Google: Wide Swings After The Close–Here’s Why

Stocks fell after China made an important
announcement regarding its currency.

China said it would no longer peg the yuan and will tie its currency
to a basket of currencies, a possible first step to letting the yuan float
freely. The yuan is up 2%. The move is long anticipated, as China’s trading
partners–especially the U.S.–have put pressure to let the yuan float. The move
could reduce competition for U.S. firms and raise import prices.  Remember
also, Beijing hosts the Olympics in 2008. Most Asian currencies were higher
today in sympathy with the yuan.  Oil was

Who benefits from a floating yuan?  Analysts feel that rates may be
moving higher, which is not good for homebuilders. A stronger yuan could also
increase exporters’ sales. Caterpillar is
one stock that may benefit from the yuan devaluation. Commodity stocks rose. on
the theory that they may be cheaper for China to buy. Tech imports may become
more expensive.  Retail stocks may be hit as they buy raw materials in
China.  Another way to play the yuan is to buy stocks which sell dollar
based commodities, like metals.

Jobless claims for the week of 7/16 fell 34,000 to 303,000. The 4-week moving
average fell 3250 to 318,000.

After the close, Google
(
GOOG |
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$890 million, above estimates and up 98%. The stock swung $27 in after hours
trading. Microsoft
(
MSFT |
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vs a $10.17 estimate.

Caterpillar
(
CAT |
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SBC Communications
(
SBC |
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were also higher.  Q2

Ebay
(
EBAY |
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billion.

United Parcel Service
(
UPS |
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Maidenform (MFD) is pricing tonight, 10 million shares between $15 –
$16.

Strong sectors were:  Gold
(
HUI.X |
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Internet
(
$GIN.X |
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Weak sectors were:   Healthcare
(
$HMO.X |
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(
$XAL.X |
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Semis
(
$SOX.X |
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Coca-Cola
(
KO |
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billion in shares in 2005; in Q2 it bought back $1 billion.

Schering Plough
(
SGP |
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Qualcomm
(
QCOM |
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Allstate
(
ALL |
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11%.

DR Horton
(
DHI |
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forecast.

Washington Mutual
(
WM |
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