12:00PM New York – Merger news dominated early trading in New York.

New Homes Decline in December

U.S. market average edged higher at mid-day. New home sales, weakness in European and Asian markets, and worries related to the weakness in financial sector dominated trading sentiment.

New home sales in December fell 4.7% from November to annualized rate of 604,000 and November home sales were revised lower to 13% from 9% to 634,000 annual rate.

New home sales declined 41% from a year ago in December, one of the worst declines in a decade. The median home price in December fell 10% to $219,200 from $244,700 in December 2006. For the year 2007, sales declined 26.4% to 774,000 units.

Sales of new homes declined 6.5% in the South, 6% in the West, and 1.2% in the Midwest. In the Northeast sales rose 6% in the month.

CME and Nymex in Preliminary Merger Talks

CME Group, operator of Chicago Mercantile Exchange, and Nymex Holdings Inc, operator of New York Mercantile Exchange, are in preliminary talks to merge.

Nymex is shareholders may receive $36 in cash and 0.1323 of share in CME in exchange of each NYMEX shares.

CME Group expects to maintain trading floors in the New York City metropolitan area. The potential transaction also contemplates that NYMEX will repurchase the 816 New York Mercantile Exchange memberships upon closing of the potential acquisition for an aggregate purchase price not to exceed $500 million.

Alliance Data and Balckstone Group deal

Alliance Data (ADS: chart), the credit card payment processor, fell 35% after Blackstone Group said that its purchase of the company for $6.5 billion may not happen.

Alliance Data said in the press release that Blackstone does not anticipate the condition to closing the merger relating to obtaining approvals from the Office of the Comptroller of the Currency (OCC) will be satisfied. The notice was given pursuant to the terms of the May 17, 2007 merger agreement among Alliance Data Systems Corporation and various entities controlled by Blackstone Group.

Alliance Data added in the press release that conditions for merger imposed by the Office of Comptroller can be satisfied by Blackstone and it disagrees with the stated assertion by Blackstone.

Blackstone''s notice did not assert any breach of the merger agreement by Alliance Data or the occurrence or anticipated occurrence of any material adverse effect on the Company, and acknowledged that the Company had, to date, used its ""best efforts"" to obtain OCC clearance.

Neither did the notice reference or take issue with the financial or operational performance or liquidity of Alliance Data or its banks, or the parties'' ability to obtain Federal Deposit Insurance Corporation approvals related to the Company''s industrial loan corporation.


5:00AM New York, 7:00PM Tokyo- Subprime fears and comments from IMF Chief led Tokyo stocks down 3.97%.

Stocks in Japan dropped as exporters declined on a strengthening yen and on observations by the IMF that global economic conditions will worsen.

In Tokyo trading Nikkei 225 fell 3.97% or 541.25 to 13,087.91, while the broader Topix Index slumped 51.74 to 1,293.03. Market sold-off after comments from IMF Chief in Switzerland, worsening economic indicators, and worries that the U.S. stimulus package will not be enough to avert a recession in the U.S.