Watch For This Momentum To Carry Over

In economic news, the producer price index rose 0.1%,
showing no threat of inflation for the market. Most economists were looking for
no change in the number. The core reading, which removes the food and energy
components, gained 0.2% vs. the expected 0.1%.

Market breadth was mixed,
with NYSE declining issues over advancing issues by a ratio of 1.72, and up 
volume over down volume by a 1.21 ratio. Nasdaq declining issues over advancing
issues came in at 1.43, and up volume beat down volume by a 3.90 ratio. The
VIX
was down 0.47 at 38.55. The TRIN
was down 1.54 at 0.51.

Discount retailers posted better than expected results with Wal-Mart (WMT),
up 0.78% at 54.18,  increasing its earnings guidance for its quarter ending
in July to 44 cents to 45 cents a share vs. previous expectations of 43 cents to
44 cents a share. Also, Target
(
TGT |
Quote |
Chart |
News |
PowerRating), up 0.19% at 36.90, said their
same store sales grew 4.9% for the five weeks ending July 6.

It wasn’t all positive reporting in the retail sector as The Gap
(
GPS |
Quote |
Chart |
News |
PowerRating),
down 4.71% at 13.94, said that same store sales were off 6% for the five week
period ending July 6. J.C. Penny
(
JCP |
Quote |
Chart |
News |
PowerRating), down 2.82% at 18.60,
announced that same store sales fell 0.3% for the five weeks ending June 29. Federated
Department Stores
(
FD |
Quote |
Chart |
News |
PowerRating) was up 1.77% at 38.42.

Photography company Eastman Kodak (EK),
up 11.03% at 29.58, raised its second-quarter earnings guidance to approximately
85 cents a share vs. Multex consensus of 63 cents a share, citing improved
manufacturing productivity and operational performance.

The pharmaceutical sector came under pressure again as Bristol-Myers
Squibb (BMY),
down 4.49% at 22.11, was reported by the Financial Times to be the target of a
SEC investigation over $1 billion in questionable revenues recorded last year.

Also in the drug business, Abbott Laboratories
(
ABT |
Quote |
Chart |
News |
PowerRating), down 5.97%
at 31.65, matched its second-quarter earnings expectations and confirmed its
full-year earnings forecast. Pfizer
(
PFE |
Quote |
Chart |
News |
PowerRating), up 5.05% at 32.60, moved
up after it announced it entered an agreement with Switzerland’s Serono
(
SRA |
Quote |
Chart |
News |
PowerRating),
up 8.86% at 15.60. ICN Pharmaceuticals
(
ICN |
Quote |
Chart |
News |
PowerRating), down 53.38% at 9.30,
fell after it warned on its second-quarter earnings. Also, MedImmune
(
MEDI |
Quote |
Chart |
News |
PowerRating),
up 15.92% at 24.46, rose after it was released that the FDA. responded to the
company’s application to market a spray flu vaccine with no additional testing
requested.

Software and programming companies Network Associates
(
NET |
Quote |
Chart |
News |
PowerRating), down
18.36% at 14.45, fell after it lowered its third-quarter sales and profit
targets.

Communications services Verizon (VZ),
up 4.15% at 37.60 was reported by the Wall Street Journal to be the target of a
law suit by Northpoint Communications who is seeking $1 billion for a wrongly
terminated $800 million acquisition pact.

Internet portal Yahoo!
(
YHOO |
Quote |
Chart |
News |
PowerRating), up 5.98% at 12.92, has been
downgraded by Merrill Lynch to “reduce-sell/long-term neutral” from
“neutral/strong buy” on the belief that the company’s fundamentals do
not support its valuation.