The Internet auctioneer Ebay Inc reported its slowest revenue growth since going public in 1998 as customers paid less for items on its retail sites.

The investment bank JPMorgan Chase & Co reported a 52% decline in profit but topped estimates. Its investment bank cut the value of leveraged-loan and mortgage-related securities by an additional $1.1B.

Market perception that U.S. Treasury Secretary Henry Paulson's rescue plan may help the mortgage-finance company strengthened Fannie Mae and Freddie Mac.

The world’s largest beverage company The Coca-Cola Company reported a 23% net income drop in 2Q despite a rise in earnings excluding items. Its overseas business has continued to grow, while North America remains "difficult operating environment.”

Slid to $129.00, down over $5.60, before rebounding to $129.50 current level.

Slides under $1.5800 area and into the zone of stops reported earlier, the pair taking its cue from the ongoing slide in oil. Stops in the process of being flushed, bids in place at $1.5785/75.

The major indices climb to session highs as oil prices (-2.9% at $130.60) sink for the third day in a row, falling in tandem with natural gas prices. Natural gas prices are down a steep 7% after the Energy Information Administration data showed a larger than expected inventory build.
The financial sector (+5.4%) continues to lead the way higher, lifted by earnings reports from JPMorgan Chase (+4.01) and BlackRock (+23.14). The sector is up 22% since its multi-year low that was hit on Tuesday.
Meanwhile, Treasuries are facing selling pressure. The 10-year note is down 20 points, sending its yield above 4%.

The yen dropped against the dollar and the euro as better-than-expected earnings at JPMorgan Chase & Co. encouraged investors to sell the currency to buy higher- yielding assets outside Japan.
The dollar fell against the euro as a report showed manufacturing in the Philadelphia region contracted in July for an eighth month.
The Dollar Index on the ICE market, which tracks the greenback against the currencies of six U.S. trading partners, fell 0.2 percent to 71.954, from 72.064 yesterday, when it touched 71.508, the lowest level since April 23.
The dollar weakened versus the euro on a sign of contraction in manufacturing. The Philadelphia Fed's general economic index improved to minus 16.3 this month from minus 17.1 in June, the bank reported today. Readings less than zero signal a decline. The median forecast of 56 economists was for a reading of minus 15.
Builders started work in June on the fewest single-family U.S. homes since 1991, the Commerce Department said. A change in New York City building codes spurred total starts, which include condominiums and apartment buildings, to a four-month high.
Federal Reserve Chairman Ben S. Bernanke told the House Financial Services Committee yesterday that growth and inflation risks are increasing and the housing market is the ``central element'' of the crisis.
In the carry trade, investors get funds in a country with low borrowing costs and buy assets where returns are higher. The Bank of Japan held its target lending rate at 0.5 percent this week, the lowest among major economies. The benchmark rates are 12 percent in South Africa and 4.5 percent in Sweden.
``Last week we were extremely bearish,'' said Alan Kabbani, senior currency trader at Wachovia Corp. in Charlotte, North Carolina. ``Now the market is taking some of that bearishness out and becoming a little more confident about the economy and the financial sector. That's benefiting equities a bit, and the yen is related very tightly to equities.''
Yen sales by Japanese individual investors on the Tokyo Financial Exchange climbed to the highest since August for a second day yesterday as gains in the currency made higher- yielding assets abroad cheaper.

"We will wait for more surveys to make an ISM forecast, although two surveys suggest that the ISM won't be much changed from the June level of 50.2."

Rising crude prices, weak economic readings put brakes on Wall Street rally sparked by more positive financial sector news.
Stocks roared immediately after the market open, with indexes jumping more than 1% on strong earnings from JPMorgan Chase. But the major gauges quickly pared those gains as crude oil shot up by nearly $2.
Economy Construction of single-family homes fell 5.3% to the slowest pace since January 1991, according to a Commerce Department report.
The Philadelphia Fed Index, a regional manufacturing survey, posted a reading of -16.3 in July, worse than economists' expectations.
And the Labor Department reported that initial jobless claims rose by 18,000 last week, although the jump was smaller than economists had forecast. The four-week moving averages of initial jobless claims and continued claims from those already receiving benefits both fell slightly.
JPMorgan Chase said its second-quarter profit plunged 53% due to $1.1 billion in writedowns. But the bank, which incurred a large loss from acquiring embattled investment bank Bear Stearns, still managed to beat Wall Street projections. Shares jumped 13% in midday trading.
Other financial institutions followed suit, most notably government-backed mortgage finance giants Fannie Mae and Freddie Mac , which soared 25%. The embattled firms were the focal points of downtrodden investor sentiment toward financials for several of the previous sessions before rebounding strongly Wednesday.
Oil prices climbed a little less than $1 after sinking more than $10 a barrel in the previous two sessions.
Shares of online auction Web site eBay fell sharply after it issued a disappointing earnings forecast for the current period. After the market close Wednesday, eBay said its second-quarter net rose 22%, but its outlook for the third quarter failed to impress investors. Goldman Sachs and Merrill Lynch both downgraded the stock, and shares fell 14%
Treasury prices were mixed. Short-term bonds sold off, but investors bought up long-term Treasurys. The yield on the benchmark 10-year note rose slightly to 3.96% from 3.95% late Wednesday. Bond prices and yields move in opposite directions.

