The world's largest retailer Wal-Mart Stores Inc said net income from continuing operations rose 9% to $3.39B, beating analysts’ expectations and second-quarter sales rose 10% to $101.6B. The discount retailer, however, gave cautious guidance for the current quarter.

Skechers USA Inc. made an unsolicited offer to buy Heelys Inc for $142.8M after an earlier proposal was rejected.

American Airlines and British Airlines, after years of speculation, have finally signed a joint-venture along with Iberia to fully cooperate on routes and ticket prices, pending regulatory approval.

All three of the major indices continue to sport healthy gains. The Nasdaq is boasting the strongest performance. It is also the only index currently touting a week-to-date gain.
The energy sector has pared its losses. The sector was down 2.5% at its low, but is now trading near its best level of the afternoon with a loss of 0.9%.
The defensive-oriented utility sector remains out of favor this session. The sector is down 1.0% Thursday and 1.4% week-to-date. Meanwhile, the Dow Jones Utility Average is down 9.7% since the start of July.

Holds Y162.60 area after revisiting overnight lows near Y162.50 but "there was no rush for the exits" down there, a trader says, and the pair is consolidating here. Chatter earlier had pegged bids in place at Y162.65/50 area with stops below, presumably to residual demand remains ahead of the still present stop-interest. Further bids Y162.00.

Holds tough around $1.8680 area despite the dump lower in euro-dollar, euro-sterling as a result skidded to fresh lows for the day near stg0.7915 area. Bids in place at $1.8650.

Stocks have moved another step higher, but are currently trading off their session highs. Each of the major indices are trading with attractive gains. The Dow continues to lead the way.
Large-cap tech has shown notable strength. The Nasdaq 100 is up 1.2%, thanks to Research In Motion (+3.47) and Qualcomm (+0.93). Google (+5.67) is also providing support.
The techonology sector is the largest in the S&P 500. The sector is currently up 1% this session.

The euro dropped to a 5 1/2-month low against the dollar after crude oil fell and a report showed Europe's economy contracted for the first time since the 15- nation currency was introduced almost a decade ago.

It's all about oil, traders say, citing the $2.70 slide in that commodity after earlier gains. Gold also lower. Euro stops extend to $1.4780 Feb 26 base. Techs remind of support at $1.4763/69 76.4% of the 2008 range.

Stocks slipped Thursday morning on worries about the consumer spending outlook following a jump in a key inflation index and a mixed earnings forecast from Wal-Mart Stores.
Stocks had tumbled Tuesday and Wednesday on a mix of higher oil prices and more financial market malaise. Thursday morning brought some more modest selling.
The July Consumer Price Index jumped 5.6% versus a year ago, topping analysts' estimates and touching a 17-year high. CPI also jumped 0.8% vs. June levels, double analysts' forecasts, as inflationary pressures continued to amp up.
The so-called "core" CPI, which strips out volatile food and energy prices, rose 2.5% versus a year ago and 0.3% vs. June. Both numbers were above what economists were expecting.
The number of Americans filing new claims for unemployment dropped last week from 6-year highs the week before. However, the decline was smaller than what economists were expecting.
The world's largest retailer Wal-Mart reported higher quarterly earnings and sales, thanks to the government stimulus checks and shoppers' need to find deals amid the sluggish economy. Earnings topped estimates, while sales missed forecasts.
But with the stimulus-check impact petering out, Wal-Mart forecast that current-quarter earnings could miss analysts' estimates. The company also forecast full-year earnings in a range that sets the midpoint below analysts' forecasts. Wal-Mart fell 1% in the early going.
U.S. light crude oil for September delivery fell $2.53 to $113.85 a barrel on the New York Mercantile Exchange, erasing early gains.
Prices had risen Wednesday and in early electronic trading Thursday morning after the government's weekly inventory report showed weakness in oil and gasoline supplies.
In the bond market, Treasury prices rose, lowering the yield on the benchmark 10-year note to 3.91% from 3.93% late Wednesday.
COMEX gold for October delivery fell $6.60 to $821 an ounce.

Extends pullback, breaks under support at $1.8720 to currently trade around $1.8710. Bids seen placed to $1.8680, with stronger interest noted on approach to $1.8650.

