U.S. MARKET AVERAGES

Market averages spent most of the session in the plus side with the upbeat earnings from Genentech and Alcoa. Oil rose in the early hours of trading and kept the upward bias for the entire day. IBM enjoyed a second upgrade in as many days. UBS upgrade of the stock was followed by yesterday’s upgrade from Citigroup. In the afternoon General Motors stock got a lift after Kirk Kirkorian controlled Trancinda Partnership received anti-trust clearance to raise the current holding of 9.5% in the stock.

FOMC minutes released at 2:00 PM noted that the aggregate demand is still strong however rising energy prices and lack of fiscal discipline are contributing to the inflation pressures.

In the late afternoon trading tech and financial sectors weakened on the lack of buying and investors’ wait and see attitude on Advanced Micro Devices (AMD: chart) and Apple Compute (AAPL: chart) earnings after the close.

Energy stocks staged a strong climb as oil and natural gas prices firmed. Chesapeke Energy (CHK: chart), Southwestern Energy (SWN: chart), Exxon Mobil (XOM: chart) and EOG Resources (EOG: chart) jumped between 3% and 5%. Shares of Phelps Dodge jumped 4% on strengthening copper prices near record levels.

World’s largest derivatives trading firm Refco dropped another 17%after the stock reopened at 3:00 PM. The company’s stock had declined 45% in yesterday’s trading. The company is facing SEC inquiry and class action lawsuit.

MOVERS AND SHAKERS

The aluminum producer Alcoa (AA: chart) posted a third-quarter profit that was slightly higher than the reduced outlook it announced two weeks ago. Alcoa reported earnings of $289 million, or 33 cents a share, for the three months ended September 30, an increase from $283 million, or 32 cents, for the same period in 2004. Alcoa is currently up 0.8%.

Genentech (DNA: chart) gained 3.7% after the company also reported higher-than-expected third-quarter net income. The company said net income increased 56% to $359.4 million, or 33 cents a share, in the quarter ended September, compared with $230.9 million or 21 cents a share for the same period in 2004.

Fast-food giant McDonald's (MCD: chart), a Dow component, added 1.3% after UBS lifted its price target for the stock by $6 to $43. The broker cited a spin-off of McDonald’s company-owned restaurants makes sense and would unlock shareholder value. The analysts are also optimistic on the company’s fundamental outlook heading into 2006.

Another Dow component, General Motors (GM: chart), climbed 4.9% after the company lost 10% of its value yesterday as a result of its former unit Delphi's bankruptcy filing.

Apple Computer (AAPL: chart) is going to report its earnings results after the close of trade. Analysts are expecting the company to post earnings of 37 cents a share for the quarter ended September on $3.73 billion in sales. Apple was up 1.3%.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks closed the trading session mostly higher. The Nikkei advanced 2.5% after the long weekend, rebounding from last-week sharp declines on the back of strong bank and machinery stocks. Across the region, South Korea’s Kospi gained 1.4% on sensitive to domestic consumption stocks. Hong Kong’s Hang Seng added 0.3%, while Australia’s All Ordinaries fell 0.8%.

European markets finished higher on signs of improving retail sector in the U.K. and strong earnings report from a Roche Holdings’ subsidiary Genentech. The German DAX 30 added 0.2%, the French CAC 40 rose 0.3%, and London’s FTSE 100 gained 0.1%. The euro fell 0.4% to $1.2004.

ENERGY, METALS, CURRENCIES

Oil prices rose over $63 a barrel on a report of the International Energy Agency, saying that last-month drop in fuel demand could moderate and lead to shortages during the winter. Light sweet crude for November delivery gained $1.65 to trade at $63.45 a barrel on the Nymex. Heating oil rose nearly 4 cents to $2.015 a gallon. Gasoline prices advanced 3 cents to $1.83. Natural gas futures added 52 cents to $13.49 per 1,000 cubic feet. London Brent added 69cents to $59.47.

In European trading gold prices climbed on higher energy costs which increased the appeal for the precious metal, seen as a hedge against the inflation. In London gold December contract closed at $476.05 per troy ounce, up from $473.60. Markets in Hong Kong were closed for a holiday. Silver closed at $7.85, up from $7.76.

In European trading the U.S. dollar gained ground against its major counterparts. The euro was quoted at $1.199, down from $1.2052.The dollar changed hands at 114.34 yen, up from 114.20. The British pound was trading at $1.7455, down from $1.7537.

EARNINGS NEWS