Trading on the major indices has taken a pessimistic turn as the major indices have fallen from a gain of roughly 1.0% to trade near the unchanged mark.
Four of the major economic sectors are sporting gains. Financials continue to lead, though off its session high. The sector is up 3.1%.
Helping financials were better-than-expected quarterly earnings results from JPMorgan Chase (+3.51), BlackRock (+29.02), and the regional player PNC Financial (+4.66).

Economist Michelle Meyer at Lehman focuses on prices received index in the Philly survey (28.8 from 29.7 in June). "This suggests that manufacturers are having a difficult time passing higher input costs onto consumers, thereby leaving profit margins squeezed."

"The week of the 12th is survey week for the employment report. A survey week comparison reveals that initial claims have fallen by 18,000. Our preliminary projection is for a 60,000 decline in July payrolls while the unemployment rate remains unchanged at 5.5%."

Stocks have pulled back from their rapid advance, though continue to trade with solid gains.
Oil prices, which were down in early action, are trading higher. Crude futures are currently trading 0.7% higher at $135.60 per barrel.
The reverse in crude prices has rekindled buying in the energy sector (+0.5%). Energy had fallen out of favor in recent sessions as crude prices receded from record highs.
In economic data, the Philadelphia Fed Index, a regional manufacturing survey, posted a July reading of -16.3. The reading is worse than the -15.0 that economists were expecting.

HFE says reason unemploy claims were a low 366K might reflect "the behavior of the auto sector, where temporary job losses as a result of the annual auto retooling shutdowns have been much smaller than the seasonals expected." Claims could rebound soon to 400k, he says.

European equity bourses are extending gains to fresh session highs, with financial stocks leading the charge, in the wake of JPMorgan quarterly earning result. Irish banks are higher after prime minister Brian Cowen said the institutions were "very well capitalised" and did not require government aid. Nokia is another noticeable riser after the Finnish mobile phone maker raised its forecasts for the industry, saying volumes would rise by 10 per cent or more in 2008. The company also reported stronger-than-expected unit sales in the second quarter. CAC-40 is up 120pts (+2.93%), Xetra-DAX is up 152pts (+2.45%) and FTSE-100 is up 158pts (+3.14%).

Stocks are on track for an upward start to Thursday's action: (S&P futures vs fair value: +6.0. Nasdaq futures vs fair value: +10.5.)
The price for a barrel of crude fell about $1 in electronic trading. Oil has lost about $11.50, or 8%, since the close Monday, as investors have become concerned that an economic slowdown and record prices will combine to cut consumption.
Stocks soared Wednesday after investors finally got some good news out of the banking sector and oil prices continued their descent. The Dow Jones industrial average ended the session more than 2.5% higher.
Housing starts and permits both rose unexpectedly, but that was because of a jump in apartment construction due to a change in New York City building rules. Starts of single-family homes fell to a 17-year low.
Initial jobless claims rose, but was still much lower than forecast. The other economic reading Thursday is the reading on regional manufacturing due at 1400GMT from the Federal Reserve Bank of Philadelphia.
Banks Investors are keeping a close eye on financial shares as earnings in the bank sector keep trickling in.
JPMorgan Chase reported a 52% decline in net income Thursday, but earnings topped expectations. JPMorgan posted a profit of $2 billion, or 54 cents per share. Analysts polled by Thomson Financial had expected to earnings of 44 cents per share.
Merrill Lynch is due to post quarterly results after the market close.
Financial shares got a much-needed boost Wednesday after Wells Fargo reported better-than-expected earnings and raised its dividend.
The earnings continues with tech heavyweights Google, Microsoft and IBM scheduled to release their results after the market close.
Online auction site eBay reported a jump in quarterly profit late Wednesday, but offered a weak outlook for the current period.
Two Dow components, Coca-Cola and United Technologies, also both topped forecasts with their results. Coke reported a rise in earnings excluding items, although a writedown related to its bottler resulted in a drop in net income. Diversified manufacturer United Technologies reported improved earnings and revenue.

