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Date: Wednesday 20 Aug 2008

LONDON (ShareCast) - US stocks are slightly higher in early dealings as good results from computer maker Hewlett Packard offset ongoing concerns over the health of the financial market.

After the closing bell yesterday, HP posted third quarter earnings that topped estimates. The world's largest personal-computer maker said profit jumped 14% in the period thanks to higher laptop sales.

In other earnings news, BJ's Wholesale Club reported a slight increase in second quarter earnings and raised its full-year earnings forecast. Net income rose to $36.5m in the quarter to 2 August compared with $36.3m last time. The period included income of $2m of favourable state income tax audit settlements.

Total sales increased by 17.9% to $2.65bn, while comparable club sales increased by 15.5%, including a contribution from sales of gasoline of 8.1%. BJ's raised its earnings guidance for the full year to between $2.10 and $2.20 per diluted share from a previous guidance in the range of $2.04 to $2.14 per diluted share.

Banks are among the main fallers after Goldman Sachs cut third-quarter and full-year earnings estimates on Morgan Stanley, Lehman Brothers, JP Morgan and Merrill Lynch.

Meanwhile, Fannie Mae and Freddie Mac plunged again on worries that the government will have to take over the mortgage financiers.

The Dow Jones is up 27 points to 11,376 with the Nasdaq 10 points higher at 2395. The S&P 500 rose up 4 points.

Crude prices continue to creep forward with a barrel of oil up to over $116 a barrel.

In economic news, mortgage applications declined by 1.5% last week despite a drop in interest rates. The Mortgage Bankers Association's index fell to 419.3 in the week ended 15 August from a seasonally adjusted 425.9 one week earlier.

The refinance share of mortgage activity was down to 34.8% of total applications from 35.2% the previous week.

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