11:30AM U.S. market averages rallied on $25 billion buyout deal.
U.S. market averages moved sharply higher on Monday morning, building on last-week gains. The sentiment was driven by Citigroup, which rose 2.8% on higher-than-expected earnings and a $25 billion buyout deal for Sallie Mae, sending its shares up 18%. Slightly stronger-than-expected rise in March retail sales helped push the Standard & Poor's 500 index to 6-1/2-year highs. A notable decline by the price of oil also contributed to the upward move, with crude futures down 74 cents at $62.89 a barrel.

By sector, banks, broker/dealrs and broad financials led gainers. Financial stocks showed significant strength, with Citigroup (C: chart) helping to lead the sector higher. Wachovia (WB: chart) was another notable advancer, rising 2% on better-than-expected earnings. Strength also emerged in the retail sector, as a report from the Commerce Department showed that retail sales rose 0.7% in March, exceeding economist estimates. The oil price decrease contributed to considerable strength in the oil-sensitive airline sector, as well as a notable decline for oil and gas stocks. Tech shares were helped by Google (GOOG: chart), which rose 2% after it said it expanded its agreement with Clear Channel Communications (CCU: chart) to sell ads on more than 675 radio stations. Amazon.com Inc. (AMZN: chart) rose 5.8% after Deutsche Bank raised its rating on the Internet retailer's shares.

In deal news, an investor group led by J.C. Flowers & Co. reached a deal to buy Sallie Mae (SLM: chart) in a deal valued at $25 billion, sending its shares up 18%. Quest Diagnostics Inc. (DGX: chart) fell 4.5% amid news that it is buying closely held AmeriPath Inc. The Dow Jones industrial average was up 87.20 points, or 0.69%, at 12,699.33. The S&P 500 was up 11.78 points, or 0.81%, at 1,464.63. The Nasdaq Composite Index was up 19.68 points, or 0.79%, at 2,511.62.


9:45AM U.S. markets opened higher on strong earnings from Citigroup and Wachovia.
U.S. market posted gains at opening, boosted by $25 billion buyout of student-loan firm Sallie Mae, as well as stronger-than-expected earnings from Citigroup, Wachovia, Eli Lilly and Mattel. Citigroup (C: chart) posted Q1 profit drop of 11%, due to a big charge related to its restructuring plan. However, excluding it, the profit exceeded estimates, thanks to an increase in revenue. The stock rose 3.2% helping the blue chips and other financial stocks. Dow components American Express Co. (AXP: chart) and JP Morgan Chase & Co. (JPM: chart) rose 1.5% and 2.3%, respectively. Wachovia Corp. (WB: chart) gained 1.8% after the bank giant reported earnings rise of $1.20 a share, up from $1.09 a share a year ago.

Strong earnings results were also released by toy maker Mattel (MAT: chart), which said Q1 earnings dropped 60% to 3 cents a share from profit of 8 cents a year ago but beat analyst expectation of a 5-cent loss. Company''s shares gained 1.1%. Pharmaceutical company Eli Lilly (LLY: chart) gained 1.4% after reporting a drop in Q1 profit amid acquisition-related charges and costs from a settlement of product-liability litigation. However, the company posted 4% sales increase. Among companies driven by analyst comments, Amgen (AMGN: chart) rose 1.6% after it was upgraded to overweight from equal weight at Morgan Stanley.

On the economic news front, the Commerce Department reported that retail sales rose 0.7% in March, led by higher spending on clothing, gas and building materials. Retail sales were slightly stronger than the 0.6% expected by economists. According to another report, business-inventories for February gained 0.3%, in line with expectations. In midmorning trading, the Dow Jones industrial average rose 66.39, or 0.53%, to 12,678.52. The Standard & Poor''s 500 index rose 10.27, or 0.71%, to 1,463.12, and the Nasdaq composite index rose 17.72, or 0.71%, to 2,509.66. Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.74% from 4.77% late Friday.


9:30AM The FTSE 100 rallies Monday on strong financial and metal stocks.
The UK market was higher by mid-day on Monday. The benchmark index was 33.3 points higher at 6,495.9.

Advancers

Barclays rose 2.2% as the end of an exclusive 30-day negotiating period with Dutch bank ABN Amro drew nearer. The UK bank is facing competition from an RBS-led consortium, which is proposing a three-way break-up of the Dutch bank.

The news buoyed the rest of the financials sector, with Lloyds TSB up 1.5%, Bradford & Bingley 1.7% higher and Old Mutual up 2.1%.

Miners gained as metal prices rose, with Antofagasta, up 0.7% Rio Tinto, 1% higher, BHP Billiton, gaining 1.3% and Vedanta Resources, adding 1.4%, among the best performers.

Decliners

HSBC was downbeat on the retailer sector, downgrading Kingfisher and Next from overweight to neutral.Their shares fell 0.3% and 0.6% respectively. The bank also reduced its price target on HMV, pulling the music and book retailer 2.2% lower.

Support services firm Carter & Carter dipped 2.2%. The company lifted interim profits by 25% to 3.8 million pounds adding that it is confident of meeting its expectations for the remainder of the year. Revenue grew 64% to 62.2million pounds.

The worst performing stock was Fiberweb, which tumbled 14.2%, after it warned that current expectations of a significant increase in underlying operating profit and earnings before restructuring in American Industrial business in 2007 will not be attained.


9:15AM Asia rallies on Monday with Japan leading the regional advance.
Asian markets finished higher on Monday. The Nikkei 225 Average ended 1.5% higher, rising 264.35 points to 17628.30. Canon led gains among export-related stocks, up 2.6%. Toyota Motor added 1%, while Honda Motor gained 1.5%. Impact 21 jumped 18% after Polo Ralph Lauren announced Friday that it would launch a tender offer for the company, a sub-licensee of some of its Japanese clothing lines. In the energy sector, shares of Inpex Holdings, the largest explorer by production in Japan, rose 3%.

Hong Kong Hang Seng Index closed 2.1% higher at 20,757.53. China Petroleum & Chemical Corp., or Sinopec, gained 1% after the company stated its first-quarter net profit more than doubled compared with a year earlier, as the price of petrochemical products hovered at a high level on strong domestic demand. Also among the leading gainers in Hong Kong was large-cap HSBC Holdings which rose 1.6%.