"Single-family starts fell 5.3% to 647,000... the change in the New York City construction code contributed to a jump of 42.5% to 419,000 units in multi-family starts."

Dow futures up 77, Nasdaq futures up 14.

Commerce Dept says this reflects new construction codes in NYC which resulted in surge in multifamily activity. Excluding the NE multi data, starts were -4% and permits +0.7%.

The dollar fell against the euro before reports that may show U.S. housing starts declined to a 17-year low and manufacturing contracted for an eighth month.
The U.S. currency traded close to the lowest in almost two months against the yen on speculation credit-market losses in the U.S. will deepen, undermining the case for the Federal Reserve to raise interest rates.
``The sentiment towards the dollar is very negative,'' said Lee Ferridge, a senior foreign-exchange strategist in London at State Street Global Markets. ``The housing starts aren't going to be good numbers. The Fed is focusing back on the growth issue and real economic numbers are going to have more of an impact. Investors are selling the dollar again.''
The U.S. currency will probably break its record low versus the euro in coming days and fall to $1.65 during the next few months, Ferridge said
Fed Chairman Ben S. Bernanke told lawmakers yesterday that growth and inflation risks are increasing and the housing market is the ``central element'' of the crisis.

EUR/USDEased off earlier highs of $1.5890 extends into the reported area of demand between $1.5835/25, touching a low just above $1.5830. Offers $1.5900, stronger $1.5925/35, bids $1.5830.

European equity bourses are trading near session highs mid-day Thursday, with financial stocks leading the charge higher after better than expected earnings from JPMorgan Chase and after newswire corrects Bank of New York Mellon EPS at 74 cents -- in line with estimates compared to initial EPS headline of 26 cents. Coca Cola Q2 EPS $0.61 -- topped estimates. Elsewhere, airline stocks are higher as crude oil prices languished near session low at $133.63. CAC-40 is up 89pts (+2.16%), Xetra-DAX is up 114pts (+1.86%) and FTSE-100 is up 104pts (+2.0%)

Eases off earlier highs of $1.5890 extends into the reported area of demand between $1.5835/25, touching a low just above $1.5830, one trader says. A break below $1.5825 to open a move on to retest area of recent lows between $1.5810/00.

The dollar fell against the euro before reports that may show U.S. housing starts declined to a 17-year low and manufacturing contracted for an eighth month.
The U.S. currency traded close to the lowest in almost two months against the yen on speculation credit-market losses in the U.S. will deepen, undermining the case for the Federal Reserve to raise interest rates.
``The sentiment towards the dollar is very negative,'' said Lee Ferridge, a senior foreign-exchange strategist in London at State Street Global Markets. ``The housing starts aren't going to be good numbers. The Fed is focusing back on the growth issue and real economic numbers are going to have more of an impact. Investors are selling the dollar again.''
The U.S. currency will probably break its record low versus the euro in coming days and fall to $1.65 during the next few months, Ferridge said
Fed Chairman Ben S. Bernanke told lawmakers yesterday that growth and inflation risks are increasing and the housing market is the ``central element'' of the crisis.
Housing starts fell to a 960,000 annual pace last month, the weakest since March 1991, from 975,000 in May, according to the median of 76 forecasts in a Bloomberg News survey. The Department of Commerce report is due at 1230GMT.
The Fed Bank of Philadelphia's general economic index will be minus 15 in July, from minus 17.1 in June, according to a separate Bloomberg survey. Readings less than zero signal a decline. The bank releases the report at 1400GMT.

Resistance 3: Chf1.0300
Resistance 2: Chf1.0250
Resistance 1: Chf1.0180
Current price: Chf1.0160
Support 1: Chf1.0010
Support 2: Chf0.9980
Support 3: Chf0.9950

Comments: Dollar rises, getting close to session highs on Chf1.0180/90 (resistance). Stronger level comes near Monday’s highs on Chf1.0250, with a break above will point to Chf1.0300. Strong support comes at Chf1.0010 (Jul 15 low), further – at Chf0.9980 and Chf0.9950.

London equities rebounded on Thursday, in line with strong overnight gains in the US as embattled financial stocks found support. The FTSE 100 rose 0.9% to 5,195.2, recovering 44 points after three sessions of steep selling. High street banks led the bounce. Royal Bank of Scotland is up 9.3%, while Barclays 7.8% higher, Lloyds TSB rose 8% and HBOS moved 4.9%.

