1:00PM NY, 5:00 PM Frankfurt European stocks gained ground, helped by Rio Tinto and BNP Paribas.
European stock markets recovered from recent losses to finish higher on Wednesday. The upbeat market sentiment was generated by deal-related gains for Rio Tinto and well-received earnings from BNP Paribas which managed to offset losses among automotive and tech stocks, as well as caution before the U.S. Fed Reserve decision on interest rates. Rio Tinto jumped 10% in London on speculation that the company had rejected a bid of $110 a share (45.81 pounds) from competitor BHP Billiton which rose 5.4%.

Among earnings-related gainers, BNP Paribas climbed 4.2% on higher-than-expected Q1 profit. Again in the bank sector, Credit Suisse rose 1% after Merrill Lynch upgraded its stock to buy from neutral. Among other bank stocks, Credit Agricole rose 3.1% while Societe Generale lost 2.6%. Unicredit shares rose 1%.

On the side of the losers, car maker Porsche lost 0.8% and tire company Michelin fell 1.5%. Tech stocks declined after Cisco Systems predicted slowing revenue growth. Ericsson shares lost 1%. The DAX Xetra 30 rose 0.5% to 7,475.99, the French CAC-40 added 0.3% to 6,051.63 and the U.K.''s FTSE 100 closed flat at 6,549.60.


11:30AM U.S. stock averages remained in the negative. News Corp. profit rose 6.2%.
U.S. stock averages continued to trade in the negative, awaiting the Fed Reserve''s decision later today. Among companies in focus, Toyota Motor (TM: chart) reported a 9% profit increase in Q1 on 10% revenue growth, helped by robust U.S. and European sales. The stock lost 0.6%. Among other companies releasing quarterly earnings, News Corp. (NWS: chart) posted 6.2% earnings increase to 27 cents a share, coming in line with analyst estimates. Company''s shares fell 1.6%.

By sector, telecoms, networking and internet stocks led decliners. Cisco Systems (CSCO: chart) pressured tech stocks with a decline of 6.6% after predicting slowing revenue growth. The tech-heavy Nasdaq was also kept firmly lower by notable losses for Priceline.com (PCLN: chart), down 8.8% and Gateway (GTW: chart), falling 3.9%. Energy stocks also posted weakness, as the price of oil fell sharply following the release of a petroleum report. At the same time, the oil-sensitive airline sector advanced.

In merger-and-acquisition action, mining company Rio Tinto Group (RTP: chart) rose to a record 7.3% in London on speculation of a takeover bid from BHP Billiton Ltd. Rio Tinto said it was not aware of any approach. A union would create the world''s largest copper producer and iron-ore miner. In late morning trading, the Dow Jones industrial average rose 2.28, or 0.02%, to 13,311.35. The Standard & Poor''s 500 index was down 0.26, or 0.02%, at 1,507.46. The technology-dominated Nasdaq composite index declined 8.36, or 0.33%, to 2,563.39.

[Crude oil, gasoline and distillate inventories advanced.
Government data released Wednesday showed that crude oil inventories advanced in the most recent week, adding to a gain posted in the previous couple periods. Stockpiles of gasoline recorded a mild build as well, breaking a recent streak of declines. The Department of Energy''s Energy Information Administration said that crude oil inventories climbed 5.6 million barrels in the week ended May 4. Specifically, the measure rose to 341.2 million barrels from the previous week''s level of 335.6 million barrels. This followed an advance of 1.1 million barrels in the prior week. Oil inventories for the week were 1.7% below last year''s level. Meanwhile, gasoline inventories showed a week-over-week advance of 400,000 barrels. This halted a recent streak of declines, including a drop of 1.1 million barrels in the previous week. The level of gasoline inventories was 7% below last year. Distillate fuel oil also advanced for the week. Stockpiles of these products, which include heating oil, rose by 1.7 million barrels after slipping 200,000 barrels in the previous week.


9:45AM U.S. markets opened lower on weak tech stocks and nervousness ahead of FOMC meeting.
Wall Street started trading lower, reflecting cautiousness before the FOMC meeting, as well as weakness in the tech sector amid disappointing revenue forecast from Cisco Systems. Investors, who expect that interest rates will remain unchanged, are more concerned about the central bank''s economic assessment statement. The downward trend was also attributed to consolidation of market''s record gains of the last two months.

Technology giant Cisco (CSCO: chart) slipped 6% after projecting slowing revenue growth. The company reported a 34% profit rise and 21% revenue rise. Walt Disney (DIS: chart) weighed on the Dow, falling 1.2% after posting lower-than-expected revenue. At the same time, the blue-chip average was helped by International Business Machines (IBM: chart) which rose 1.3% after Goldman Sachs lifted its rating on the stock to buy from neutral.

In other corporate news, home builder Toll Bros (TOL: chart) lost 0.6% after it issued another profit warning, noting that tighter lending standards were affecting affordability at lower price points. Toyota Motor (TM: chart) lost 0.6% after it posted a 9% profit rise on 10% revenue growth in Q1, boosted by strong U.S. and European sales.

In early trading, the Dow slipped 14.55, or 0.11%, to 13,294.52. The S&P''s 500 index was down 3.48, or 0.23%, at 1,504.24, and the Nasdaq declined 15.15, or 0.59%, to 2,556.60. Bonds were little changed ahead of the Fed''s decision. The yield on the benchmark 10-year Treasury note slipped to 4.63% from 4.64% late Tuesday.


9:30AM UK benchmark index is lower Wednesday as speculation around Rio Tinto fizzles out.

The UK benchmark is lower in mid-afternoon trading on Wednesday. The FTSE 100 is 0.18% lower at 6,538.

Advancers

Rio Tinto is still higher, up 6.4%, even though it announced it will refrain from comment on market gossip. Its shares jumped by 11% at one point on the Australian market overnight as the story of a bid from BHP took hold.

Other miners also advanced in sympathy. Kazakhmys gained 3.1%, Vedanta rose 1.8% and BHP itself was 2.2% higher.

Hanson gained 0.7% as it confirmed that HeidelbergCement was considering a bid for the aggregates provider.