The world's largest Internet retailer Amazon.com Inc reported second-quarter profit that rose more than analysts’ forecasts on strong flat-panel TV and jewelry demand and higher overseas sales.

The world's second-biggest luxury carmaker Daimler AG said weak U.S. sales hurt profit and cut its earnings forecast.

The Dow Chemical Company reported 27% drop in second-quarter net income as two steep price increases announced during the quarter failed to offset sharply higher costs for fuel and raw materials.

The world's third-largest automaker Ford Motor Company announced plans to transform its vehicle lineup and reported a massive $8.7B net loss for the second quarter. The company said it will make big changes to the vehicles it sells domestically - bringing six small cars made in Europe to the North American market.

Stocks are relatively unchanged from earlier levels. The session's tone has been generally pessimistic since the early going.
Gains of Qualcomm (+8.47) have taken the stock to a new 52-week high.
Treasuries continue to find support. The benchmark 10-year Note is up 22 ticks and yielding 4.03%.

--Inflation Higher Than Expected Vs May Infl Report
--Near-Term Prospects For CPI, GDP Worse Vs May Rept
--Not Much MPC Can Do To Impact CPI, GDP In Near Term
--Economic Activity News "Not Very Good Either"
--Business Surveys Have Been "Distinctly Downbeat"
The Bank of England's Monetary Policy Committee has to balance the upside and downside risks to inflation generated by the credit crunch and elevated commodity and energy prices, with both the growth and inflation outlooks deteriorating, the BOE's Deputy Governor Monetary Policy Charles Bean said. Bean offered no clear sign on whether the next move in interest rates would be up or down.

The euro fell to the lowest level against the dollar in more than two weeks as a drop in business confidence in Germany reduced speculation that the European Central Bank will raise interest rates again this year.
The yen rose against the dollar and the euro as a decline in U.S. stocks prompted investors to pare holdings of higher- yielding assets financed by loans in Japan.
``We've probably seen a medium-term peak in the euro,'' said Fabian Eliasson, vice president of currency sales at Mizuho Corporate Bank Ltd. in New York. ``The European economy is slowing, and it's less likely for the European Central Bank to pull the trigger and hike.''
Sterling weakened from the highest level against the euro in seven weeks after British retail sales dropped in June by the most since at least 1986 as accelerating inflation prompted consumers to cut spending.
U.S. home resales dropped to a 4.86 million annual rate in June, the lowest level in a decade, from a 4.99 million pace the prior month, the National Association of Realtors said today in Washington.
Falling U.S. home prices will force financial firms to write down $1 trillion from their balance sheets, crimping bank lending and sparking sales of assets, said Bill Gross, who runs the world's biggest bond fund, at Pacific Investment Management Co. in Newport Beach, California. Financial firms have reported $467.9 billion in losses and writedowns since the start of 2007.
``It's a contest of the ugliest,'' said Alan Ruskin, head of international currency strategy in North America at RBS Greenwich Capital Markets Inc. in Greenwich, Connecticut. ``The weakness in the U.S. is not an isolated event.'' He said of the dollar versus the euro that ``it's hard to see the broad range of $1.58 to $1.60 to be broken.''

Healthcare remains the only sector in positive ground as sellers lead the session's action. Financials have fallen to their worst level of the session, down 3.5%. Still, the financial sector is up more than 4.0% week-to-date.
Oil prices are currently up just a bit to $124.65 per barrel. The commodity has been trading without clear direction this session after dropping noticeably in recent sessions.

"The lawsuit charges UBS with falsely selling and marketing auction rate securities as safe, highly liquid, and cash equivalent securities. However, the representations were deceptive
as the auction rate securities market came under tremendous strain, leaving the securities with mounting liquidity risks that eventually blocked thousands of customers across New York and the nation from accessing their holdings."

Rebounded off the earlier Y107.42 low seen on stops to trade as high as Y107.70 but momentum is unimpressive and weak US stocks, Dow down 120, does nothing to bolster the pair on the day, leaving the dollar stranded at Y107.60. Resistance/supply still at Y108.00 appears a formidable obstacle but, at the same time, persistence over the 200d ma is seen as a plus. Bids remain at Y107.00/20, surrounding the 200d ma and expected to underpin.

