Intraday Market Update
Decent economic data and good earnings reports from Wal-Mart and Home Depot are helping lift equities higher today. The Producer Price Index report showed that wholesale prices rose for the first time since March which is keeping deflation fears in check. Meanwhile, the July industrial production data returned to growth after a flat reading in June, but housing starts and building permits both declined more than expected. All of the major indexes have gained +1.50% or more and are consolidating near their highs of the day. The Russell 2000 is leading (+2.3%) while the DJIA is lagging (+1.60%). Today's rally is broad and deep as all 20 core sectors have gained more than +1% with 10 gaining more than +2%. Overseas, Asian markets were mixed to slightly higher, while all major European markets closed sharply higher after shrugging off a lackluster investor confidence report in Germany.

In earnings news, big retailers Wal-Mart, Home Depot and TJX Companies reported earnings that were in-line with estimates before the bell this morning. Wal-Mart's guidance was a bit light and their CEO said the slow economic recovery would continue to make the company's customers very cautious. Home Depot cut its full year revenue outlook slightly and warned that the current economic softness was making the company's view of the second half of 2010 more conservative. TJX boosted its full year guidance. Elsewhere, Abercrombie & Fitch (ANF) and Saks (SKS) reported earnings ahead of expectations. Saks beat on the top and bottom line, while ANF's losses were less than expected. WMT is up +2%, HD is up nearly +5%, TJX is up +2%, SKS is up +4%, while ANF is down -6%.

Names in the fertilizer industry are catching a huge bid today after Potash (POT) said that BHP Billiton offered an unsolicited acquisition proposal of $130 per share. POT's board rejected the proposal citing it as "grossly inadequate." Executives said the offer "does not even come close" to the value of Potash Corp, adding that the company had "unparalleled growth prospects," and insisted that the industry is on the verge of demand inflection. POT is up +26% on the news and other potash names are also catching a bid, including IPI, MOS, and CF surging +7 to +9% in the session.

Core Sector List:
Overall reading: 20 sectors advancing, 0 sectors declining
Strongest Sectors: Coal, Transportation, Real Estate, Home Construction
Weakest Sectors: NONE


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