1.Remember the 1970s; if you don't act you risk stagflation
2.Short-term inflation expectations are already changing
3.Must prevent long-term inflation expectations from rising
4."I'm not especially cheerful on the economy"
5.Food price rises might slow but oil very uncertain

USD/CAD retains a consolidator tone, with trade holding within a tight range near parity - C$0.9997/1.0051. Offers remain in place around C$1.0050, more toward C$1.0080/90. Bids C$0.9885/75 with stops on C$0.9960.

EUR/USD: $1.5740, $1.5700, $1.5665
USD/JPY: Y105.20, Y105.75, Y106.00, Y106.15
GBP/USD: $2.0000
AUS/USD: $0.9630

EUR
Bids: $1.5835/25, $1.5785/75
Offers: $1.5870, $1.5900, $1.5925/30, $1.5950

JPY
Bids: Y105.50, Y106.00
Offers: Y105.00, Y104.80

GBP
Bids: $1.9970, $1.9950, $1.9925/15, $1.9900
Offers: $2.0025/35, $2.0050/65 $2.0100

The dollar was little changed against the euro before reports that may show U.S. housing starts declined to a 17-year low and manufacturing contracted for an eighth month.
The Australian dollar fell for a second day as investors added to bets the central bank will reduce interest rates in coming months.

EUR/USD rose from $1.5820 to $1.5860.
GBP/USD consolidated within the $2.0000/20 before declining to $1.9970.
USD/JPY rose from Y104.70 to Y105.40.

Analysts say housing starts fell to a 960,000 annual pace last month, the weakest since March 1991, from 975,000 in May, according to the median of forecasts.
The Fed Bank of Philadelphia's general economic index will be minus 15 in July, compared with minus 17.1 in June, according to a separate survey.

Japan's benchmark stock indices ended the day higher, boosted by overnight gains in the US. However, the lead indices slipped from their best levels in afternoon trade. The benchmark Nikkei 225 was 127.15 points, or 1.0%,higher at 12887.95. The broader-based TOPIX was up 14.37 points at 1263.65.

Stock market fixing:
Nikkei 225 +6.24 +0.10% 12,760.80
Topix -3.84 - 0.30% 1,249.28
CAC +51.30 +1.26% 4,112.45
FTSE -21.30 -0.41% 5,150.60
DAX +73.67 +1.21% 6,155.37
Dow +276.74 +2.52% 11,239.28
NASDAQ +69.14 +3.12% 2,284.85
S&P +30.45 +2.51% 1,245.36
10yr Note +0.9000 +0.234% 3.934%
NYMEX Crude Oil -4.14 -2.98% 134.60
Gold -16.00 -1.63% 962.70

Japan's Topix index fell for a fourth day, led by commodities producers, after oil posted its biggest decline in four months yesterday amid signs record prices and slowing growth are curbing demand.
Inpex Holdings Inc. fell to the lowest in two months, while Mitsubishi Corp., the nation's largest trading company, sank the most in a week. Declines were limited as companies including All Nippon Airways Co. and Nippon Paper Group Inc. advanced on speculation their costs will be reduced by falling energy prices.

European stocks rebounded from a three-year low after a drop in oil prices boosted earnings prospects for carmakers and airlines.
Daimler AG, the world's second-biggest luxury automaker, and Ryanair Holdings Plc, Europe's largest discount airline, gained after crude fell. Cie. Financiere Richemont SA rallied after sales at the world's biggest jewelry maker topped analysts' estimates. Vivendi SA led media companies higher after Activision Blizzard Inc., which completed its merger with Paris-based Vivendi's games unit last week, reported profit that beat the publisher's own forecast.
Daimler added 3.1%. Volkswagen AG, Europe's largest carmaker, climbed 7.9%.
Ryanair advanced 6.6%.
Stocks got a big bounce back Wednesday as investors welcomed encouraging news from the banking and airline sectors. Falling oil prices also helped spark a strong stock market rally.

Federal Reserve Chairman Ben Bernanke appeared before the House Financial Services Committee Wednesday after testifying before the Senate Banking Committee Tuesday. In his testimony, Bernanke stated that government-backed mortgage financers Fannie Mae and Freddie Mac are "in no danger of failing."
That helped Fannie and Freddie soar 30% in Wednesday trading. The embattled firms were the focal points of downtrodden investor sentiment toward financials for several of the previous sessions.
Shares of Washington Mutual jumped 25.5%, helping the bank bounce back from a selloff earlier in the week. A Lehman Brothers analyst note released Monday suggested the bank may need to "substantially" raise its reserves over the course of 2008 to cover losses from home loans.Other struggling financials jumped on the bandwagon. Bank of America rose 22.4%, JPMorgan Chase gained 15.9%, Wachovia soared 16.1% and Citigroup added 13.1%.

