4:00PM NY, 10:00 PM Frankfurt, 1:30AM Mumbai – Global Markets

Yields edged higher on 10-year U.S. bonds and closed at 5.118% and 30-year bond rose to close at 5.218%.

Crude oil advanced $0.89 to close at $69.86 per barrel, natural gas down 44 cent to close at $6.65 per mBtu, and gasoline futures gained 2.15 cents to close at 227.61 cents per gallon.

Gold gained $5.60 to close at $650.40 per ounce, silver gained 17 cents to close at $12.505 per ounce, and copper futures lost $24 to close at $7,444 per metric ton.

In New York trading, stocks kept a positive bias after the Fed left interest rates unchanged, first quarter GDP was revised upwards by a fraction, and weekly jobless claims fell.

The Fed left the interest rates unchanged to 5.25% citing modest improvement in core inflation and steady economic growth in a unanimous decision. The Fed has left rate unchanged for nearly a year. The Fed’s preferred measure of core inflation, the price index for personal consumption expenditure fell to 2.0% in April from 2.4% in February. The Consumer Price Index, measure of inflation, fell to 2.2% in May from 2.7% in February. Home prices have moderated and sales of homes have declined but most of the inflation related to higher housing price is still not reflected in the inflation measure. The lagging inflation remains a concern for most economists.

The Commerce Department revised the first quarter GDP to 0.7% from 0.6%, lower than 2.5% growth in the fourth quarter of last year. The Labor Department reported weekly claims of unemployment fell 13,000 to 313,000 at the end of last week.

General Motors (GM: chart) gained 2.2% after reporting a sale of its unit Allison Transmission from $5.6 billion to private equity group led by Carlyle Group and Onex Corp. Bed Bath & Beyond (BBBY: chart) fell 4% after reporting earnings of 38 cents in the first quarter compared to 35 cents a year ago on 1.6% same store increase.

Intel (INTC: chart) was upgraded by Lehman Brothers and Cisco (CSCO: chart) was rated as ‘buy’ by Merrill Lynch on belief that quarterly profits will be higher than estimated. Intel rose 1.2% and Cisco jumped 3%. Dillard’s (DDS: chart) surged 8% on the news that the company has received a letter from activist shareholders demanding actions leading to share price improvement. Monsanto (MON: chart) jumped 1% on the earnings rise of 60%.


1:00PM NY, 5:00 PM Frankfurt European markets gained ground, led by oil and gas sector.

European stock markets gained ground on Thursday, boosted by solid gains among oil and gas shares, ahead of the Federal Reserve’s decision on U.S. interest rates. Oil giants, Royal Dutch Shell, BHP Billiton and Total advanced more than 2% each. Broker comment also contributed to the gains in the sector after Morgan Stanley upgraded Royal Dutch Shell.

Among other stocks helping to lift the sentiment, mobile-phone giant Vodafone Group rose 1.5%, automotive stocks Volkswagen and Man gained over 2.6% each, French consultancy firm CapGemini posted a 4.6% rise in its shares. Nestle shares moved up 2.9% after an upgrade to buy from hold at Deutsche Bank. Among other stocks moved by analyst comments, Randstad shares rose 1.2% after Credit Suisse upgraded its stock to outperform from neutral.

European tire makers also gained, with Continental and Michelin rising by more than 2.2%. The German DAX 30 led advancers with a gain of 1.5% at 7,921.36, followed by the French CAC-40 which advanced 1.1% to 6,006.31, and the U.K.'s FTSE 100, which climbed 0.7% at 6,571.30.


11:30AM Market averages traded mixed. Crude oil rallied. Airlines gained on upgrade.

U.S. market averages traded mixed, as investors showed reluctance to making big moves ahead of the Fed Reserve's decision on interest rates. Strength in the energy sector provided some support. Crude oil prices topped $70 a barrel, sending energy stocks up. The markets also benefited from significant strength among gold, utilities, and steel stocks.

Despite the higher oil prices, airlines advanced after JP Morgan upgraded six airline stocks. Alaska Air (ALK: chart) jumped 5%, American Airlines (AMR: chart) and UAL Corp. (UAUA: chart) rose 3.5% each, while Continental Airlines (CAL: chart) added 2.8%.

Communications equipment stocks advanced after Cisco Systems Inc. (CSCO: chart) got a brokerage upgrade. Other notable gainers included Ciena (CIEN: chart), up 2.7%, Adtran (ADTN: chart), up 2.9% and ADC Telecommunications (ADCT: chart), higher by 2.6%. At the same time, financial shares declined on concerns about the subprime mortgage market and the outlook for buyout activity.

Among individual stocks, Monsanto (MON: chart) gained 1.5% on strong Q3 earnings. Constellation Brands (STZ: chart) rose 4% after posting in line-with-estimate earnings. Capital One Financial (COF: chart) rose 2% after it said it will cut 2,000 jobs. On the side of the losers, Smart Modular (SMOD: chart) dropped 11% after the memory chip maker reported weaker-than-expected Q3 revenues.