LONDON (ShareCast) - US equities bounced back from Monday's setback, with the bulls once again banking on some further monetary easing from the Federal Reserve to push prices higher.

Gains were tempered by the fact that investors have half an eye out for tomorrow morning’s expected announcement from Germany’s Constitutional Court regarding the legality of Europe’s so-called European Stability Mechanism, not to mention Thursday's Fed meeting outcome.

Ratings agency Moody’s was also a downer on proceedings, after it warned of the need for the US Congress to take action to contain the country’s worrisome financial situation.

Morgan Stanley raises stake in Citigroup joint-venture

Morgan Stanley will acquire 14% of its brokerage joint-venture from Citigroup at a significant discount to Citigroup’s own valuation of the unit. The terms value the brokerage at $13.5bn, some two-fifths below an earlier valuation put on the business by Citi.

Fast food chain McDonald’s eased back despite announcing a 3.7% rise in its global same-stores sales for August.

Money manager Legg Mason’s Chief Executive Officer and Chairman, Mark Fetting, is to quit both roles at the beginning of next month, but will stay on in an advisory capacity for the rest of this year.

Computer chip maker Advanced Micro Devices (AMD) clawed back recent losses after revealing it has bought a stake in CiiNOW, a technology company that specialises in providing platforms for cloud-based online games.

Energy stocks were wanted, as commodity prices headed higher. Alpha Natural Resources, Cliffs Natural Resources and Cabot Oil and Gas were tucked in just behind AMD at the top of the S&P leader board.

First Solar was a bright spot on news that it has inked a contact with PG&E.

Organic fair trade gourmet coffee provider Green Mountain Coffee Roasters perked up after Italian coffee brand Luigi Lavazza said in a filing after the market closed yesterday that it increased its stake in the US firm to 6.8%.

Goldman Sachs has downgraded Bristol Myers Squibb to "buy" from "conviction buy". The US pharmaceuticals giant signed a deal to license UK drug discovery company Summit's proprietary Seglin technology to identify and develop drug candidates for up to ten targets across multiple therapeutic areas. Summit will receive a $100,000 technology access fee and is eligible for research, development and regulatory milestones of up to $30m per product, plus royalties on worldwide sales of products arising from the technology.

The profit warning by British luxury brand Burberry had repercussions across the Atlantic, where fashion firm Ralph Lauren was one of the worst performing blue-chips. Expensive handbag maker Coach also came off the rails,

Small business hiring intentions climb

The US trade deficit fell by 0.2% month-on-month in July, to $42bn (Consensus: $43.5bn). Exports declined by 1% while imports dipped by 0.8% month-on-month.

The NFIB small business sentiment index rose by 1.7 points in August, to 92.9, its first increase since April.

According to economists at Barclays Research: "The net percentage expecting improved credit conditions also fell to -9% from -7%. As has been the case in recent months, taxes (23% of respondents), poor sales (20%), and government red tape (21%) were the issues most frequently reported as the single most important problem for small businesses. On the whole, while it is hard to read too much into any one report, it is especially encouraging to see the improvements in the economic outlook and hiring sentiment."

Same-store US retail sales grew by 1.0% week-on-week.

West Texas crude futures firmer

Front month West Texas crude futures rose by 63 cents to $96.92 a barrel on the NYMEX.

10 year US Treasuries were down by 27/64 dollars with yields at 1.70%.

S&P 500 - Risers
Advanced Micro Devices Inc. (AMD) $3.75 +8.07%
Alpha Natural Res (ANR) $7.45 +7.66%
Cliffs Natural Resources Inc. (CLF) $41.68 +6.38%
Cabot Oil & Gas Corp. (COG) $44.51 +5.70%
Legg Mason Inc. (LM) $26.85 +5.42%
Bank of America Corp. (BAC) $9.03 +5.24%
DeVry Inc. (DV) $21.65 +5.15%
Southwestern Energy Co. (SWN) $34.16 +5.11%
First Solar Inc. (FSLR) $21.80 +4.86%
Denbury Resources Inc. (DNR) $16.68 +4.64%

S&P 500 - Fallers
Sprint Nextel Corporation (S) $5.00 -2.91%
Ralph Lauren Corp (RL) $156.22 -2.55%
Rockwell Automation Inc. (ROK) $70.83 -2.22%
Southwest Airlines Co. (LUV) $8.95 -2.19%
Red Hat Inc. (RHT) $57.18 -2.12%
Dollar Tree Stores Inc. (DLTR) $46.42 -2.09%
Lorillard Inc. (LO) $121.00 -2.07%
Whole Foods Market Inc. (WFM) $95.90 -1.92%
Macy's Inc. (M) $39.27 -1.80%
Coach Inc. (COH) $61.48 -1.79%

Dow Jones I.A - Risers
Bank of America Corp. (BAC) $9.03 +5.24%
Alcoa Inc. (AA) $9.33 +3.09%
Hewlett-Packard Co. (HPQ) $17.95 +2.98%
Travelers Company Inc. (TRV) $66.95 +2.51%
JP Morgan Chase & Co. (JPM) $39.60 +2.17%

Dow Jones I.A - Fallers
Kraft Foods Inc. (KFT) $39.77 -1.09%
Home Depot Inc. (HD) $56.72 -1.01%
Cisco Systems Inc. (CSCO) $19.04 -0.57%
American Express Co. (AXP) $57.23 -0.50%
Procter & Gamble Co. (PG) $68.26 -0.36%
McDonald's Corp. (MCD) $91.20 -0.11%

Nasdaq 100 - Risers
Green Mountain Coffee Roasters Inc. (GMCR) $32.16 +5.93%
Research in Motion Ltd. (RIMM) $7.46 +4.34%
Apollo Group Inc. (APOL) $28.74 +2.53%
Netflix Inc. (NFLX) $57.16 +2.22%
Expedia Inc. (EXPE) $53.79 +1.97%
Nuance Communications Inc. (NUAN) $24.84 +1.72%
Wynn Resorts Ltd. (WYNN) $104.80 +1.66%
Priceline.Com Inc. (PCLN) $617.76 +1.55%

Nasdaq 100 - Fallers
Dollar Tree Stores Inc. (DLTR) $46.42 -2.09%
Whole Foods Market Inc. (WFM) $95.90 -1.92%
Intuitive Surgical Inc. (ISRG) $487.41 -1.57%
Monster Beverage Corp (MNST) $56.36 -1.50%


JH

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