U.S. MARKET AVERAGES

In morning hours averages are trading in a tight trading range.

Latest read on 1Q GDP at 3.8% was better than predicted in the last month (3.5%) and better than forecasted by private groups (3.7%) has not lifted market averages.

The weekly petroleum report from the Energy Department reported that nation’s inventory of crude oil by 1.1 million barrel, gasoline inventories by 0.3 million barrels and distillate inventory by 1.7 million barrels. Crude oil futures in New York fell 80 cents.

ECONOMIC NEWS

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 3.8 percent in the first quarter of 2005, according to final estimates released by the Bureau of Economic Analysis. In the fourth quarter, real GDP also increased 3.8 percent. Excerpts of the release are at the end of this report.

EARNINGS AND U.S. CORPORATE NEWS

American International Group, insurance company, posted 1Q higher profit of $1.40 per share vs. 97 cents per share last year on life insurance growth, retirement businesses and gains in asset management business.

Bassett Furniture Industries, home furnishings manufacturer, reported 2Q earnings of 9 cents per share including pretax charges compared with 16 cents a share a year ago. The company declared regular quarterly dividend of 20 cents a share.

Cardio Dynamics International, medical devices maker, reported 2Q loss of 1 cent per share vs. a profit of 2 cents per share a year earlier due to lower sales hurt by different approach and higher costs.

Cardiotech International, medical devices maker, reported fiscal 2005 earnings loss of 9 cents per share against 10 cents for the prior-year period citing one-time charge related to termination of proposed acquisition and flat revenue.

Electro Scientific Industries, industrial electronic maker, announced 4Q loss of 3 cents per share vs. a profit of 57 cent par share. The company projected full-year earnings of 69 cents a share.

Synnex, computer hardware distributor company posted doubled 2Q profit of 72 cents per share vs. 34 cents per share a year ago on higher sales and revenuer.

ePlus, provider of Enterprise Cost Management, posted 4Q record profit of $2.06 a share compared with 26 cents a share. The high results are due to a $37 million payment patent infringement lawsuit.

Monsanto, maker of herbicides and bioengineered seeds, reported 3Q earnings decrease to 17 cents a share from 93 cents a year earlier. The company backed its 2005 guidance and expects earnings between 82 and 87 cents a share.

INTERNATIONAL MARKETS

Asian markets ended mixed. Some benchmarks advanced on easing crude-oil futures prices and strong gains for U.S. equities, but others lost on lingering global demand fears and domestic concerns. The Nikkei rose 0.6%, South Korea’s Kospi climbed 0.4%, and Taiwan’s Taiex dropped 1.4%.

European stocks gained at mid-day as crude-oil held at about $58 a barrel giving a boost to oil-sensitive shares. They were helped by France Telecom’s dividend , and growth targets which were well received by the investors. Averages in Germany advanced 0.2%, in France rose 0.5%, in the U.K. added 0.1%. The euro traded slightly lower at $1.2055.

France Telecom, European second largest telecommunication operator, announced its plans to more than double its annual dividend to $1.21 a share. The company which has returned to health after nearly collapsing in 2002, unveiled a new strategy focusing on combining mobile and broadband services under a new brand name Orange.

OIL, METALS AND CURRENCIES