US Equities
US stocks rose after orders for durable goods unexpectedly advanced in July and investor concerns related to Fannie Mae and Freddie Mac abated.

Advancing stocks outnumbered declining ones on the NYSE by about 3 to 1 while on the Nasdaq, advancers beat decliners by about 2 to 1.

Investor sentiment was boosted by the release of data which showed that new orders for big manufactured items unexpectedly increased 1.3% in July. Boeing shares added almost 2% after the data showed a 28% rise in orders for civilian aircraft.

Energy shares gained on higher oil prices. ConocoPhillips rose 1.3%, Chevron gained 1.0%, and Exxon Mobil added 0.7%.

Valero Energy, Tesero, and Sunoco, the biggest US petroleum refiners, rose more than 4% and were the leading advancers in the S&P 500 Energy Index. The gains came as profit margins on processing oil into gasoline and heating oil advanced 6.8%.

Alcoa, the world’s largest aluminium producer, added 1.5%. The company said it will lay off 300 employees starting from 31 August to offset high energy costs.

Higher crude prices dragged down shares in airlines. AMR Corp, parent of American Airlines, fell 2.7%. UAL Corp, parent of United Airlines, dropped 11%. Northwest Airlines slid 8.3% and Delta Airlines slumped 7.8%.

Fannie Mae and Freddie Mac rallied for a third straight day as investors grew more confident that there would not be a government bailout that would wipe out their equity. Fannie Mae surged 15.3% while Freddie Mac jumped 19.1%.

Big US banks and financial companies also gained. Shares of Bank of America rose 2.2%. Lehman Brothers gained 5.4%.

Shares of Amylin Pharmaceuticals fell almost 25% on news that its diabetes drug, Byetta, was linked to four more deaths, adding to the two deaths announced by federal regulators last week.

Bristol-Myers Squibb and Pfizer fell 2.1% and 1%, respectively, after the companies said their blood clot preventer apixaban failed in its trials.

Cell Genesys plunged 72%. The company said it stopped a late-stage trial of its prostate cancer therapy, GVAX, after 20 more deaths were reported in patients on the drug versus those on a dummy treatment.

Bookstore chain Borders increased 19% after reporting a narrower second-quarter loss than expected.

QuickSilver added 11% after the maker of sports clothing and footwear said it received an offer for its ski-equipment unit Rossignol Group for US$147M.

New housing data was released, which showed that sales continued to fall in July, though at a slower rate than in June.
 

Other International Markets
European stocks advanced after a report showed orders for US durable goods unexpectedly increased in July and higher commodity prices boosted the profit outlooks for energy and metal producers.

National benchmark indexes gained in 11 of the 18 western European markets. Germany's DAX sank 0.3%. France's CAC 40 advanced 0.1% and the UK's FTSE 100 added 1.1%.

Higher crude prices lifted energy stocks. Royal Dutch Shell climbed 2.3% and BP was up 1.8%. Total SA gained 1%.

Mining stocks tracked base and precious metal prices higher. Andofagasta rose 3.9% after posting an 8.8% rise in its first-half profit as higher copper output and prices outweighed rising costs.

Stock markets got a lift in the afternoon from the US durable goods data.

Banks were mixed. Anglo Irish Bank surged 8.7%, British mortgage lender HBOS gained 2.8% and Royal Bank of Scotland added 1.8%. French group Natxis slipped 4.9% and Swiss bank UBS fell 1.3%.

Shares in Dutch brewer Heineken rose 1.8% after it reported 17% rise in first-half operating profit.

German travel and shipping group TUI dropped 2.4% on worries about declining shipping conditions. But Danish shipping and oil conglomerate Moeller, which runs the world’s biggest container shipping line, reported higher than expected first-half profit and raised its full-year outlook, sending its shares up 7%.

AAB, the world’s largest builder of power networks, jumped 2.8%. BAE Systems, Europe’s biggest defence contractor, climbed 3.6%.

Irish Life & Permanent jumped 6.8%. Ireland’s largest mortgage lender said it has no plans to raise capital from investors even after first-half profit fell 88%.

Taylor Wimpey, UK’s largest homebuilder, lost 7.2%. The company booked a first half loss of 1.42B pounds after writing down the value of its land.

Baloise Holding, Switzerland’s third-biggest insurer, fell 7.9%. Profit dropped 42% in the first half, worse than analysts had expected.

Scor SE, France’s biggest reinsurer, climbed 1.6%. The company said first-half net income rose 24%, surpassing analysts’ estimates.

Commodities
Oil prices rose for the third straight day on fears that Tropical Storm Gustav could interrupt oil and natural gas output in the Gulf of Mexico. Prices also rose after a government report showed that US gasoline supplies dropped for a fifth week. Gasoline stockpiles fell 1.18M barrels to 195.4M barrels, the Energy Department said in its weekly report.

Gold rose for a second straight day as energy costs surged and the dollar weakened against the euro, boosting the appeal of the precious metal as a hedge against inflation. Silver fell.

Cotton reached its highest price in almost two weeks as the dollar's decline trimmed costs for buyers using other currencies and Tropical Storm Gustav headed for the US Gulf Coast, which includes top cotton-producing states Texas, Alabama and Louisiana.