Dow tumbles more than 100 points as investors jeer huge losses from carmaker, a sharp rise in initial jobless claims and a sharp decline in existing home sales.
The Dow Jones industrial average tumbled 1%, and the broader Standard & Poor's 500 index index fell 0.7% from Wednesday's close. The Nasdaq composite index sank 0.8% in early trading.
The National Association of Realtors reported that sales of homes by homeowners fell 2.6% to a lower-than-expected 4.86 million annual rate in June. The economy has slumped as home sales continue to decline, because American homeowners have lost much of their purchasing power, leading to a decline in consumer spending.
Also driving down stocks was a report from the U.S. Labor Department that said new unemployment claims rose much more than expected last week. New applications filed for jobless benefits rose by a seasonally adjusted 34,000 to 406.
Furthermore, the struggling U.S. automaker Ford reported a huge $8.7 billion net loss for the second quarter. The third largest automaker by sales said it would restructure its North American product line to include more of the fuel-efficient vehicles, as rising gas prices have severely hampered consumer interest in big trucks and SUVs. Shares of Ford fell 6% in early trading.
Internet retailer Amazon.com , posted better-than-expected second-quarter earnings after the market's close Wednesday. Amazon also boosted its 2008 revenue projections, as CEO Jeff Bezos said high gasoline prices may be luring shoppers to its Web site.
Oil prices rose 63 cents to $125.07 a barrel Thursday after falling nearly $4 Wednesday on continued concerns about reduced demand. Oil has plummeted about $22 from its high of $147.27 set on July 11.
Treasury prices rose Thursday, bringing the yield on the benchmark 10-year note down to 4.09%. Bond prices and yields move in opposite directions.

WTI Nymex crude oil breaks below $123.62 - hitting fresh 7-week low. Support is at the 100-day moving average at $122.45.

Stocks continue to chop along in negative territory. Still, participants are finding encouragement among select names.
Amazon.com (+10.84) is making a strong showing despite the generally pessimistic tone to the session. The Internet retailer announced after yesterday's close its second quarter revenue climbed more than 40% from the prior year to $4.1 billion. Excluding extraordinary gains, it earned $0.26 per share, which is better than analysts forecast.
Qualcomm (+7.58) is also outperforming many names in the S&P 500. The company announced it has settled a longstanding legal dispute with Nokia (+1.12), which has overshadowed its downside guidance. The settlement is believed to remove uncertainty from the chip and wireless communication industry.

"All the drop (in ex home sales) was in the core single-family component, down 3.2%. This was the biggest decline since Sep last year but is an echo of the early Easter, which meant more people were active in the market in April, boosting May closings and hence setting a tough hurdle for June. Sales could drop more but at a lesser pace."

GBP/USD extending the recovery from the early US lows as the greenback
comes under pressure on the US data. Small offers now noted in the $1.9885 area, stronger at $1.9900/20.

USD/JPY slipped to Y107.48 area in post-data trade with stops clustered around the Y107.55 area. Further bids Y107.35/30.

At 14:00 GMT National Association of Realtors is due to report its house sales numbers. Market expects the Association to report a decline in the annual home sales rate to 4.95 million in June from 4.99 million the previous month.

EUR/USD: $1.5710-25, $1.5550, $1.6000, $1.6050
USD/JPY: Y107.90, Y108.00, Y107.60, Y108.30, Y107.30, Y106.80
EUR/JPY: Y169.50
GBP/USD $1.9900
AUD/USD $0.9500

A mixed opening loomed for stocks Thursday as investors digested a sharp drop in Ford profits, strong results from Amazon.com, and awaited word about the strength of the troubled housing market.

Stocks posted modest gains Wednesday as oil prices tumbled to the lowest close since early June.
After the bell a key reading on home sales is due to come, which appeared to have reached a bottom earlier this year, was due shortly after the market open. The National Association of Realtors was expected to report a decline in the annual home sales rate to 4.95 million in June from 4.99 million the previous month, according to economists.
The House passed a bill late Wednesday providing up to $300 billion in aid to homeowners facing foreclosure as well as government support to mortgage financers Fannie Mae and Freddie Mac.
Among corporate news: Regional Bank National City Corp. reported a mortgage-related loss of $2.45 per share, much deeper than expected.
Ford reported a huge $8.7 billion net loss for the second quarter.
Ford and rival General Motors have been hit hard by economic weakness and high fuel prices as people have stopped buying the high-margin sport utility vehicles that they had relied upon.
Dow Chemical reported second-quarter earnings fell 27% from the previous year due to the high cost of energy and raw materials.
Meanwhile, conglomerate 3M and Amazon.com reported profits.

USD/JPY continues to chop inside a Y107.65/80 range over the last hour or so, the dollar unable for now to push on to the Y107.98 high. Plenty of supply ahead of Y108.00, extending to Y108.20. Further supply clustered in the Y108.40/60 zone.

