The tech-heavy Nasdaq was led higher by Google (GOOG: chart), which rose 2% after its CEO said on Monday that Google and Apple (AAPL: chart) are involved together in ''many more'' new projects, which he did not identify. In economic news, the Labor Department said that Q4 productivity was revised was revised down to a 1.6% annual growth rate from the 3.0% estimate a month ago. Unit labor costs rose to 6.6% annual pace in the quarter, revised higher from a 1.7% increase. The Dow rose 72.98, or 0.61%, to 12,123.39. The Standard & Poor''s 500 index was up 10.84, or 0.79%, at 1,384.96, and the Nasdaq composite index, especially hard hit over the past week, rose 24.91, or 1.06%, to 2,365.59.

Labor productivity revised down 1.6% in Q4. Costs revised sharply up.
Tuesday morning, the Department of Labor released its revised report on productivity and unit labor costs in the fourth quarter. While productivity growth was revised down roughly in line with estimates, the report also showed a significant upward revision to unit labor cost growth. The report showed that non-farm productivity growth was revised down to 1.6 percent for the fourth quarter compared to the previously reported 3.0 percent growth. Economists had been expecting productivity growth to be revised down to 1.7 percent. The downward revision to fourth quarter productivity growth came as the pace of output growth was revised down to 2.5 percent from 4.2 percent. The pace growth in hours worked was also revised down to 0.9 percent from 1.2 percent.

Despite the downward revision, the productivity growth that was seen in the fourth quarter still represents an improvement from the 0.5 percent decline in productivity that was reported for the third quarter. The Labor Department said that the downward revision to productivity growth combined with a large upward revision to compensation to produce a rate of unit labor cost growth in excess of six percent. The report showed that unit labor cost growth for the fourth quarter was revised up to 6.6 percent from the previously reported 1.7 percent. The upward revision came in well above economist estimates of 3.2 percent growth. The revised increase in unit labor costs in the fourth quarter marked the biggest increase since a 9.1 increase in the first quarter of 2006, although the increases in were both periods were due in large part to big bonuses paid to high-income workers.


9:30AM London market gains ground Tuesday with miners helping the advance.
The UK market advanced in early trade on Tuesday. The FTSE 100 was 53.4 points higher at 6,112.1 at mid-day.

Advancers

Miner Xstrata was higher 4.4%, topping forecasts with a 119% increase in underlying profits last year, supported by strong copper and nickel prices. Net profit soared to $4.89 billion, including a full year from acquisitions, compared with forecasts of $4.6 billion. The news supported other miners, which rose in sympathy. Antofagasta rose 2.6% and Anglo American was 2.5% stronger.

International Power led the gainers, up 6.2%, as the power generator raises its dividend by 75% and reported a 44% growth in operating profit of 773 million pounds. Takeover speculation sent Royal & Sun Alliance 2.6% higher on talk that the insurer final exit from the US had left it vulnerable to a bid. Sampo of Switzerland was the likely bidder. Legal & General, the life assurer, was also lifted by bid rumours. It gained 2.5%.

Decliners

British Airways, which lost 6.6% in the previous session, fell a further 0.7% on continued concerns about the possible introduction of liberal aviation services between the US and Europe.

Debt Free Direct plunged 4.9% as it warned that profits for 2007 are now expected to be around 10% to 15% below current estimates of between 9.7 million pounds to 10.3 million pounds.


9:00AM U.S. stock futures pointed higher, as overseas markets rebounded and the dollar gained ground.
U.S. stock market futures were indicating a higher opening on Tuesday, boosted by a recovery in overseas bourses after the steep global decline registered in recent sessions. Asian stock markets advanced, with the Nikkei 225 gaining 1.2% and the Hang Seng climbing 2.1%. European stock markets also moved higher. Investors were optimistic that the various worries have already been priced in. The U.S. dollar gained some ground against the rallying yen and helped provide further support to the pre-market sentiment. Oil and gold futures, hurt by the recent stock market drop, also rose in electronic trade. On the economic news front, January factory orders, statistics on January pending-home sales and Q4 productivity are due for release.

Among companies in the spotlight today, Citigroup (C: chart) gained 1.1% in pre-market trading after the U.S. financial services company said it plans to buy Japanese brokerage Nikko Cordial in a deal worth around $11 billion. Topps Co. (TOPP: chart) jumped 10% in the pre-open after it agreed to be acquired for $385.4 million by investment company Tornante Co. and private equity firm Madison Dearborn Partners. In other deal news, aircraft braking equipment maker K&F Industries Holdings (KFI: chart) surged 9.2% as Britain''s Meggitt agreed to buy it in a deal worth $1.1 billion, or $27 a share, which represents a 10% premium to Monday''s close. Dow component Altria Group (MO: chart) gained 1.2% ahead of the open after the tobacco company was upgraded to buy from hold at Deutsche Bank. S&P 500 futures climbed 14.70 points to 1,386.90 and Nasdaq 100 futures hiked up 17.50 points to 1,731.25. Dow industrial futures rallied 97 points to 12,133.


8:30AM Asia ended mostly higher on Tuesday with Japan leading the way.
Asian markets closed mostly higher on Tuesday. In Tokyo, the Nikkei 225 benchmark index advanced 1.2% to 16,844.50. Japanese Internet and cellphone operator Softbank gained 3.5%, while Sony added 4.6%, as investors returned to shares as the yen eased. Brokerage firm Nikko Cordial advanced 13.7% after Japan''''s third-largest brokerage said it was in advanced talks with Citigroup on a possible deal. Toyota rose 3.5%, leading broad gains among automotive shares.

Hang Seng Index in Hong Kong gained 2.1% to 19,058.56. Shares of China Life Insurance and other mainland financial stocks led the rebound. China Life surged 6.7%, while Industrial & Commercial Banking added 5.3% and China Construction Bank gained 4%. PetroChina, the listed entity of Chinese largest oil producer, ended 2.1% higher after oil prices recovered from a nearly two-week low in Asian electronic trading. HSBC Holdings advanced 2%, after the third-largest bank in the world posted a net income rise of 4.7% to $15.79 billion in 2006 from $15.79 billion.

Shanghai Composite Index in China finished 1.8% higher at 2,840.18. Australian S&P/ASX added 2.1%, while New Zealand NZSX-50 traded flat. Singapore Straits Times Index advanced 1.8% and Malaysia KLSE Composite gained 1.8%. Taiwan Weighted Price Index advanced1.5 % and South Korea''s Kospi Index rose 2%. Indonesia JSX Composite added 2%. Thailand SET Index bucked the broader trend, shedding 0.7% to 672.43.


8:00AM NY-7:00PM Mumbai Sensex bounces back on a rally in IT stocks, Reliance.
The Sensex on BSE finished 282.05 points, or 2.27%, higher at 12,697.09. The market-breadth was stronger than Monday’s, but still negative. For every three decliners, there were two advancers. As 1,459 stocks declined, 1,080 advanced and 45 remained unchanged. Of the 30 stocks in the Sensex, 22 advanced while the rest declined. The turnover on BSE was Rs 3,807 crore, lower than Rs 3,996 crore on Monday. On NSE, the turnover was Rs 8,361.27 crore, compared with Rs 8,550.91 crore on Monday.

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