Overnight Developments

• Global stocks are mixed with the European Euro Stoxx 50 Index down -0.45% and Sep S&Ps down -7.30 points. US Stock futures retreated and led European shares lower after IBM and Texas Instruments reported revenue that missed analysts’ estimates. Treasuries and the dollar are higher as the drop in stocks prompts an increase in safe-haven demand. Spain sold 6 billion euros ($7.8 billion) of Treasury bills, the maximum target for the auction, which pushed down the borrowing costs due to the increase in demand. Spain, which has to repay 24.7 billion euros of debt this month, has the third-largest deficit in the Euro-Zone and many of its banks are dependent on the ECB for funds. Greece sold 1.95 billion euros ($2.53 billion) of 13-week Treasury bills with a bid-to-cover ratio of 3.85, higher than last week’s 3.64, which shows strong demand and indicates an increase in investor confidence towards Greek government debt. Hungary, however, raised less than planned in a debt sale for a fourth time since June, which sent its borrowing costs soaring to a 19-week high and reignited concern about the ability to tame its budget deficit as the economy slows.
• The Asian markets today closed mixed with Japan down -1.15%, Hong Kong +0.86%, China +2.20%, Taiwan +0.81%, Australia +1.04%, Singapore +0.11%, South Korea +0.23%, India -0.28%. China’s Shanghai Stock Index closed higher after the International Strategy & Investment Group said China would relax polices that were aimed at curbing its housing industry as the economy faces a bigger risk from a slowdown than inflation. At a briefing in Beijing, China’s Commerce Ministry said that China’s domestic consumption will become the most important element of the nation’s economic growth in the future and that domestic consumption in the second half of this year will continue to grow at a relatively fast pace. Japanese stocks fell, led by declines in semiconductor-related stocks, after Texas Instruments reported disappointing profit and sales, while automakers and electronics companies also closed lower fell on concern demand from the US may falter after US home-builder confide nce sank to a 16-month low.

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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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Daily S&P Report by Sean Lusk of PFGBest Stock futures turned in a small gain Friday as investors weighed a better than expected reading on consumer sentiment against a disappointing retail sales report. The Mini Dow Futures contract rallied 51 points for the day. That helped the Dow snap a three week losing streak, with the blue chip index finishing up 2.8 percent for the week. It also pulled the Dow out of correction territory, down more than ten percent from their April high.   Read the full story