The following data were issued
06:45FranceBusiness confidence (July) 98.0 100.0 101.0 (102.0)
07:00FrancePMI (July) flash 47.3 49.0 49.2
07:00FrancePMI services (July) flash 47.0 49.7 50.1
07:30GermanyPMI (July) flash 50.9 52.0 52.6
07:30GermanyPMI services (July) flash 53.3 51.5 52.1
07:30ItalyBusiness confidence (July) 83.5 - 86.7 (87.1)
08:00GermanyIFO business climate index (July) 97.5 100.3 101.3
08:00EU(15)PMI (July) flash 47.5 48.7 49.2
08:00EU(15)PMI services (July) flash 48.3 48.8 49.1
08:00EU(15)Current account (May) adjusted, bln-7.3 - +1.5 (-0.3)
08:00EU(15)Current account (May) unadjusted, bln-21.4 - -7.4 (-9.2)
08:30UKRetail sales (June) -3.9% -3.0% 3.6 (3.5)%
08:30UKRetail sales (June) Y/Y 2.2% 3.9% 8.1%

The euro dropped for a fourth day against the yen as business confidence in Germany, Europe's largest economy, fell the most since the 2001 terrorist attacks. Traders pared bets the ECB will increase interest rates a second time this year.
The dollar also rose to the highest in a month against the yen as the U.S. Senate considered a bill that allows Treasury Secretary Henry Paulson to bail out Fannie Mae and Freddie Mac, the two biggest U.S. mortgage-finance companies.
The pound slid to the lowest in more than a week against the dollar as U.K. retail sales fell in June by the most since at least 1986.The pound weakened from the highest level against the euro in seven weeks after British retail sales dropped in June by 3.9% as accelerating inflation prompted consumers to cut spending.

EUR/USD opened in early Europe around $1.5693. The weaker than expected German Ifo survey knocked the pair to fresh lows for the day at $1.5653 before rate recovered to $1.5685. Offers $1.5695/1.5710, lge exp $1.5710/25, bids $1.5635/30, $1.5620/10.

GBP/USD opened early Europe at $1.9975. Sterling came under pressure in earlyEurope. Cable met demand at $1.9920 containing initial dip. Weak UK retail sales dropped cable to $1.9835, recoveryrestricted by $1.9880. Cable bids $1.9835/25, $1.9800. Offers $1.9890/00, $1.9920,$1.9950/60.

USD/JPY opened in early Europe around Y107.85. Rate slipped back to make session lows at Y107.59, ending the morning at Y107.70. Dlr-yen offers Y108.00/20, Y108.40/60, stops above, bids Y107.50.

Dollar gains may be held back by reports today and tomorrow that are expected to add to evidence of a U.S. housing slump.
The National Association of Realtors will today say sales of previously owned homes fell to a 4.94 million annual pace in June, from 4.99 million in May, a survey showed. The Commerce Department will tomorrow report sales of new houses dropped to an annual pace of 503,000 from 512,000 in May, a separate survey shows.

EUR/USD: $1.5710-25, $1.5550, $1.6000, $1.6050
USD/JPY: Y107.90, Y108.00, Y107.60, Y108.30, Y107.30, Y106.80
EUR/JPY: Y169.50
GBP/USD $1.9900
AUD/USD $0.9500

"Inflation concerns mean that monetary policy will either tighten or remain on hold in most developed economies."

EUR/USD recovered off post Ifo lows of $1.5637 with resistance still placed ahead of $1.5700. Offers said to extend toward $1.5710, more between $1.5725/35 ahead of $1.5750/60. Bids $1.5635/30, stronger between $1.5620/10 ahead of $1.5585/80.

The euro suffered fresh falls after a raft of weak data out of the region suggested that the economy is faltering rapidly.

Data out this morning showed that both the manufacturing and services sectors in the area is shrinking, highlighting that a recession is now a real possibility.

The euro zone Purchasing Managers Index for services slipped to a five year low of 48.3 in July from 49.1 in June. Euro zone manufacturing activity also slumped, falling to 47.5 from 49.2 in June. Both figures were below expectations.

At the same time , a key survey from Germany, the Ifo index also came in weaker than expected. The Ifo research institute said its July business climate index fell to 97.5 from 101.2 in June, dropping below analysts' forecasts of a decline to 100.0. The figure for June was revised down from 101.3.

"Poor German IFO data has combined with the already released PMI data to depressed the euro further," said Matthew Foster-Smith at Thomson IFR.

Elsewhere, the dollar continued to be propped up by falling oil prices and recent hints from U.S. rate setters that interest rates in the world's biggest economy may have to rise further.