The dollar increased the most against the euro in almost two weeks as declining crude oil prices and better-than-estimated earnings at Wells Fargo & Co. pushed U.S. equities higher.
Federal Reserve Chairman Ben S. Bernanke reiterated in testimony before the House Financial Services Committee in Washington today that growth and inflation risks are increasing. FOMC’s minutes said the same with Fed’s chairman.
U.S. consumer prices advanced 1.1% in June after rising 0.6% the prior month, the Labor Department reported today in Washington. It was the biggest increase since 2005. Production at factories, mines and utilities rose 0.5% last month after dropping 0.2% in May, the Fed reported today.

EUR/USD printed high on $1.5950 before it slid to $1.5813 and set stable on $1.5810/50.
GBP/USD failed to break above $2.0100, spurring longs covering. It dragged the pound down to $1.9950.
USD/JPY rose from $103.70 to Y105.00.

Attention today turns to US data, including fresh figures from housing market. At 14:00 GMT Philly Fed’s index is schedule to release.
At23:50 GMTBOJminuteswillbereleased.

Resistance 3: Y106.80
Resistance 2: Y106.00
Resistance 1: Y105.30
Current price: Y105.17
Support 1: Y104.50
Support 2: Y103.70
Support 3: Y103.00
Comments: Dollar gets close to resistance at Y105.30, further – near Y106.00. Stronger resistance comes at Monday’s high on Y106.80. Support mentioned near hourly low on Y104.50. Below support is around Y103.70 (Wednesday’s low) and on Y103.00.

Resistance 3: Chf1.0300
Resistance 2: Chf1.0250
Resistance 1: Chf1.0180
Current price: Chf1.0170
Support 1: Chf1.0010
Support 2: Chf0.9980
Support 3: Chf0.9950
Comments: Dollar rises, getting close to session highs on Chf1.0180/90 (resistance). Stronger level comes near Monday’s highs on Chf1.0250, with a break above will point to Chf1.0300. Strong support comes at Chf1.0010 (Jul 15 low), further – at Chf0.9980 and Chf0.9950.

Resistance 3: $2.0200
Resistance 2: $2.0160
Resistance 1: $2.0100
Current price: $1.9995
Support 1: $2.0000
Support 2: $1.9960
Support 3: $1.9810
Comments: Sterling holds within the narrow ranges, challenging strong support zone at $2.0000. Below correction may widen to $1.9960 and $1.9810. Recent highs on $2.0100 is minor resistance. Stronger level comes near channel line from Jun 13 at $2.0160. Break above will open the way to $2.0200.

Resistance 3:$1.6080
Resistance 2: $1.6030
Resistance 1: $1.5940
Current price: $1.5862
Support 1: $1.5800
Support 2: $1.5760
Support 3: $1.5600
Comments: Euro rebounds after yesterday’s decline. Minor resistance is at $1.5940/60. Above the target comes at life-time high on $1.6030, then - $1.6080. Support comes near yesterday’s lows on $1.5800. Below – around channel support line from Jun 13 on $1.5760/70 with stronger – on Jul 07 low at $1.5600/10.

High Low Close
EUR/USD 1.5947 1.5798 1.5819
USD/JPY 105.18 103.74 105.09
GBP/USD 2.0096 1.9956 1.9981
USD/CHF 1.0187 1.0027 1.0177

EUR/JPY 166.84 165.29 166.24
EUR/GBP 0.7953 0.7905 0.7914
GBP/JPY 210.25 207.98 209.93
GBP/CHF 2.0355 2.0104 2.0331

Change % Change Last
Nikkei 225 +6.24 +0.10% 12,760.80
Topix -3.84 - 0.30% 1,249.28
CAC +51.30 +1.26% 4,112.45
FTSE -21.30 -0.41% 5,150.60
DAX +73.67 +1.21% 6,155.37
Dow +276.74 +2.52% 11,239.28
NASDAQ +69.14 +3.12% 2,284.85
S&P +30.45 +2.51% 1,245.36
10yr Note +0.9000 +0.234% 3.934%
NYMEX Crude Oil -4.14 -2.98% 134.60
Gold -16.00 -1.63% 962.70

05:00 Japan Leading indicators (May) final - 40.0
05:00 Japan Coincident indicators (May) final - 33.3
12:30 USA Jobless claims (week to 12.07) - 346K
12:30 USA Housing starts (June), mln 0.985 0.975
12:30 USA Building permits (June), mln 0.980 0.969
14:00 USA Philadelphia Fed index (July) -15.0 -17.1
20:30 USA M2 money supply (07.07), bln - -23.6
23:50 Japan BoJ meeting minutes (12-13.06)