1:30PM NY European markets advanced, lifted by merger speculation.
European stocks closed on a positive note Tuesday, reversing from earlier losses. Markets were given a boost by gains in the U.S. markets, strength in the financial sector and bid speculation which helped offset disappointing earnings from Deutsche Post. Dutch banking group ABN Amro shares gained 3.5% after confirming the takeover talks. Barclays shares were also higher, up 3.7%. U.K. insurer Prudential climbed 3.3% to 731.50 pence amid merger consolidation. In other deal news, U.K. leisure group Whitbread climbed 11% amid rumors of private-equity bid interest. Among companes releasing earnings results, Deutsche Post shares fell 4.8% after it said that its sales should increase slightly in 2007. Also on the negative side, shares in chemicals group Lanxess lost 3.2% after the company posted sales decline. The U.K. FTSE 100 index added 0.5% at 6,220.30, the German DAX 30 gained 0.4% at 6,700.29 and the French CAC-40 climbed 0.8% at 5,503.27.

Crude oil prices hovered round $57. Light, sweet crude April delivery traded at $56.78. Heating oil rose to $1.7027. Natural gas jumped 10 cents to $6.944 per 1,000 cubic feet. London Brent rose 30 cents to $60.82. The U.S. dollar traded mixed against its major currency rivals. The euro was quoted at $1.3289, down from $1.3301. The dollar bought 117.22 yen, down from 117.59. The British pound traded at $1.9580, up from $1.9443. European gold prices rose. In London gold traded at $659.50 per troy ounce, up from $653.50. In Zurich, the precious metal traded at $652.85, up from $654.10. Silver rose to $13.34, up from $13.15.


11:30AM Wall Street traded modestly higher. Deal talk gave a boost.
U.S. stocks traded modestly higher, awaiting the Fed Reserve''s interest-rate decision. Investors received well the Commerce Department''s report that construction of new homes and apartments rose by 9%. However, homebuilders declined on the prospect of fewer permit applications. Toll Brothers (TOL: chart), D.R. Horton (DHI: chart), Centex (CTX: chart), KB Home (KBH: chart) and Hovnanian Enterprises (HOV: chart) moved to the downside. Some deal talk also generated positive sentiment. Affiliated Computer Services (ACS: chart) climbed 17% after an investment group said it is offering $5.93 billion in cash to take it private. Speculation arose over media reports on several other deals. Palm (PALM: chart) gained 4.5% on reports that cell phone manufacturer Nokia Corp. (NOK: chart) is trying to buy the company. American International Group (AIG: chart) was reportedly considering an acquisition of Prudential PLC.

Investors found comfort in news that Accredited Home Lenders (LEND: chart) received a $200 million term loan from Farralon Capital Management. The troubled lender surged 23% after falling 18% on Monday. The Dow was led by gains for Caterpillar (CAT: chart), up 1.5% and Wal-Mart Stores (WMT: chart), up 1.2%. In late morning trading, the Dow Jones industrial average rose 29.32, or 0.24%, to 12,255.49. The Standard & Poor''s 500 index was up 4.33, or 0.31%, at 1,406.39, and the Nasdaq composite index rose 10.40, or 0.43%, to 2,404.81. Bonds rose, as the Treasury markets shrugged off the housing data and an announcement from China that the country doesn''t intend to build up its reserves.


10:30AM London equities were lower on Tuesday. Whitbread surges on M&A.
The UK market was lower on Tuesday. In mid-morning trade, the FTSE 100 was down 7.5 points to 6,181.7.

Advancers

Shares in Whitbread, the leisure group, rallied 10.4% as rumours circulated of a possible 23 pound-a-share bid. Barclays gained 4.6% while Lloyds TSB firmed 2% and Royal Bank of Scotland added 1.7 % on expectations of further merger activity to come. Bid speculation also raised shares of ICAP, the inter-dealer broker, 3.6% higher. Prudential rose 3.3 % as Citigroup lifted its price target on the life assurer and confirmed a buy rating.

Mid-caps leisure stock were also upbeat on the Whitbread break-up story. Punch Taverns gained 2.7%, Mitchells & Butlers gained 2.6% and Marston advanced 2.1%.

Decliners

Friends Provident plunged 6.7 % after its annual profits declined 3% to 509 million pounds, mainly on lower earnings from asset management arm F&C. Broadcaster BSkyB shed 1.9% as media regulator Ofcom launched an investigation into the pay TV market that could lead to a Competition Commission probe into the industry.

Peruvian silver and gold miner Hochschild Mining was off 2.9% to profit taking after the profits of the group increased by 89%.

10:00AM Asia finishes higher as export-oriented stocks boosts markets.
Asian markets closed higher on Tuesday. The Nikkei 225 finished 0.9% higher, adding 153.65 points to 17,163.20. Auto maker Toyota gained 0.9% and Nissan Motor advanced 1.2%, while property company Mitsui Fudosan jumped 4%. Consumer-electronics producer Sanyo Electric added 1.1% following resignation of Chairwoman Tomoyo Nonaka on Monday.

Hong Kong Hang Seng Index rose 0.5% to end at 19,356.90. Expectations of strong earnings results by large-caps, including China Mobile, spurred the benchmark Hang Seng Index higher. China Mobile, which has the second-largest weighting in the benchmark index after HSBC, gained 0.9%. The Hang Seng China Enterprises Index, a benchmark of Hong Kong-listed China shares, closed 0.3% up, 23.41 points higher, at 9,248.67.

Elsewhere around the region, Australia S&P/ASX 200 closed 0.3% higher and Singapore Straits Times Index advanced 0.1%. Malaysia KLSE Composite added 1.1%, while Taiwan Weighted Price Index ended almost flat, down slightly 0.02% and South Korean Kospi edged higher 0.1%. China Shanghai Composite Index moved in and out of positive territory before closing 0.6% higher. Thailand SET Index was up 0.4%. Among decliners, New Zealand NZX-50 traded 0.3% weaker, and Indonesian JSX Composite shed 0.1%.


9:45AM Wall Street opened mixed ahead of Fed Reserve’s rate decision.
U.S. stock markets began trading in a mixed fashion on Tuesday, with investors cautious ahead of the Fed Reserve''s decision on interest rates, but relieved that the house construction increased. Housing starts rose 9% to a seasonally adjusted annual rate of 1.525 million in February from a revised 10-year low of 1.399 million in January, beating the expectations for an increase to 1.46 million.

Among early movers, Accredited Home Lenders (LEND: chart) climbed 20% after the mortgage company said it received a $200 million term loan from Farallon Capital Management. Shares of Barclays (BCS: chart) rose 4% in early trade after it confirmed that it was in merger discussions with ABN Amro. Speculation that the two were considering a merger helped spur Monday''s rally. In the tech sector, shares of Rambus (RMBS: chart) rose 6.1%. founder Darwin Deason and private equity fund Cerberus Capital Management said Tuesday they have proposed to buy ACS for about $6 billion.

Technology stocks were driven higher by solid gains for Affiliated Computer Services (ACS: chart). The stock jumped 18% after founder Darwin Deason and private equity fund Cerberus Capital Management said Tuesday they have proposed to buy ACS for about $6 billion. That price is about 16% higher than ACS''s Monday closing price of $51.29. In the first hour of trading, the Dow Jones industrial average rose 8.50 or 0.07%, to 12,234.67. The Standard & Poor''s 500 index was up 1.54, or 0.11%, at 1,403.60, and the Nasdaq composite index rose 3.34, or 0.14%, to 2,397.75. Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.54% from 4.57% late Monday.