In Shanghai and Hong Kong stocks diverged. Hong Kong gained in the regional rally led by 11% surge in Chalco. The company agreed to acquire Peru Copper a day ago and intends to produce copper in Peru by the year 2011. Energy related stocks closed higher. Yanzhou Coal surged 7%, Shenhua Energy advanced 5.2% and Cnooc, oil and gas company, rose 3.5%. In Shanghai, China Vanke, the largest real estate company in China, fell 3% and Citic Securities declined nearly 2%.


1:00PM NY, 5:00 PM Frankfurt European markets rallied on retreating bond yields.

European stock markets rallied on Thursday, making biggest one-day advance since mid-March. A number of sectors posted solid gains, boosted by retreating bond yields. Automakers, industrials and oil producers stood out among gainers.

Shares of car maker Renault advanced 4.2%, conglomerate Siemens climbed 4.8% gain and shares of oil giant Royal Dutch Shell gained 2.7%. At the same time, health-care stocks moved to the downside after a FDA advisory panel did not recommend approval of Sanofi-Aventis’s obesity drug Rimonabant due to safety concerns. The French drug maker dropped 6.3%. Again in the sector, AstraZeneca added 0.3%, Novartis rose 0.7% and GlaxoSmithKline added 0.4%.

Among the biggest advancers today, Dobbies Garden Centres shares surged 17% on deal speculations. Around the region, the U.K.'s FTSE 100 rose 1.4% at 6,649.90, the German DAX Xetra 30 climbed 2.2% at 7,849.16 and the French CAC-40 increased 1.9% at 6,047.23.

11:30AM U.S. market averages rallied. Resource stocks led gainers.

U.S. market averages extended gains after bond yields eased despite stronger-than-expected data on wholesale inflation. Resource stocks were among the biggest gainers, with oil and oil service stocks moving higher amid a notable increase by the price of oil. Natural gas and gold stocks also continued to post strong gains. Shares of homebuilders traded mixed. Hovnanian (HOV: chart) advanced 1.4%, while Toll Brothers (TOL: chart) slipped 1%.

Biotechnology, telecommunications, and computer hardware stocks also showed significant strength, while the health insurance and pharmaceutical sectors declined. Shares of Sanofi-Aventis (SNY: chart) fell 2.8% after a FDA advisory panel did not recommend approval of the company's obesity drug Rimonabant due to safety concerns.

Among companies in focus, Goldman Sachs Group (GS: chart), the U.S. biggest investment bank, said that its Q2 profit rose to $4.93 per share, up from $4.78 per share a year earlier. Results beat estimates for earnings of $4.79 per share on revenue of $10.16 billion. The stock dropped 2.9%.

However, quarterly results from Bear Stearns (BSC: chart) disappointed. The investment bank reported Q2 profit drop of $2.52 per share, down from $3.72 per share a year ago, missing estimates. The fifth-biggest U.S. investment bank attributed its profit drop to a downturn in the U.S. mortgage market. The stock fell 1.1%.

On the deal news front, Chicago Mercantile Exchange (CME: chart) sweetened its bid for the parent company of the Chicago Board of Trade, offering to pay a special dividend of $485 million to CBOT Holdings Inc. shareholders in addition to its $10.19 billion takeover offer.

In late morning trading, the Dow Jones industrial average rose 52.19, or 0.39%, to 13,534.54. The Standard & Poor's 500 index advanced 6.53, or 0.43%, to 1,522.20, and the Nasdaq composite index climbed 16.20, or 0.63%, to 2,598.51.


9:45AM U.S. stocks opened slightly higher, helped by strong inflation data.

Wall Street opened slightly higher on Thursday after a stronger-than-expected inflation reading failed to spook the bond market. The Labor Department said wholesale prices rose 0.9% in May. Energy prices jumped 4.1%, the biggest increase in six months. Excluding food and energy, producer prices rose 0.1%. Investors had expected smaller increases of 0.6% on the headline PPI and a 0.1% increase for the core PPI. The dollar rallied to a new 4 1/2-year high vs. the yen and rose against the euro after the inflation data.

Among stocks in focus, Goldman Sachs and Bear Stearns came under pressure after their quarterly earnings raised concern about their subprime mortgage businesses. Goldman Sachs (GS: chart) fell 2.5%, despite reporting better-than-expected increase in quarterly earnings. Bear Stearns (BSC: chart) slipped 1.5%.

The Dow Jones Industrial Average was up 27 points at 13,509. The blue-chip average was supported by more than 1.5% advance in the shares of AT&T Inc. (T: chart), General Motors Corp. (GM: chart) and Alcoa (AA: chart). Another gainer on the Dow was United Technology (UTX: chart) which gained 0.6% after raising its quarterly dividend by 21% to 32 cents a share.

The S&P 500 index rose 7.1 points to 1,522, while the Nasdaq Composite gained 16.9 points to 2,599. The benchmark 10-year Treasury bond actually rose 1/32 to 94 21/32, while its yield fell to 5.195%.