Market Analysis

Bonds improved yesterday but are under pressure this morning.  Stocks move higher in early morning trading, with the Dow currently up approx 200 points.  The market was spooked yesterday by Fed Chairman Bernanke's comments about the economic outlook being "unusually uncertain."  This morning though stocks are responding to strong quarterly earnings reports from Caterpillar, 3M, UPS, Xerox and Ebay.  Also European economic data has been positive.  The composite purchasing managers index, which includes manufacturing as well as service industries in Europe, rose to 56.7 in July from 56.0 in June, instead of falling to 55.2 as expected. Also, euro-zone industrial orders showed a 3.8% rise in May vs expectations for no change.

In economic news in the US, Existing Home Sales in June fell to an annualized pace of 5.37 million which was better than the 5.09 pace expected.  Initial Jobless Claims for the week ended 7/17/10 were up to 464,000 vs expectations for an increase to 445,000 from a revised 427,000 the prior week.  Continuing Claims were down to 4.487 million which was much lower than the 4.6 million expected.  In separate news, the Conference Board's June Leading Indicators was down by .2% which was better than the .4% decline expected.