"The rise in import prices and the combination of high headline and core CPI increases will certainly aggravate existing inflation worries at the Fed."

"Global economic growth is slowing. Reason is the purchasing power shock from high commodities prices augmented by local factors such as credit crunch."

The S&P 500 has recently joined the Nasdaq and Dow Jones Industrial Average in the green. The sentiment has picked up in early action, thanks to a strong lift by the financial sector.
Financials are the second largest sector in the S&P 500, representing almost 15% of its weighting behind technology (unch.). Financials are currently up 2.1%. All of the financial sector's industy components are moving higher.

From GS; "WTI Crude futures have held and recovered from above major support at $110/111.A close back above $120 would improve the technical view for $132 initially."

GBP/JPY printed highs on Y206.00 and sharply retreated to current Y205.05. Demand noted toward Y204.40 with stops below, which if triggered seen opening a deeper move toward Y204.10/00. Offers remain in place between Y205.85/00.

EUR/USD: $1.4930, $1.4835
USD/JPY: Y110.00, Y109.20, Y108.00, Y107.90
GBP/USD: $1.8700
EUR/JPY: Y164.85
AUS/USD: $0.8750, $0.8755
USD/CAD: C$1.0810

Stocks futures turned lower Thursday as a sharp increase in consumer inflation outweighed a big earnings report by the retail giant Wal-Mart.
Stocks have slumped for the past two sessions, weighed by credit fears and concerns about the weakening economy.

Before the bell reports showed consumer prices surged more than expect during the month of July. The index, a key measure of inflation, rose 0.8% in July, more than twice what economists were anticipating, versus a 1.1% gain the previous month. The so-called core CPI, which excludes the volatile food and energy prices, increased 0.3% in July on a monthly basis. Analysts had expected an increase of 0.2%. The annual rate climbed to 5.6%, hitting its highest level since 1991.
In other economic news, jobless claims slipped to 450,000 in the most recent week.
Corporate news: Wal-Mart, the world's largest retailer, reported a 17% jump in second-quarter profit which beat earnings predictions. The company reported a profit of $3.4 billion, or 87 cents a share. Analysts polled by Thomson Reuters expected profit of 84 cents a share. Revenue rose 10% to $101.6 billion, a shade below Wall Street's estimates. The company also boosted its full-year earnings forecast to between $3.43 and $3.50 a share.
In other company news, Barnes & Noble Inc. would probably not attempt to acquire rival Borders Group Inc., according to a Wall Street Journal report.
Oil: Crude futures, which jumped about $3 the previous session. Oil prices were supported by a U.S. government inventory report Wednesday that showed a bigger-than-expected drop in gas supplies.
U.S. crude for September delivery eased 30 cents to $115.70 a barrel.

USD/JPY declines to current Y109.35/40 after printing earlier highs on Y109.70/80. Offers remains near the highs with stronger – on Y110.00. Bids at Y109.00.

EUR/USD dipped to just below $1.4900 area before recovering above the figure to $1.4950. Offers noted to 50 mostly absorbed. More supply $1.4980/00. Euro last at $1.4935.

The following data were issued
06:00GermanyCPI (July) final 0.6% 0.6% 0.6%
06:00GermanyCPI (July) final Y/Y 3.3% 3.3% 3.3%
06:00GermanyHICP (July) final Y/Y 3.5% 3.4% 3.4%
06:00GermanyGDP (Q2) flash -0.5% -0.7% 1.3 (1.5)%
06:00GermanyGDP (Q2) flash Y/Y adjusted 1.7% 1.7% 2.6%
06:00GermanyGDP (Q2) flash Y/Y unadjusted 3.1% - 1.8%
06:45FranceGDP (Q2) preliminary -0.3% 0.2% 0.4 (0.5)%
06:45FranceGDP (Q2) preliminary Y/Y 1.1% 1.7% 2.0%
09:00EU(15)Harmonized CPI (July) final -0.2% -0.1% 0.4%
09:00EU(15)Harmonized CPI (July) final Y/Y 4.0% 4.1% 4.0%
09:00EU(15)Harmonized CPI ex EFAT (July) Y/Y 1.7% - 1.8%
09:00EU(15)GDP (Q2) flash -0.2% -0.2% 0.7%
09:00EU(15)GDP (Q2) flash Y/Y 1.5% 1.5% 2.2%

