The PremiereTrade Market Wrap for 10/24/07

Demand for previously owned homes fell more than expected in September amid continued problems in the mortgage market, with single-family sales hitting their lowest sales pace in nearly 10 years. Overall home resales declined to a 5.04 million annual rate. Inventories of homes rose 0.4%, which represents a 10.5-month supply at the current sales pace.

Japan's trade surplus climbed a higher-than-expected 62.7% in September from a year earlier, as continuing strong export growth to Asia and Europe offset weaker U.S. demand. Exports rose 6.5% in September from a year earlier.

Microsoft Corp. (MSFT) has withdrawn the two remaining appeals related to a European Union antitrust order that it now says it will stop fighting. The company has formally dropped an appeal against the 280.5 million euros ($364 million) in fines levied by the EU in July 2006.

Billionaire Warren Buffett believes investors should be ``cautious'' about China's stocks after the country's benchmark index more than doubled this year. Buffett this month said Berkshire had sold its stake in PetroChina Co., which has actually risen 76 percent this year.

Merrill Lynch & Co. (MER) reported its first quarterly loss in six years after a larger-than-forecast $7.9 billion of write downs for subprime mortgages and asset- backed bonds. Merrill?s third-quarter loss was $2.24 billion, or $2.82 a share.

In Forex News Today

The dollar was up against the euro and lower against the yen after Merrill Lynch's huge third-quarter losses were not as bad as investors had feared. Analysts said the dollar was helped by rising risk aversion, which encouraged investors to cut local market risk positions and switch back to dollars. Risk aversion also prompted the unwinding of yen-funded carry trades, in which investors borrow in a low-yielding currency to buy higher yielding assets elsewhere.

Analysts believe that in order to keep the bullish environment for high-yielding and emerging market currencies intact, US inflation rates and the asset backed security market needed to be watched carefully. They say the dollar is increasingly being used as a funding currency. However, if US inflation rises too quickly too early, potentially freezing further US interest rate cuts, the US will likely fall into recession, putting the entire global growth outlook at risk.

Scheduled Economic Reports (Wednesday)

Initial Jobless Claims (Week of October 20th), Durable Goods Orders (Sep), New Home Sales (Sep)

In Earnings News

Boeing (BA) reported that its third-quarter profit climbed 61 percent, thanks to higher commercial airplane deliveries and growth in its defense business. For the quarter ending Sept. 30, Boeing's profit rose to $1.1 billion, or $1.44 per share, up from $694 million, or 89 cents, a year ago.

General Dynamics Corp. (GD), the largest maker of armored vehicles for the U.S. military, said third-quarter profit gained 24 percent as it sold more blast-resistant trucks and armored transports for the war in Iraq. Profit from continuing operations climbed to $544 million or $1.34 a share, from $440 million, or $1.08, a year earlier

Taser International Inc. (TASR) reported its third-quarter profit more than doubled as sales surged and the company paid lower taxes. The company earned $6.2 million, or 9 cents per share. Analysts expected a profit of 5 cents per share on $23.7 million in revenue.

Scheduled Earnings Reports (Thursday)

Microsoft, DaimlerChrysler, Motorola, XM Satellite Radio, Frontier Airlines, Wendy?s International, Bristol Myers Squibb, Dow Chemical, Ericsson, Honda, Raytheon, US Airways

Stocks in the News

Amazon.com (AMZN) third-quarter earnings topped expectations, quadrupling from a year earlier to $80 million, or 19 cents a share.

Aflac (AFL) reported third-quarter profit rose to $420 million, or 85 cents a share, from $367 million, or 73 cents, in the year-ago period.

Children?s Place Retail Stores (PLCE) said that it has engaged Lehman Brothers as its financial adviser while it undertakes a review of its strategic options.

And Juniper Networks (JNPR) reported fiscal third-quarter profit rose 46% from the year-earlier period, amid strong sales of its networking equipment.