- US equities are choppy this morning as investors weigh the widely expected record results from Goldman Sachs and solid numbers from Johnson & Johnson against a bit of a surprise in June wholesale prices. The June PPI data showed wholesale prices rose far more than expected in the month, for their biggest gain since November 2007, due to higher energy prices. The data has bought some sellers into the Treasury market sending the 10-year yield up to 3.4% while weighing on stocks. Front-month NYMEX crude spiked above $61 earlier this morning, but the contract has retreated towards opening levels below $60.

- The first major financial company to report this earnings season, Goldman Sachs fulfilled widespread expectations from the last week for a blow-out second quarter. Topping its impressive performance in Q1, the bank holding company destroyed earnings and revenue expectations and delivered an impressive 23% return on equity (versus 14.3% last quarter).Trading and investment revenues were up a whopping 93% y/y and 51% q/q. And just after the open Goldman's CFO said the company is still talking with regulators about altering its financial holding status to "allow additional activities," prompting commentators to wonder just how dead the investment banking model really is. Goldman is up a modest 1% this morning after its shares traded up more than 5% over recent days; competitors BAC, JPM and MS are all down about 1% a piece. Note also that CIT is up 25% or so this morning after last night's report in the WSJ that the government is in advanced talks with the company over some sort of bailout.

- Dow component Johnson & Johnson reported Q2 results that were a bit above estimates and reaffirmed its full-year earnings forecast, while trimming its revenue outlook for the year slightly. On the conference call, JNJ's CFO said the results were among the most challenging ever for annualized comparisons due to the loss of patent coverage for Risperdal and Topamax. The company is seeing tighter consumer spending in certain parts of medical device business and continues to experience significant impacts from FX translation (-$0.06 EPS, -6% revenue impact). Railroad CSX beat earnings expectations in its Q1, although revenue lagged the Street by a bit. The company said it expects revenue to continue falling in Q3 in 8 out of 10 markets, with a return to strength in 2010. Shares of CSX are up 6%, while other leading railroad names are up 2-3%. In other earnings news, Sun Microsystems said it expects a much larger loss than analysts have been projecting in its Q4, with revenue weaker than expected as well. Oracle noted that it still expects Sun to be accretive to earnings in the first year. Take-Two also said it would loose more than expected in the quarter, and said it now projects a significant loss for FY09 as well. Shares of TTWO are down 9%.

- PC industry leaders Dell and Microsoft are both making headlines. At an investor meeting, Dell executives said they are seeing demand stabilize but also warned that the competition has improved as the dynamics of the industry evolved. While the enterprise business is still weak, the consumer unit is seeing strong results in the current quarter. After providing a glimpse at its online application strategy the other day, Microsoft unveiled its strategy and pricing for its Azure cloud computing platform. Shares of DELL are down 7% this morning, while MSFT is around even. Note that Intel reports after the close today.

- In currencies, the USD and JPY sustained a soft tone into the New York session as risk appetite gained a bit. Note that while the Asia session provided some optimism about green shoots, news out of Europe indicated that some cracks remain in the recovery. The German ZEW survey in particular highlighted the fact that any recovery would be bumpy. EUR/USD pushed above the 1.40 level but encountered some resistance after ECB's Hurley noted that monetary policy must support real economy and any interest rate hike should only come when the recovery was shown to be totally solid. Sterling drifted off its best levels after the June UK Commercial Property Values survey fell by 0.9%, for its 24th consecutive decline. GBP/USD is around 1.6300 during the New York morning. USD/CAD is probing below its 30-day moving average at 1.1400 and AUD/USD has been hovering around the 0.79 level for most of the morning.

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