Separately, the pound also fell prey to weak data, this time on the state of UK retail sales which suffered a massive slump in June. Retail sales in the UK plunged in June by their biggest amount since records began in 1986 but inflationary pressures, particularly within food, continue to mount, official figures showed today. The office for National Statistics said retail sales in June dropped by 3.9%.

GBP/USD managed to stretch to $1.9861 after printing lows around $1.9830. Offers now seen placed between $1.9890/00, more at $1.9920. Bids $1.9835/25, with stops placed on a break below $1.9820.

"The housing bubble, the credit crunch are the main cause of today's problems. A $126 oil price does not take this away as mortgage rates hit their highest levels in five years."

Resistance 3: Y109.00
Resistance 2: Y108.50
Resistance 1: Y107.80
Current price: Y107.62
Support 1: Y106.70
Support 2: Y106.00
Support 3: Y105.50
Comments: Dollar holds a bit below minor resistance is around Y107.80. Further rise may bring the rate to Y108.50 and Y109.00. Strong support comes at 50% Fibo level on Y106.70. Then the decline may extend to Tuesday’s low on Y106.00/05.

Resistance 3: Chf1.0520
Resistance 2: Chf1.0430
Resistance 1: Chf1.0380
Current price: Chf1.0364
Support 1: Chf1.0240
Support 2: Chf1.0180
Support 3: Chf1.0140
Comments: Dollar tested yesterday’s highs around Chf1.0380 and retreated. Break above will target Chf1.0420/30 and then - Chf1.0520. Strong support comes at 50% Fibo of yesterday’s rally on Chf1.0240. Below correction may extend to Chf1.0180 and stronger support on Chf1.0140 (Tuesday’s low).

Resistance 3: $2.0130
Resistance 2: $2.0070
Resistance 1: $1.9940
Current price: $1.9872
Support 1: $1.9830
Support 2: $1.9800
Support 3: $1.9760
Comments: Techs on pound hasn’t changed much. Resistance comes at hourly high on $1.9940. Above the rise may extend to $2.0070 (Jul 17 high). Strong zone is near $2.0130 (Jul 15 high). Support is around new session low on $1.9830. Below correction may dip to $1.9800/10.

Resistance 3:$1.5940
Resistance 2: $1.5800
Resistance 1: $1.5700
Current price: $1.5676
Support 1: $1.5630
Support 2: $1.5580
Support 3: $1.5520
Comments: Euro tries to rebound, but in general it remains under pressure. Support comes at session low on $1.5630. Below at $1.5580 and $1.5520. Resistance is around session high on $1.5700, further – near $1.5800. Stronger level is near $1.5940 (Tuesday’s high).

GBP/USD drops from above $1.9880 to $1.9840 on the initial react to release of weak UK retail sales data. Rate currently holds back around $1.9880. Bids have been reported in place between $1.9830/20, with offers now seen placed to $1.9850, more toward $1.9880 (broken support levels). A break below $1.9820 to open a deeper move toward $1.9780/70.

EUR/USD: $1.5710-25, $1.5550, $1.6000, $1.6050
USD/JPY: Y107.90, Y108.00, Y107.60, Y108.30, Y107.30, Y106.80
EUR/JPY: Y169.50
GBP/USD $1.9900
AUD/USD $0.9500

-- July flash manufacturing PMI 47.5 vs 48.7 in June
-- July flash composite PMI 47.8 vs 49.3 in June

- July Ifo current assessment 105.7 ( Jun 108.3)
- July Ifo business expectations 90.0 ( Jun 94.7)

The dollar traded near a one-month high against the yen after U.S. lawmakers approved a bill that allows Treasury Secretary Henry Paulson to bail out Fannie Mae and Freddie Mac.
The currency was also near a two-week high against the euro as a rally in financial stocks prompted traders to increase bets the Federal Reserve will raise interest rates. The New Zealand dollar fell to a six-month low after the country's central bank unexpectedly cut rates for the first time in five years.
``The rescue plan will give the dollar some measure of support,'' said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd., Japan's largest currency broker. ``It seems the U.S. government has avoided the worst-case scenario for Fannie and Freddie.''

EUR/USD traded within $1.5705- $1.5670.

GBP/USD consolidated within the $1.9955/85 range before fell to session low at $1.9920.

USD/JPY was stuck within Y107.65/00.

Eurozone May current account data is due at 0800GMT along with the flash PMI data for July. Services are seen slipping to 48.0 with manufacturing at 48.7.UK data sees retail sales for June at 0830GMT, which are expected to show a sharp -3.0% m/m decline with the y/y rate at +3.9%.

