U.S. MARKET AVERAGES

Stocks gained ground on Thursday, rebounding from two weak sessions. Averages rose on economic data, which offered a broadly positive take on economy easing concerns over Katrina’s and Rita’s impact on it.

A report, released by the Fed Reserve, informed that U.S. industrial production rose unexpectedly by 0.9% in October, fueled by manufacturing output.

The Labor Department reported that initial jobless claims dropped to 303,000, their lowest level since April, versus expected decline of 322,000.

In less positive report, the Department of Commerce said that new construction of U.S. homes fell more than expected in October. The decline stands at 5.6% to seasonally adjusted annual rate of 2,014 million. Building permits dropped 6.7%.

The utilities sector has sharply risen in the early going, with the Dow Jones Utilities Index climbing by nearly 1.2%. The gold sector is extending yesterday’s gains, climbing another 2%.

The slide in GM (GM: chart) continues as the automaker extends its multi-year low with a loss of more than 1%. Altria (MO: chart) is another Dow drag, dropping by more than 2% on an analyst downgrade.

On the sector level, there are very few standouts to the downside. The semiconductor sector is showing some slight losses.

Among stocks in focus today, chip equipment maker Applied Materials reported a 46% decline in quarterly profit, though it beat analyst estimate by a penny. The company also said new orders rose 15%, above the company''s earlier target.

In corporate news, IMS Health agreed to let Holland''s VNU N.V. cancel its $7 billion acquisition of it, as a majority of VNU shareholders opposed the deal. IMS Health in response said its board has approved the buyback of 10 million more shares, on top of its existing plan that still allows for 4.4 million shares to be bought back.

J.P. Morgan cut oil producer ConocoPhillips to neutral from overweight, saying higher capital spending may pressure returns and that production lags peer group.

In the first hour of trading, the Dow Jones industrial average rose 14.81, or 0.14%. The Standard & Poor''s 500 index rose 3.88, or 0.32%, and the Nasdaq composite index rose 9.62, or 0.44%.

Bonds fell, with the yield on the 10-year Treasury note rising to 4.51% from 4.47% late Wednesday.

MOVERS AND SHAKERS

The Children''s Place Retail Stores (PLCE: chart) boosted its 2005 profit outlook after posting strong third-quarter results. The company posted sales that were 57% more than a year ago. Its stock upped 3.5% yesterday.

The retailer Williams-Sonoma (WSM: chart) also lifted the bottom of its 2005 profit forecast range after it posted third-quarter results that were slightly above Wall Street estimates. The company’s stock gained 1.4% yesterday.

The food and tobacco leader Altria Group Inc. (MO: chart) was downgraded by Goldman Sachs to “in-line” from “outperform”. The finacial broker said the break-up of the company may come much later than expected. Altria’s stock dropped 2.7%.

The oil company ConocoPhillips (COP: chart) was downgraded by J.P. Morgan to “neutral” from “overweight”. The brokerage said the company’s higher capital spending may pressure returns, while production delays its peer group. J.P.Morgan also told clients that the company is too big to purse smaller upstream projects that would add meaningful volume growth to its smaller domestic peers. Conoco’s stock lost 0.6%.

ECONOMIC NEWS

Industrial production rose during October, according to data released by the Federal Reserve Thursday, bouncing back from a slide in September that had been caused in large part by hurricanes and a strike at Boeing.