The euro traded near a 5 1/2-month low against the dollar after a report showed Europe's economy contracted for the first time since the single currency was introduced almost a decade ago.
The European currency also declined against the British pound on concern the second-quarter data will prompt traders to cut bets on higher interest rates in the 15 countries that share the euro.
Europe's economy shrank 0.2% in the second quarter, after growing 0.7% in the first, the European Union's statistics office said from Luxembourg.
Official figures on Thursday showed that the French economy contracted by 0.3% in the second quarter, compared with predictions of 0.2% expansion.
Germany, the euro zone's economic powerhouse, shrank by 0.5%, not quite as much as the 0.8% contraction analysts had expected.
The dollar surged 4.6% against Europe's common currency this month, enough to prompt Bank of America Corp. to tell its customers to exit trades betting on more gains. Morgan Stanley still forecasts the greenback will approach a record low by October as the housing slump and credit market losses keep the Federal Reserve from raising interest rates this year.

EUR/USD opened in early Europe around $1.4868. Rate rose above $1.4900, pivoting around this level, extending highs to $1.4935. Bids $1.4885/75, $1.4850/40. Offers $1.4935-40/50.

GBP/USD opened early Europe at $1.8662. Continued demand into early Europe lifted it to $1.8719 and later – to $1.8772. Cable bids $1.8680, $1.8650, $1.8620/10. Offers $1.8780, $1.8800-30.

USD/JPY opened in Europe at Y109.47. Rate pointed highs on Y109.80 befjre it retreated. Dollar-yen bids Y109.00, Y108.50. Offers Y110.00/10, Y110.35/50.

Meanwhile, dollar may come under pressure ahead of CPI report due to come at 12:30 GMT. Analysts predict Core CPI rose 0.2% in July after +0.3% month earlier. CPI rose 0.4% in July after +1.1% in June.

EUR/USD: $1.4930, $1.4835
USD/JPY: Y110.00, Y109.20, Y108.00, Y107.90
EUR/JPY: Y164.85
AUS/USD: $0.8750, $0.8755
USD/CAD: C$1.0810

Mitul Kotecha, head of global foreign exchange research at Calyon "(We) are becoming increasingly cautious about the ability of the dollar to sustain gains and believe that a period of consolidation is more likely over coming days. The risk remains that it is all happening too quickly especially as there is still a lot of bad news out there."

The euro came under heavy selling pressure on Thursday, as figures showing contraction in the euro zone's two largest economies bolstered investors' increasingly gloomy view of global growth and helped support the U.S. dollar.
Germany and France both contracted in the second quarter, which should confirm broader economic contraction in the 15-nation bloc and likely raise the spectre of recession in Europe.
This comes in a week in which the Bank of England issued a surprisingly pessimistic outlook for the UK economy, official figures showed Japan's economy shrank in the second quarter and Australia's central bank said it wouldn't wait for inflation to fall before cutting interest rates.
Official figures on Thursday showed that the French economy contracted by 0.3% in the second quarter, compared with predictions of 0.2% expansion.
Germany, the euro zone's economic powerhouse, shrank by 0.5%, not quite as much as the 0.8% contraction analysts had expected.
While the U.S. economy is hardly cause for unbridled optimism, even accounting for encouraging exports and trade data, currency investors continue to give the dollar the benefit of growing global doubt.
Meanwhile, dollar may come under pressure ahead of CPI report due to come at 12:30 GMT. Analysts predict Core CPI rose 0.2% in July after +0.3% month earlier. CPI rose 0.4% in July after +1.1% in June.

1.Expected strong correction in Q2 in part
2.Q2 German economy dip marked by oil price hike
3.No reason for pronounced economic pessimism

Resistance 3: Y111.80
Resistance 2: Y110.40
Resistance 1: Y109.80
Current price: Y109.76
Support 1: Y108.30
Support 2: Y107.30
Support 3: Y105.70
Comments: USD/JPY gets closer to resistance around yesterday's high on Y109.80. Stronger resistance is around Aug 11-12 highs on Y110.40. Key resistance is around Y111.80 (trend line from Mar 2008). Support comes at overnight’s lows on Y108.30, below – at Y107.30. Stronger support comes near trend line from Mar 2008 at Y105.70.

