U.S. MARKET AVERAGES

It was a day when market read in the economic reports that inflation is under check.

Morning economic report from Commerce Department showed that October consumer prices rose 0.1% lower than 0.9% rise in September. The report from ISM showed that the price paid by manufacturing managers’ was significantly lower than anticipated. The double shot of positive report on the inflation front put buyers in charge in the early morning and then the entire session.

Same-store sales from retailers showed healthy gains by discounter. The luxury and mid-price department stores sales were disappointing. Discounters managed to show sales growth on selective discounts. Apparel retailers delivered disappointing performance.

Costco (COST: chart) reported rise in same-store sales of 6% disappointing the market, Guess (GES: chart) reported rise of 15.8%, Walgreen (WAG: chart) 9%, Ann Taylor (ANN: chart) 12.9% and Abercrombie & Fitch (ANF: chart) 23%. Same-store sales fell 4% at Gap (GPS: chart), fell 3.4% at Federated Departments (FD: chart) and 18% at Sharper Image (SHRP: chart).

Stocks in energy, techs and financials led the rally during the session.

MOVERS AND SHAKERS

Rigel Pharmaceuticals (RIGL: chart) released disappointing results from a clinical study of R112, a potential intranasal therapy for the treatment of allergic rhinitis. In the trial, treatment with R112 failed to show a statistically significant difference from placebo treatment in improving nasal allergy symptoms. The stock dropped nearly 63%.

MTC Technologies Inc (MTCT: chart) projected Q4 earnings of 34 cents to 37 cents a share on revenue of $96.8 million to $100.8 million compared with a previous forecast of 32 to 40 cents a share on revenue of $108.7 million to $114 million. The company sees 2005 earnings of $1.34 to $1.37 a share on revenue of $373 million to $377 million. MTC also said that the planned acquisition will not occur this year, as conditions connected with it were not satisfied. Company’s shares fell 11.2%.

ECONOMIC NEWS

The Commerce Dept. said that personal income rose 0.4 percent in October after surging up 1.7 percent in September. The increase came in slightly below economist estimates of a 0.5 percent increase.

The report also showed that personal spending increased by 0.2 percent in October following a 0.5 percent increase in September. The personal spending growth came in line with economist estimates.

The Commerce Dept. noted that its index of consumer prices excluding food and energy rose at an annual rate of 1.8 percent in October, down from a 2.0 percent rate of growth in September. This marked the slowest pace of growth since February 2004

The number of people filing for first-time unemployment benefits declined in the most recent week and came in below economists'' expectation.

The U.S. Department of Labor revealed Thursday that initial jobless claims came in at 320,000 for the week ended on November 26, a decline of 17,000 from the previous week''s revised total. Economists had expected a level of around 323,000.

The 4-week moving average for initial claims, which flattens out the week-to-week volatility, fell 1,250 to 322,500. Continuing claims for the week ended November 19, the most recent week for which the government has data, dropped 24,000 to 2.767 million.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks finished mixed. The Nikkei ended the session at a five-year high of 15,130.50, climbing 1.8% on shipping and constructions shares with Advantest and Softbank the biggest contributors to the rise. Across the region, Hong Kong’s Hang Seng gained 0.9%, South Korea’s Kospi jumped 0.7%, while stocks in Australia slid 1.2%.

European markets closed with solid gains as the European Central Bank raised the interest rate to 2.25% and energy stocks and takeover deals provided strong support. Higher opening of U.S. markets also contributed to the positive performance. The German DAX 30 climbed 1%%, the French CAC 40 surged 1.3%, and London’s FTSE 100 rose 1.1%.

OIL, METALS, CURRENCIES

Crude oil prices slipped in the early only to rebound during the day. Light sweet crude for January delivery rose $1.15 cents to $58.47 a barrel on the Nymex. Heating oil rose 5 cents to $1.7387 a gallon. Gasoline gained 6 cents to $1.5626. Natural gas fell 7 cents to $12.52 per 1,000 cubic feet. London Brent fell 13 cents to $54.92.