-- July flash manufacturing PMI 50.9 vs 52.6 in June

the Sep S&P contract was last up 0.80 points at 1283.20, with the Nasdaq Sep contract up 12.25 points at 1861.25.

Resistance 3: Y109.00
Resistance 2: Y108.50
Resistance 1: Y107.80

Current price: Y107.74
Support 1: Y106.70

Support 2: Y106.00
Support 3: Y105.50

Comments: Dollar holds higher with minor resistance is around Y107.80. Further rise may bring the rate to Y108.50 and Y109.00. Strong support comes at 50% Fibo level on Y106.70. Then the decline may extend to Tuesday’s low on Y106.00/05.

Resistance 3: Chf1.0520

Resistance 2: Chf1.0430
Resistance 1: Chf1.0380
Current price: Chf1.0383
Support 1: Chf1.0240
Support 2: Chf1.0180
Support 3: Chf1.0140

Comments: Dollar consolidates near yesterday’s highs around Chf1.0380, with a break above will target Chf1.0420/30 and then - Chf1.0520. Strong support comes at 50% Fibo of yesterday’s rally on Chf1.0240. Below correction may extend to Chf1.0180 and stronger support on Chf1.0140 (Tuesday’s low).

Resistance 3: $2.0130

Resistance 2: $2.0070

Resistance 1: $2.0030
Current price: $1.9963
Support 1: $1.9900
Support 2: $1.9840

Support 3: $1.9800

Comments: Despite yesterday’s sell-off, techs on sterling hasn’t changed. Resistance comes at $2.0030 with a break above will target $2.0070 (Jul 17 high). Stronger level comes at $2.0130 (Jul 15 high). Support is around yesterday’s lows on $1.9900. Below correction may extend to $1.9840 and $1.9800/10.

Resistance 3:$1.5940
Resistance 2: $1.5850
Resistance 1: $1.5800
Current price: $1.5691
Support 1: $1.5670
Support 2: $1.5610
Support 3: $1.5570

Comments: Euro remains under pressure after yesterday’s sell-off. Strong support is around resent low on $1.5670. Below rate may dip to stronger support around Jul 07 low on $1.5600/10. Minor resistance is around last session high on $1.5800 with a break above will point to 50% Fibo level of yesterday’s fall at $1.5850, then – Tuesday’s high on $1.5940.

Financial stocks also rallied following news of US legislation to rescue troubled mortgage companies Fannie Mae and Freddie Mac. The benchmark Shanghai Composite Index was up 39.50 points, or 1.39%, at 2,877.35.

High Low Close

Change % Change Last
Nikkei 225 +127.97 +1.0% 13,312.93
Topix +15.61 +1.2% 1,303.35
DAX 30 +93.30 +1.45% 6,536.09
САС 40 +81.48 +1.88% 4,408.74
FTSE 100 +85.80 +1.60% 5,449.90
Dow +29.88 +0.26% 11,632.38
Nasdaq +21.92 +0.95% 2,325.88
S&P +5.19 +0.41% 1,282.19
10YR +0.5100 +0.124% 4.148%
NYMEX Crude Oil -3.98 -3.10% 124.44
Gold -25.70 -2.71% 922.80

06:45 France Business confidence (July) 100.0 102.0
07:00 France PMI (July) flash 49.0 49.2
07:00 France PMI services (July) flash 49.7 50.1
07:30 Germany PMI (July) flash 52.0 52.6
07:30 Germany PMI services (July) flash 51.5 52.1
07:30 Italy Business confidence (July) - 87.1
08:00 Germany IFO business climate index (July) 100.3 101.3
08:00 EU(15) PMI (July) flash 48.7 49.2
08:00 EU(15) PMI services (July) flash 48.8 49.1
08:00 EU(15) Current account (May) adjusted, bln - -0.3
08:00 EU(15) Current account (May) unadjusted, bln - -9.2
08:30 UK Retail sales (June) -3.0% 3.5%
08:30 UK Retail sales (June) Y/Y 3.9% 8.1%
12:30 USA Jobless claims (week to 19.07) 372K 366K
14:00 USA Existing home sales (June), mln 4.97 4.99
20:30 USA M2 money supply (14.07), bln - +24.5
23:30 Japan Nationwide CPI (June) - 0.8%
23:30 Japan Nationwide CPI (June) Y/Y - 1.3%
23:30 Japan Nationwide CPI ex fresh food (June) Y/Y - 1.5%
23:30 Japan Tokyo-area CPI (July) - 0.3%
23:30 Japan Tokyo-area CPI (July) Y/Y - 1.5%
23:30 Japan Tokyo-area CPI ex fresh food (July) Y/Y - 1.3%