1:00PM NY, 5:00 PM Frankfurt European stocks advanced on deal-related gains.
European stock markets posted gains on Friday, boosted by merger activity, involving German utility RWE and French bank Societe Generale. He deal-related gains managed to offset negative sentiment, generated by weak earnings from banking group Fortis and steelmaker ThyssenKrupp. In France, Societe Generale rose 4.7% on speculations that the bank is a target for eight different groups. Deal hopes also boosted utility shares, with RWE rising 6% on reports that France''s EdF plans to buy RWE.
Among other notable gainers, French-U.S. telecom-equipment maker Alcatel-Lucent gained on upgrade by Credit Suisse and an upbeat sales outlook. Truck maker Volvo jumped 11% after it reported a 5.7% slip in profit, but predicted that demand will grow to normal levels by 2008. On the side of the losers, Belgian-Dutch bank and insurer Fortis fell 1.9% after it reported a 12% quarterly profit decline.The German DAX 30 closed up 0.9% at 7,479.34, the French CAC-40 added 0.6% at 6,050.63, and the U.K.''s FTSE 100 rose 0.6% at 6,565.70.
11:30AM Retreating inflation concerns supported market averages.
The U.S. market indexes rebounded on Friday on the back of upbeat key economic data. Tame core inflation and an unexpected drop in retail sales generated optimism about the outlook for interest rates. The Labor Department reported its producer price index rose to 0.7% in April in line with expectations. The core PPI, which excludes food and energy, remained unchanged for the second month in a row. Another report showed that retail sales unexpectedly fell 0.2% in April, indicating weakness in the economy at the start of the second quarter.
The networking sector moved notably higher, helped by 3.8% rise for Alcatel-Lucent (
ALU: chart) which reported a Q1 loss but released a positive forecast about the second half of the year. Resource stocks also gained amid an increase in commodities prices. Housing stocks also moved to the upside. Home builder KB Home (
KBH: chart) advanced 3.8% after it said it received a takeover bid for its controlling stake of a French builder, Kaufman & Broad, valued at 582 million euros ($788 million).
In late morning trading, the Dow Jones industrial average rose 104.34, or 0.70%, to 13,319.47. The Standard & Poor''s 500 index was up 8.31, or 0.56%, at 1,499.78, and the Nasdaq composite index rose 13.20, or 0.52%, to 2,546.94. Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.62% from 4.64% late Thursday.
9:45AM U.S. markets opened higher on hopes of interest rate cuts.
Wall Street opened in the positive on Friday, boosted by upbeat news on wholesale inflation and weak retail sales. Rate-sensitive financial services stocks were among the leading gainers. Goldman Sachs Group (
GS: chart) added 1.4%, while and Merrill Lynch (
MER: chart) rose 1.7%. Significant gains were also posted by energy stocks, benefiting from rising oil futures. Shares of Exxon Mobil (
XOM: chart) were the top-weighted gainer on the S&P, rising 1.6%. Rival ConocoPhillips (
COP: chart) added nearly 2%, Tesoro Corp. (
TSO: chart) gained 2.5%, and Valero energy (
VLO: chart) rose 2.03%.
The Dow was pushed higher by Honeywell International (
HON: chart), up 1.4%, AT&T (
T: chart), up 1.2%, and DuPont (
DD: chart), up 1%. Amgen (
AMGN: chart) weighed on the Nasdaq after it dropped 4.1% following downgrades by both J.P. Morgan and Citigroup on the back of a decision from the FDA. Tech stocks were supported by 2.4% rise for chip equipment maker Applied Materials (
AMAT: chart) which was upgraded by UBS.
In corporate news, Chicago Mercantile Exchange Holdings (
CME: chart) rallied 4.5% after it lifted its takeover bid for CBOT Holdings (
BOT: chart), sending its shares up 1.5%. The Dow Jones industrial average was up 44.86 points, or 0.34%, at 13,259.99. The S&P''s 500 was up 5.23 points, or 0.35%, at 1,496.70. The Nasdaq Composite Index was up 6.61 points, or 0.26%, at 2,540.35.
9:30AM FTSE 100 recovers on Friday afternoon from initial losses.
The UK market is trading higher on Friday afternoon. By early afternoon, the
FTSE 100 was was up 7.6 points at 6,531.7.
Advancers
Standard Chartered, the bank focused on Asia, led the advancers in large-cap stocks, up 4.2 per cent amid bid talk. Northern Rock gained 4.3 per cent as the mortgage bank was buoyed by positive comments from Cazenove.
The main talking point, though, was Rio Tinto, which advanced 3.8 per cent as bid speculation would not die down. Other mining stocks also advanced in sympathy. Antofagasta rose 2.3 per cent.
Among mid-caps, chemical firm Elementis, up 10.1%, announced it is to sell its global pigments business to Rockwood Specialties for $140 million in cash. It expects to post a pre-tax gain of 20 million pounds from the sale of the business, which makes synthetic iron oxides.
Lehman Brothers is helping Standard Chartered, 4.5% higher, with a rise in its price target and an overweight stance.
Decliners
Property stocks lost ground as some of the bid speculation that had pushed the sector higher in the previous session faded. Hammerson, linked to a possible bid from KKR, fell 1 per cent.
