Early strength was triggered by solid earnings in a few names including CSCO, which helped the NAZ outperform. Also some carryover momentum amid this weeks strong recovery was in play. It was green all round, however, we fell prey to some mid-afternoon profit taking near the 50 MA. The volatility that ensued was more typical of rumor/program driven action but it's hard to know for sure. Although the downdraft was very disappointing, the late day rebound leaves the door open for additional near term progress as long as we can hold the afternoon lows.

Companies moving in after hours trading in reaction to earnings: Trading Up: BFLY +12.2%; KNOT +11.4%; SYX +11.1%; TELK +9.1%; RWT +6.2%; ISV +5.5%; RCMT +5.3%; EPAY +4.4%; IDSA +4.4%; SRVY +3.9%; FOE +3.8%; EXLS +3.7%; VNUS +3.5%; JUPM +3.1%; PRSC +2.5%; DCEL +2.3%; STRS +2.2%; HLS +2.0%; LORL +1.6%; XOMA +1.4%; GDP +1.4%; XRM +1.3%; TKC +1.3%; STKL +1.1%; LBTYA +1.1%; ARP +1.0%... Trading Down: AIRN -24.9%; OMRI -21.3%; CIA -12.7%; INSP -10.1%; NSTK -9.3%; IO -9.3%; NKTR -8.9%; COSI -7.4%; UHAL -6.6%; GGC -6.4%; CELL -6.3%; CNIC -5.8%; CENT -5.6%; INWK -5.3%; TOA -5.1%; CECO -4.6%; TBSI -4.5%; DESC -4.4%; KPPC -4.2%; KNXA -4.3%; ACF -3.8%; PDII -3.0%; VITL -2.6%; NP -2.4%; ARBX -2.1%; AAP -2.1%; AVRX -2.0%; TRCI -1.9%; VHI -1.8%; BNE -1.6%; BFS -1.5%; WEDC -1.4%; IPAS -1.4%; QLTY -1.3%; SEB -1.3%; MEAS -1.2%; ISIS -1.1%... Companies moving in reaction to news: Trading Up: SUF +12.5% (commissions 30,000 bpd of crude capacity in Fujairah, UAE); AOB +9.4% (enters into a legally binding letter of intent to acquire Guangxi Boke Pharmaceutical Company); BBI +8.8% (acquires Movielink); ABI +6.6% (retains Morgan Stanley to explore potential corporate restructuring; Increases stock repurchase authorization to $1.2 bln); FSYS +5.9% (sees FY07 EPS above consensus); SFY +3.7% (Lake Washington production not affected by area pipeline disruption); HOTT +2.8% (reports July same store sales fell 7.4% y/y); CGI +1.9% (and Commerce Banc Insurance services reach comprehensive agreement); PNCL +1.9% (announces $30 mln share repurchase program); EMMS +1.9% (announced that the co's Board of Directors has authorized the repurchase of its common stock, up to an aggregate value of $50 mln); ABBI +1.5% (launches Doxorubicin Hydrochloride Injection, USP); SMHG +1.0% (announces postponement of Q2 earnings teleconference)... Trading Down: CTRN -13.3% (reports prelim revs; sees Q2 EPS below consensus); MRGE -7.4% (to delay announcement of Q2 2007 earnings); RSTO -6.0% (guides JulQ below consensus; cites challenging home furnishings environment); SCT -4.8% (Q2 2007 release of earnings and earnings call to be rescheduled to Aug 14 from Aug 9); SALM -3.8% (announces A special cash dividend of $0.42 per share); TRCA -3.5% (receives marketing approval for Increlex in the European Union); IPCS -3.5% (hires Conrad Hunter as COO and Executive VP); ZUMZ -2.4% (reports July same store sales +9.7%); VSCN -2.8% (reports option grants under Nasdaq marketplace rule 4350); SFD -1.8% (confirms classical swine fever in Romania; outbreaks will negatively impact fiscal Q2 operating results by $4-5 mln); USAK -1.4% (comments on jury verdict in contract dispute).