DARTLINE™ – INVESTMENT MESSAGE BOARD

July 29, 2010, 7:00 am EDT .. The Standard and Poor’s 500 index futures are up 6.20 to 1108.30, as the FTSE 100 index of leading British shares was up 33.11 points, or 0.6 percent, at 5,352.79, Germany’s DAX rose 33.33 points, or 0.5 percent, to 6,212.27 and CAC-40 was 16.28 points, or 0.4 percent, higher at 3,686.64. Meanwhile, The euro broke out of its recent tight trading range against the dollar as the combination of strong continent earnings and economic news helped currency. The euro was $1.3087, its highest level since May 4. … Germany, Europe’s largest economy, is seemingly doing particularly well — figures Thursday showed the number of unemployed fell on a seasonally adjusted basis for the 13th month running. Figures from the European Commission, meanwhile, showed that economic conditions across the eurozone improved further. Its economic sentiment indicator (ESI) rose to 101.3 points in July from 99 in June. Most analysts were not expecting much of a change. … The U.S. Federal Reserve said in its monthly assessment into the U.S. economy that “activity has continued to increase, on balance, since the previous survey.” From very weak to weak — must be the new normal? Apparently the catalyst behind the latest euro advance was the pessimistic economic assessment from the U.S. Federal Reserve. In its monthly Beige Book, an assessment of economic conditions around the regions, the Fed added to market concerns that the U.S. economy lost momentum in the middle part of the year. Moreover, the Commerce Department reported that orders for big-ticket items, known as durable goods, unexpectedly fell in June for the second month running. Over the last few weeks, the economic data has underperformed market expectations, leading to concerns that the world’s largest economy is not recovering from recession as easily as imagined and that the Fed will not be raising interest rates anytime soon. … Earlier in Asia, Japan’s Nikkei 225 stock average fell 0.6 percent to 9,696.02 as investors locked in profits following a 2.7 percent jump the previous day. South Korea’s Kospi eased 0.2 percent to 1,770.88 while Hong Kong’s Hang Seng index was steady at 21,093.82. Australia’s S&P/ASX 200 dropped 0.1 percent to 4,524.1 on weakness in banks. Benchmarks in China, Taiwan, Indonesia and Singapore rose. … Benchmark crude for September delivery was up 23 cents at $77.22 a barrel in electronic trading on the New York Mercantile Exchange. … With the S&P 500 index futures above interim resistance of 1,117.51, the index would test 1136.93 (May 17th level) in the near term. However, low volume and exaggerated swings, stocks are being driven by earnings plays and plain vanilla manipulation. Don’t fight the tape, but remain cautious since no new money was added to the July advance in stock prices.