The PremiereTrade Market Wrap for 10/17/07

U.S. economic activity has slowed over the six weeks, according to the latest Beige Book report on current economic conditions released by the Federal Reserve. Anecdotal reports from the 12 Fed districts "suggest economic activity continued to expand in all districts in September and early October but the pace of growth decelerated since August."

Prices paid by U.S. consumers rose more than forecast in September as food and energy costs climbed, while core measures showed inflation remains contained. The 0.3 percent increase followed a 0.1 percent decline in August prompted by falling oil prices. The core CPI rose 0.2 percent for a second month, in line with forecasts.

U.S. home builders continued to cut back construction in September, starting construction on the fewest number of new homes in more than 14 years. Housing starts fell 10.2% to a seasonally adjusted annual rate of 1.19 million, the lowest since 1.32 million in March 1993.

The International Monetary Fund lowered its projection for the global expansion next year to 4.8 percent in its semiannual World Economic Outlook, from an estimate of 5.2 percent in July. A weaker outlook for the U.S. was mostly to blame, as the fund reduced its forecast to 1.9 percent, from 2.8 percent.

The government announced that starting in January; Social Security benefits for nearly 50 million Americans are going up 2.3 percent, the smallest increase in four years. It will mean an extra $24 per month in the average check.

In Earnings News

Altria Group Inc. (MO), the world's largest tobacco company, said profit exceeded analysts' estimates on higher cigarette prices and top-selling Marlboro's growing share of smokers. It raised its full-year forecast. Third-quarter profit adjusted for Altria's spinoff of Kraft Foods Inc. increased 19 percent to $2.63 billion, or $1.24 a share.

Coca-Cola Co. (KO), said income increased 13 percent to $1.65 billion, or 71 cents a share. Sales jumped 19 percent to $7.69 billion.

JPMorgan Chase & Co. (JPM) reported income increased to $3.4 billion, or 97 cents a share, in the third.

United Technologies Corp.'s (UTX) said earnings rose to $1.2 billion, or $1.21 a share, up from $996 million, or 99 cents, earned in the year-ago period.

Gannett Co. (GCI), reported earnings fell 11 percent, as revenue slipped from a year-ago period boosted by spending on political advertising. Analysts expected profit of $1 per share.

Intel Corp.'s (INTC) soaring sales of microprocessors helped the company overcome flat prices for those chips and reap a 43 percent boost in profits in the third quarter.

Scheduled Economic Reports (Thursday)

Initial Jobless Claims (Week of October 13), Leading Indicators (Sep), Philly Fed Index (Oct)

Scheduled Earnings Reports (Thursday)

Bank of America, Dow Jones, Pfizer, Advanced Micro Devices, Hershey, Capital One, Eli Lilly, Southwest Airlines

Stocks in the News

CSX Corp (CSX) posted a third-quarter profit of $407 million, or 91 cents a share.

IBM (IBM) reported a third-quarter profit from continuing operations of $2.36 billion, or $1.68 a share, on $24.12 billion in revenue.

Apple Inc (AAPL) said that it cut the price of its iTunes Plus tracks to 99 cents each and expanded the iTunes Plus catalog to more than 2 million songs. iTunes Plus music is of higher digital quality and is DRM-free with no personal use restrictions users are accustomed to with the traditional iTunes catalog.