The Conference Board Consumer Confidence Index, which had increased moderately in June, posted another slight increase in July. The Index now stands at 106.5 (1985=100), up from 105.4 in June. Earnings reports have come in strong for the most part.
Watch List news:

Colgate-Palmolive Co. (CL), a maker of toothpaste, soaps and pet food, said its second-quarter profit slid 17 percent, as restructuring charges outweighed sales growth. Excluding restructuring charges, it had earnings of 74 cents per share, compared with 67 cents per share a year ago. Analysts polled by Thomson Financial expected the company to earn 72 cents per share, excluding one-time charges. Sales were $3.01 billion, up 6 percent from $2.84 billion a year ago and ahead of analysts’ consensus target of $2.96 billion. Unit volume rose 4 percent. Prices rose about 2 percent worldwide, while favorable foreign exchange boosted results slightly.

Singapore’s Asia Pacific Breweries, which makes Tiger beer, said Dutch brewer Heineken (HINKY.PK) has increased its direct equity stake marginally to 9.52 percent from 9.29 percent by buying shares on the stock market. Heineken, the world’s fourth-largest brewer by sales, is Asia Pacific Breweries’ biggest shareholder with a total 65.1 percent stake. The bulk of the shares are owned indirectly through an investment vehicle named Asia Pacific Investment. With America’s heartland also shifting to imported brews, it seems like a winning trend.

Playtex Products Q2 Non-GAAP EPS Rises, Tops Estimates; Reaffirms. Mr. Market liked it.

Strong sales lift Anheuser-Busch

Fortune Brands’ results buoy stock

Libbey Inc. (LBY) one of the largest glass tableware manufacturers in the world, announced a wider net loss compared to the prior year quarter.

Tempur-Pedic Reports Second Quarter EPS Up 25% to $0.30. BB&T maintained their buy rating. But Motley Fool doesn’t see the long-term future.

USANA Health Q2 EPS Rises On Improved Sales, Beats Estimates UST Reports Second Quarter 2006 Diluted EPS of $.83. This beat estimates and the company raised guidance. Fitch Raises Campbell’s Rating Outlook

Summary: The housing market is slowing for sure, and the low-end retail woes are spreading to high-end retailers like Best Buy (Plasma TV spending fears.) Some of the high-end toys like boats and snowmobiles are having a tough go, but it seems we’re still willing to pay up for a good night’s sleep.
Watch List Companies

Other News

Mattel (MAT) posted an upside surprise due to stronger than expected Barbie sales (take that, Bratz!) as well as promotional tie-ins with Cars and Superman. The company reported second-quarter net income of $37.4 million, or 10 cents per share, compared with a year-earlier loss of $94 million, or 23 cents per share. Excluding items, earnings rose to 8 cents per share from 5 cents. Analysts on average had been expecting 4 cents, according to Reuters Estimates. Revenue rose 8 percent to $957.7 million, surpassing analysts’ expectations of $922.95 million.

Harley Davidson’s (HDI) quarterly earnings rose 2.5 percent and it was on track to meet its 2006 shipments. Harley said its second-quarter net profit rose 2.5 percent to $243.4 million, or 91 cents a share, from $237.4 million, or 84 cents a share during the period last year, meeting the average estimate. Revenue rose 3.3 percent to $1.38 billion., sending shares higher in premarket trading. The 2006 outlook bucked a trend of disappointing results and scaled-back expectations from U.S. recreational vehicle makers, which have been laboring under rising interest rates and energy prices, and a slowing housing market.

Previously, several U.S. companies selling pricey toys for adults — including boatmaker Brunswick Corp. (BC), snowmobile manufacturer Polaris Industries Inc. (PII), and RV maker Fleetwood Enterprises (FLE), — reported lower quarterly earnings, saying economic headwinds were keeping consumers out of showrooms.

Coca-Cola Co. (KO) posted better-than-expected earnings boosted by its PowerAde sports drink and Dasani bottled water brands. Second-quarter profits were $1.84 billion, or 78 cents a share, up from $1.72 billion, or 72 cents a share, a year earlier. Excluding a gain from the sale of shares in the initial public offering of its Turkish bottler, Coke reported earnings of 74 cents, 2 cents ahead of Wall Street expectations, according to Reuters Estimates. In the past year, Coke launched a flurry of brands such as coffee-infused soda Coke Blak and energy drink Vault and extended flavors of existing brands like Dasani flavored water, to cash in on the growth in the energy drinks (led by Watch List member Hansens Natural [HANS]) and water segments.

The Watch List returned 2.86 percent in its first week, which was better than the S&P 500 but not as good as the mid- or small-cap indices that are probably a better comparison. We have now indexed the Watch List to 100 effective at the June 30 close (it was billed as the Watch List for Q3, after all) and will monitor it on that basis going forward.

Here are a few news items that affected Watch List names and that we didn’t give a separate post.

Valassis Communications (VCI) cut its earnings outlook

Valassis decreased its second quarter earnings per share guidance to a range of 38 cents to 42 cents, versus earlier guidance of 49 cents to 55 cents. Full-year expectations were trimmed to a range of $1.60 to $1.80 from a previously range of $1.95 to $2.15.

Analysts polled by Thomson Financial were expecting earnings of 51 cents for the quarter and $1.99 for the full year.

The company cited a slowdown in sales and pricing pressure in both its free-standing insert business and neighborhood-specific advertising. The company also said a suspension of its stock buyback program would effect earnings per share.

Accredited Home Lenders Assumed Aames Financial’s Wholesale Operations Ahead of Merger

Accredited Home Lenders Holding Co. (LEND), a mortgage company specializing in non-prime residential mortgage loans, announced today that it would absorb the wholesale operations of Aames Investment Corporation (AIC) under an agreement dated June 23, 2006. This move is designed to reduce employee attrition and maximize the expected synergies from the combination of the Accredited and Aames wholesale operations that would otherwise occur as part of the merger of Accredited and Aames contemplated to occur in the third quarter of 2006.

Conoco Phillips (COP) is open to new deals. Among them - a stake in a natural gas pipeline.
Sierra Health (SIE) got some more credit. At a lower rate.

American International Pasta (PLB) still likes Sysco, but wants to see other distributors. But if they don’t file their 10K by the end of the year, they could be delisted.

Mario Gabelli’s Broken Legacy (GBL)

Birinyi thinks it may be time to look at the homebuilders again. (NVR, OHB, TOL)

Copper surplus? (FCX - Annual Report)

If Microsoft revolutionizes business communications, Plantronics (PLT) will be there to help.

Dade Behring (DADE) is changing auditors.

Brazil’s Gerdau (GGB) bought Peru’s Siderperu.

Luxury soup (CPB).

Gold bugs think the Fed is too soft on inflation. (GG, GLG)

Lakeland Industries (LAKE) announced a largely pointless stock dividend.

Par Pharmaceuticals (PRX) to manufacture generic version of high blood pressure treatment Norvasc starting in late 2007.

UT Starcom (UTSI) filed its previously delayed reports.

Libbey (LBY) sets table for Mexican dinner.

Heineken starts up Indian JV.

Helix (HELX) closed the buyout of Remington Oil and Gas.

Stifel Nicolaus likes the beer stocks.