9:45AM U.S. stocks opened higher on merger news and strength in the tech sector.
U.S. stock markets were driven higher Thursday by merger news and a trademark agreement between Apple and Cisco Systems. Positive sentiment was also generated by a government report that showed the labor market remains strong. On the deal news front, Whole Foods jumped 10% after it agreed to buy smaller rival Wild Oats Markets (WFMI: chart) for about $565 million. Shares of Wild Oats (OATS: chart) surged 17%. Blue-chip stocks were led higher by Boeing (BA: chart) and Verizon Communications (VZ: chart), each rising nearly 1%.

Tech stocks moved notably higher, helped by 9% gain for Analog Devices (ADI: chart) on 26% profit increase. Citigroup upgraded the stock to buy from hold, citing expectations for stronger revenue and growth. Strong gains by National Semiconductor (NSM: chart), up 6.2%, Linear Technology (LLTC: chart), up 7.2% and Maxim Integrated Products (MXIM: chart), up 6.75, also contributed to the upward move by the semiconductor sector. In addition, Apple Inc. (AAPL: chart) rose 1.2% while Cisco (CSCO: chart) gained 0.4% after the companies settled their dispute over the iPhone trademark, reaching an agreement to share the name.

Retail stocks came under pressure after luxury home builder Toll Brothers (TOL: chart) announced a 67% decline in Q1 net income, sending its shares down 1.2%. Abercrombie & Fitch (ANF: chart) also contributed to the decline with a drop of 2.7% after it warned that it would face pressures in the first half of the year. In the first hour of trading, the Dow Jones industrial average rose 18.59, or 0.15%, to 12,757.00. The Standard & Poor''s 500 index was up 3.78, or 0.26%, at 1,461.41, and the Nasdaq composite index added 12.73, or 0.5%, to 2,531.15. Bonds weakened, with the yield on the benchmark 10-year Treasury note rising to 4.71% from 4.70% late Wednesday.


9:30 AM London rallies Thursday, boosted by BAE and Centrica.
The UK market was trading higher by mid-morning on Thursday. The FTSE 100 rose 0.6% to 6,395.1, a gain of 38 points.

Advancers

Shares in the aerospace and defense company BAE advanced sharply after it posted a strong set of annual results, underpinned by programme schedule and the continued growth from its US businesses. BAE Systems was up 4.3% after it reported earnings of 1.2 billion pounds, up from 909 million pounds a year ago. It also issued an upbeat outlook for the year ahead.

Utility company Centrica announced its residential arm returned to profit in the second half after it lifted retail prices, though underlying pre-tax profit still declined slightly. Centrica was 4.2% higher after the energy distributor also stated its British Gas unit went back into the blue in the second half despite the loss of over 1 million customer account.

News of a 12% rise in annual profit before tax at Hanson helped the aggregates provider 0.4% higher, while takeover talk boosted Drax Group, up 3.7%, and Scottish & Southern Energy, 2.5% higher.

Decliners

Investors took profits in Capita after the outsourcing company reported an 18% rise in full-year profit before tax, in line with expectations. Shares in the collector of the London congestion charge and the BBC licence fee declined 3.8 %.

Among the mid-caps, Rentokil Initial slumped 8.1 % as the washrooms-to-pest control group admitted that profits in 2007 were unlikely to rise. Bookmaker Ladbrokes reported a sharp increase in annual pre-tax profit following the sale of its hotel unit and bumper World Cup winnings. Its shares however fell 2.2%.

9:00 AM Market futures pointed to modest gains at opening.
U.S. stock futures pointed to modestly higher opening on Thursday. In pre-market highlights, Whole Foods jumped 7.5% after it agreed to buy smaller rival Wild Oats Markets for about $565 million. Shares of Wild Oats surged 17%. In the tech sector, Cisco Systems (CSCO: chart) and Apple (AAPL: chart) were in the spotlight as the two tech giants managed to settle the issue over Cisco''s iPhone trademark, agreeing to share the name. Apple shares rose 1.5% in pre-market trading, while Cisco gained 0.6%.

A number of retailers posted quarterly earnings ahead of market opening. Abercrombie & Fitch (ANF: chart) announced its Q4 profit climbed 20% to $2.14 per share, up from $1.80 per share a year ago, boosted by strong sales. However, the retailer warned that results in the first half of the fiscal year would match or come below analyst estimates. The stock slipped 2.7% in the pre-open. Department store operator J.C. Penney Co. (JCP: chart) fell 2% after it posted Q4 profit drop of 13% on higher tax expense and projected Q1 earnings below analyst forecast. Toll Brothers (TOL: chart) said its Q1 net income fell 67% on 19% lower revenue. Company’s shares traded up 0.4%. S&P 500 futures rose 2.3 points at 1,462.70 and Nasdaq 100 futures added 6 points at 1,850.50. Dow industrial futures rose 22 points.

Initial jobless claims dropped.
Thursday morning, the Department of Labor released its report on initial jobless claims in the week ended February 17, showing that jobless claims fell by a little less than economists had been expecting. The report showed that jobless claims fell to 332,000 from the previous week''s revised figure of 359,000. Economists had expected jobless claims to fall to 325,000 compared to the 357,000 originally reported for the previous week. Jobless claims showed a notable increase in the previous week due in part to colder weather in the Midwest and Northeast, marking the biggest increase in jobless claims since the week ended September 10, 2005, which reflected the impact of Hurricane Katrina. At the same time, the report showed that the 4-week moving average rose to 328,000 from the previous week''s revised average of 326,750. The Labor Department also said that continuing claims in the week ended February 10 fell to 2.509 million from the preceding week''s revised level of 2.554 million.


8:30AM Asian markets ended higher Thursday with Japan at record close.
Asian markets finished mostly higher on Thursday. Japanese Nikkei Index finished 1.1% higher at 18,109. On Wednesday the Bank of Japan lifted interest rates a quarter of a percentage point, bringing its benchmark rate to 0.5%. Resona led the advancers, gaining 0.9% and Mitsubishi UFJ Financial Group advanced 0.7%. Shares of Sony edged up 0.3% while camera maker Nikon surged 4.2%. Canon Inc., the world biggest maker of digital cameras, added 1.7%.

Hong Kong Hang Seng Index added 0.8% to 20,809. In Hong Kong, shares of China Mobile advanced 2.9% to lead gains among Hong Kong large-caps. The telecom company, the largest by subscribers in China, announced on Wednesday it added 4.86 million subscribers in January, lifting its total subscriber base to 360.1 million.

Shares of Sung Hung Kai Properties, owners of the tallest skyscraper in the city, rose 1.7%, while real-estate group Cheung Kong Holdings surged 3%. Among large-cap decliners, HSBC Holdings shed 0.2%. Other indexes also advanced. South Korean Kospi Index advanced 1% to 1,465 and Australian S&P/ASX 200 increased 1.1% to close at 6,017.