Resistance 3: Chf1.1080
Resistance 2: Chf1.1000
Resistance 1: Chf1.0940
Current price: Chf1.0876
Support 1: Chf1.0740
Support 2: Chf1.0680
Support 3: Chf1.0520
Comments: Dollar remains in consolidation phase. Support is near Monday’s lows on Chf1.0740. Below correction may dip down to Chf1.0680 and then – to Chf1.0520 (last Thursday’s lows). Strong resistance is around trend resistance line from Mar 17 on Chf1.0940. Above the target comes at 38.2% Fibo (Chf1.3180 - Chf0.9630 decline). Break above that level will open the way to Chf1.1080.

Resistance 3: $1.8940
Resistance 2: $1.8840
Resistance 1: $1.8740
Current price: $1.8692
Support 1: $1.8620
Support 2: $1.8510
Support 3: $1.8300
Comments: Cable remains under minor resistance near yesterday’s high on $1.8740 (38.2% of the fall from $1.9035 to $1.8620). Above the target comes at $1.8830/40 (50%). Support is around overnight lows on $1.8620. Key support is around Oct 2006 lows $1.8510. Below support is around $1.8300 (38.2% Fibo $1.3670 - $2.1160).

Resistance 3:$1.5140
Resistance 2: $1.5080
Resistance 1: $1.4970
Current price: $1.4892
Support 1: $1.4810
Support 2: $1.4760
Support 3: $1.4700
Comments: Euro remains under pressure, but above resent lows on $1.4810 (minor support). Below losses may widen to $1.4760. Strong support remains at $1.4700 (50% of $1.3380 - $1.6040 rise). Resistance is around 23.6% Fibo of $1.5500 - $1.4810 decline. Above the recovery may extend to $1.5080 (38.2%), then – to $1.5140 (Broken channel support line from Jul 15).

EUR/USD gets a lift following release of euro-zone data. Rate managed to break above $1.4900 and print highs on $1.4910. Rate currently trades around $1.4887.

HICP declined 0.2% on the month in July, HICP ex-energy and unprocessed foods, which the ECB focuses on, remained stable at an annual +2.5% for the third month in a row.

The euro was little changed against the yen and the dollar before a report that may show Europe's economy contracted for the first time since the single currency was introduced almost a decade ago.
The European currency fell earlier on concern the second- quarter data will prompt traders to cut bets on higher interest rates in the 15 countries that share the euro. Australia's dollar gained, snapping a 12-day losing streak, as prices of commodities the country exports increased.
``The euro might find some support in the near term because the recent moves were overdone,'' said Lee Hardman, currency strategist at Bank of Tokyo-Mistubishi Ltd. in London. ``But longer-term, we expect the currency weaken against the dollar in the next 12 months. There's more bad news to come in the euro area.'' Hardman predicts the euro will fall to $1.40 in the next 12 months.
Europe's economy shrank 0.2 percent in the second quarter, after growing 0.7 percent in the first, according to the median forecast of 40 economists surveyed by Bloomberg News.
The German economy, Europe's largest, contracted for the first time in almost four years in the second quarter, a government report showed today. Gross domestic product fell a seasonally adjusted 0.5 percent from the previous three months, when it climbed 1.3 percent, the Federal Statistics Office said in Wiesbaden.

EUR/USD having got support at $1.4850 slowly rose to $1.4940, before it set stable at $1.4910.

GBP/USD challenged strong support around $1.8620 and rebounded to $1.8735.

USD/JPY printed low at the open of the day at Y109.00 before gained to Y108.90.

EUR/USD $1.4930, $1.4835
USD/JPY Y108.00, Y107.90, Y109.20, Y110.00
EUR/JPY Y164.85
AUD/USD $0.8750, $0.8755
USD/CAD C$1.0810

Hans-Werner Sinn, Ifo president - "The economic climate has further clouded over in nearly all countries of the euro area in the third quarter of 2008. The slowing in economic activity will continue in all countries of the euro area in the coming six months."

Resistance 3: Y111.80
Resistance 2: Y110.40
Resistance 1: Y109.80
Current price: Y109.40
Support 1: Y108.30
Support 2: Y107.30
Support 3: Y105.70

Comments: USD/JPY declines with support comes at overnight’s lows on Y108.30, below – at Y107.30. Stronger support comes near trend line from Mar 2008 at Y105.70. Resistance is around Y109.80. Strong resistance is around Aug 11-12 highs on Y110.40. Key resistance is around Y111.80 (trend line from Mar 2008).

