9:45AM Stocks opened higher, led by inflation data and merger deals.
Stocks opened higher on news of tame inflation in October due to falling gas prices and a couple of multibillion-dollar merger deals. The Consumer Price Index fell 0.5%, matching the decline in September, while core inflation index edged up 0.1%, the smallest increase in eight months. More positive news came from another economic report which showed that the number of initial jobless claims fell by 2,000 to 308,000 last week, the smallest reading in a month.

In merger-and-acquisition news, Clear Channel Communications Inc. (CCU: chart), the largest U.S. radio-station owner, agreed to be acquired by an investor group led by private-equity firms Thomas H. Lee Partners and Bain Capital Partners for $18.7 billion in cash. The deal includes about $8 billion in debt. Company’s shares rose 4.5% in early trading. Under terms of the deal, shareholders of Clear Channel will receive $37.60 a share in cash, a 10.2% premium to Clear Channel's Wednesday closing price of $34.12. In another merger deal, Reader's Digest (RDA: chart) rose 8% after agreeing to be acquired for about $1.61 billion by an investment consortium.

Rate-sensitive housing sector advanced as the inflation data added to optimism that the Fed Reserve is not likely to raise interest rates again. Toll Brothers (TOL: chart) turned in one of the housing sector's best performances, with the luxury home builder currently up 4.3%. Hovnanian (HOV: chart) and KB Home (KBH: chart) also moved higher, both up 2.3%. The airline sector posted strength, led by AirTran (AAI: chart) and AMR (AMR: chart), up 2.8% and 2.6% respectively. However, JetBlue (JBLU: chart) helped to limit the upside for the sector, falling 2% after UBS downgraded its rating on the airline to reduce from neutral, citing valuation.

In the first hour of trading, the Dow Jones industrial average was up 23.05, up 0.19%, at 12,274.76. The Standard & Poor's 500 index was up 4.41, up 0.32%, at 1,400.98, and the Nasdaq composite index was up 0.76, or 0.03%, at 2,443.51. Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.60% from 4.62% late Wednesday.

Industrial production rose 0.2% in October.
The Federal Reserve released its report on industrial production and capacity utilization in the month of October on Thursday. The report showed that industrial production growth came in line with economist estimates. The report showed that industrial production rose 0.2 percent in October after falling 0.6 percent in September. The Federal Reserve noted that production in August was revised up to show a gain of 0.3 percent compared to the previously reported unchanged reading. The increase in industrial production came amid a significant rebound in production in the utilities sector, which rose 4.1 percent after falling 4.6 percent in September. The rebound reflected colder-than-normal conditions following mild temperatures in September. Production in the manufacturing sector edged down 0.2 percent for the second consecutive month, while production in the mining sector rose 0.6 percent in October after rising 0.4 percent in September. The Federal Reserve also said that capacity utilization edged up to 82.2 percent in October from an upwardly revised 82.1 percent in September. Economists had expected capacity utilization to rise to 82.0 percent compared to the 81.9 percent originally reported for the previous month.


9:30AM London edged up in early trading Thursday on National Grid.
By mid-day, the FTSE 100 index in London was up 8.5 points, or 0.1%, to 6,238.1.

Advancers

National Grid led the advancers, up 5.1%, as the energy network operator announced higher profits and plans to demerge its mobile phone mast business and return $1.9 billion to shareholders.

Cadbury Schweppes rose 2% amid talk that a private equity group was lining up a takeover of the confectionary group.

Anglo American gained 0.7% on rumours that Larry Yung was adding to his holding in the mining group via a derivative position. Mr Yung, one of the richest men in China, bought a 1% last week.

Mid-cap Northern Foods rose 9.9% as long-time bear Credit Suisse lifted its recommendation from neutral to outperform for the first time in a decade.

Decliners

Mining group Vedanta Resources was among the leading decliners, off 7.4% in early session, as the market was stunned by plans announced today by the India-based company to build a 1.9 billion pounds, 2,400-megawatt, power plant in Jharsuguda, Orissa. The news accompanied a 355% rise in operating profit to $1.2 billion. Vedanta managed to erase some of the losses and is currently down 6.49%.

Publisher Reed Elsevier eased 4% after it said its Harcourt Education division has underperformed in recent trading. Asia-focused bank Standard Chartered fell 0.9% after UBS cut its rating from buy to neutral.


Initial jobless claims fell by 2,000.
Thursday morning, the Department of Labor released its report on initial jobless claims in the week ended November 11, showing that jobless claims fell compared to the revised reading for the previous week. The report showed that jobless claims fell to 308,000 from the previous week''s upwardly revised figure of 310,000. Economists had expected claims to increase to 310,000 compared to the 308,000 originally reported for the previous week. The Labor Department also said that the less volatile 4-week moving average rose to 313,750 from the previous week''s revised average of 311,750. The report also showed that continuing claims in the week ended November 4 came in unchanged from the preceding week''s revised level of 2.443 million.

Consumer price index dropped 0.5% in October.
The Department of Labor released its closely watched report on consumer prices in the month of October on Thursday, showing that prices fell more than expected due a steep decline in energy prices. The report also showed a smaller than expected increase in core consumer prices. The report showed that the consumer price index fell 0.5 percent in October, matching the decrease that was reported for September. Economists had been expecting a somewhat more modest decline of about 0.3 percent. The decrease in consumer prices was due in large part to a significant decline in energy prices, which fell 7.0 percent in October after falling 7.2 percent in September. Within energy, petroleum-based energy prices fell 10.7 percent, while prices for energy services fell 2.5 percent.

The core consumer price index, which excludes food and energy prices, edged up 0.1 percent in October after rising 0.2 percent in each of the three previous months. Economists had been expecting core prices to rise by 0.2 percent again. The drop in energy prices contributed to a notable decline in prices for transportation, which fell 3.1 percent in October after falling 4.1 percent in September. The report also showed that apparel prices fell 0.7 percent, while prices for medical care and education and communication increased. Food prices increased 0.3 percent for the second consecutive month.