to the company’s news last week raising guidance numbers for the upcoming release of second quarter results.

For the second quarter ending June 30, 2010, ISA expects earnings to be in the range of $0.33 to $0.38 per share on revenues in the range of $91 – $95 million. That compares with second quarter 2009 earnings of $0.17 per share on revenues of $39.1 million. Sales guidance for the quarter ending June 30, 2010 will exceed the high end of previous guidance. This was due to a stronger than expected final week of the quarter.

In a press release, Harry Kletter, CEO and founder of ISA states, “We have been very successful in our business expansion during the past two years and we will continue to look for new opportunities. While some economic indicators are suggesting a moderate slowdown in the economic recovery, we believe that the long term prognosis is still very promising.”

The recently announced specialty alloys division is now fully operational in its 150,000-square foot building which is on adjoining property to the stainless and non-ferrous operations.

ISA’s core business is buying, processing and marketing scrap metals and recyclable materials for domestic users and export markets. Additionally, ISA offers commercial, industrial and business customers a variety of programs and equipment to efficiently manage waste.

For more information on this visit http://www.worldmarketmedia.com/779/section.aspx/2096/post/industrial-services-of-american-nasdaq-idsa-hits-new-52-week-high-on-updated-guidance

- About the Author: WorldMarketMedia.com (The Global Online Investment Community) is a high traffic stock market, news data website providing cutting edge new media products and services to publicly traded companies worldwide. Our Editor’s Desk authors insightful real-time coverage on the economy, the capital markets and their listed companies. Article Source