Resistance 3: Chf1.1080
Resistance 2: Chf1.1000
Resistance 1: Chf1.0940
Current price: Chf1.0873
Support 1: Chf1.0740
Support 2: Chf1.0680
Support 3: Chf1.0520

Comments: Dollar remains in consolidation phase. Support is near Monday’s lows on Chf1.0740. Below correction may dip down to Chf1.0680 and then – to Chf1.0520 (last Thursday’s lows). Strong resistance is around trend resistance line from Mar 17 on Chf1.0940. Above the target comes at 38.2% Fibo (Chf1.3180 - Chf0.9630 decline). Break above that level will open the way to Chf1.1080.

Resistance 3: $1.8940
Resistance 2: $1.8840
Resistance 1: $1.8740
Current price: $1.8671
Support 1: $1.8620
Support 2: $1.8510
Support 3: $1.8300

Comments: Cable remains under pressure in the wake of publication of BoE inflation report. Support comes around $1.8620. Key support is around Oct 2006 lows $1.8510. Below support is around $1.8300 (38.2% Fibo $1.3670 - $2.1160). Resistance is near yesterday’s high on $1.8740 (38.2% of the fall from $1.9035 to $1.8620), above – on $1.8830/40 (50%).

"The euro-dollar is likely to remain on a weak footing,'' analysts led by Hans-Guenter Redeker, the London-based global head ofcurrency strategy at BNP Paribas SA, France's biggest bank, wrote in a research note yesterday. ``The GDP report would confirm Europe is moving below trend growth, which will, over time, release deflationary forces.'' Traders should sell euros for dollars with a target of $1.46, according to BNP Paribas.

The Sep S&P contract was last up 2.30 points at 1286.90, with the Nasdaq Sep contract up 3.75 points at 1945.25.

workday-adjusted annual rate of +1.7%, unadjusted growth of +3.1%.

Resistance 3:$1.5140
Resistance 2: $1.5080
Resistance 1: $1.4970
Current price: $1.4865
Support 1: $1.4810
Support 2: $1.4760
Support 3: $1.4700

Comments: Euro consolidates within the former range above resent lows on $1.4810 (minor support). Below losses may widen to $1.4760. Strong support remains at $1.4700 (50% of $1.3380 - $1.6040 rise). Resistance is around 23.6% Fibo of $1.5500 - $1.4810 decline. Above the recovery may extend to $1.5080 (38.2%), then – to $1.5140 (Broken channel support line from Jul 15).

Oil settled at $116.00 per barrel in New York on Wednesday where it traded a $112.87 to $117.46 range.

High Low Close

06:00 Germany CPI (July) final 0.6% 0.6%
06:00 Germany CPI (July) final Y/Y 3.3% 3.3%
06:00 Germany HICP (July) final Y/Y 3.4% 3.4%
06:00 Germany GDP (Q2) flash -0.7% 1.5%
06:00 Germany GDP (Q2) flash Y/Y unadjusted 1.7% 1.8%
06:00 Germany GDP (Q2) flash Y/Y adjusted - 2.6%
06:35 France GDP (Q2) preliminary 0.2% 0.5%
06:35 France GDP (Q2) preliminary Y/Y 1.7% 2.0%
09:00 EU(15) Harmonized CPI (July) final - 0.4%
09:00 EU(15) Harmonized CPI (July) final Y/Y 4.1% 4.0%
09:00 EU(15) Harmonized CPI ex EFAT (July) Y/Y - 1.8%
09:00 EU(15) GDP (Q2) flash -0.2% 0.7%
09:00 EU(15) GDP (Q2) flash Y/Y 1.5% 2.2%
12:30 USA Jobless claims (week to 09.08) - 455K
12:30 USA CPI (July) 0.4% 1.1%
12:30 USA CPI (July) Y/Y - 5.0%
12:30 USA CPI excluding food and energy (July) 0.2% 0.3%
12:30 USA CPI excluding food and energy (July) Y/Y - 2.4%
20:30 USA M2 money supply (04.08), bln - -14.2