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Stock Market Update for 09/10/2010

September 10, 2010

Stocks are mostly on the upside in mid-morning trading on Friday, as the markets are digesting a much sharper than expected increase in wholesale inventories while awaiting economic commentary from the White House.

The Dow is up by 30.88 points or 0.3 percent at 10,446.12, the Nasdaq is up by 7.75 points or 0.4 percent at 2,243.95 and the S&P 500 is up by 4.85 points or 0.4 percent at 1,109.25.

A short time ago, the Commerce Department released a report showing that wholesale inventories rose by 1.3 percent in July, while economists had expected a much more tame increase of 0.4 percent. July’s headline figure marked the sharpest increase in inventories since the 1.5 percent jump in July of 2008. The report also showed that wholesale sales rose by 0.6 percent.

At 11:00 a.m. ET, market attention is likely to turn to the White House, where President Barack Obama is scheduled to issue some economic commentary. The President is expected to announce the appointment of Austan Goolsbee to the position of Chairman of Economic Advisers following the departure of Christina Romer.

In global economic news, official data released from China revealed that the country’s trade surplus narrowed in August as import growth picked up at a faster pace and export growth slowed. As per the report, China’s trade surplus dropped to $20 billion in August from an 18-month high of $28.7 billion in the previous month.

In Japan, the Cabinet Office revealed that the country’s gross domestic product or GDP for the second quarter was revised higher to 0.4 percent, topping last month’s preliminary reading of 0.1 percent increase. The report further noted that, on an annualized basis, GDP jumped 1.5 percent, blowing past the preliminary reading that showed a 0.4 percent gain.

In corporate news, chipmaker Texas Instruments Inc. (TXN) narrowed its earnings and revenue outlook for the third quarter, but maintained the midpoint of the forecast ranges. The company now expects earnings in a range of $0.66 to $0.72 per share, compared to its prior estimate of $0.64 to $0.74 per share.

TI’s current forecast comes as a bellwether, indicating that the recent global rebound in the worldwide chip market has started waning.

Chipmaker National Semiconductor Corp. (NSM) said that its first quarter profit nearly tripled from last year, helped by higher sales and improved margins. The company’s quarterly earnings per share also came in above analyst expectations but the firm forecast second quarter sales below consensus estimates.

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