U.S. MARKET AVERAGES

The three major averages are sitting at their intraday highs, posting gains of 1%. The initial rise was a result of strong earnings news. A temporary decline was caused by news of violence in Iraq, but soon after that the market resumed its positive sentiment as President Bush named Ben Bernanke the next Fed Reserve Chairman.

Another $1-slip in crude oil prices sent the Energy sector up 1.9%. Financials sector is another conspicuous gainer, climbing 1.3%.

Trucking stocks have been posting solid gains throughout the morning session, led by Arkansas Best (ABFS: chart), which is up about 15% on positive earnings report. As a result the transportation sector went higher, with the Dow Jones Transportation Index now at its highest level since the beginning of the month.

The health care provider sector is currently down 1% on earnings and guidance from Triad Hospitals (TRI: chart).

After a dip on Friday, treasury yields spent Monday's early session slightly above the unchanged mark. Yields advanced sharply as reports came out that President Bush will name Ben Bernanke as the next Fed chairman. The 10-year yield is currently up 6 basis points to 4.45%.

MOVERS AND SHAKERS

Taser International (TASR: chart) was upgraded by Jefferies & Co. to “buy”. The financial broker pointed opportunities to expand revenue and market share. Stun gun manufacturer’s stock jumped 14.5%.

Cendant (CD: chart) announced that it will split itself into four companies by 2006. The name of the controversial conglomerate will vanish. The company will set up the new companies out of its four main lines of business: real estate, travel, hotels and car rentals. Cendant’s stock was up 8.7%.

Schering-Plough (SGP: chart) said its third-quarter earnings increased, as compared to the profit a year ago, due to contributions from its turnaround program and strong sales of anti-cholesterol agents. The company’s stock gained 4.2%.

Merck (MRK: chart) reported third-quarter earnings of $1.42 billion, or 65 cents a share, up from $1.33 billion, or 60 cents a share, a year ago. The company’s sales declined 2%. Merck’s stock fell on Friday.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks closed the session mostly in the red ahead of major companies’ earnings releases. The Nikkei declined 0.7%, awaiting quarterly reports from Sony and other giants. It was also pressured by tech companies like NEC Corp. and Pioneer Corp. Across the region, Hong Kong’s Hang Seng lost 0.7%, Taipei’s Weighted index fell 0.4%, while South Korea’s Kospi edged up 0.1%, supported by steelmaker Posco.

European markets closed with solid gains on the back of steady oil prices below $60 a barrel, upbeat earnings report from German drug maker Shering, and strong U.S. markets. Oil-sensitive chemicals sector and resource stocks were among the leading gainers. The German DAX 30 climbed 1.3%, the French CAC 40 rose 1.3%, and London’s FTSE 100 also advanced 1.3%.

ENERGY, METALS, CURRENCIES

Crude oil dipped more than $1 after Hurricane Wilma struck Florida, avoiding the key oil producing and refining facilities in the Gulf of Mexico. Light sweet crude December contract dropped 2%, or $1.18 to $59.45 a barrel on the Nymex. Gasoline lost over 4 cents, falling to a three-month low of $1.5965 a gallon, while heating oil lost more than 5 cents to $1.8125.

In European trading gold gained ground. In London gold closed at $466.20 per troy ounce, up from $464.80. In Zurich it climbed to $466.75, up from $461.25. In Hong Kong the precious metal rose $1 to close at $463.75. Silver closed at $7.68, up from $7.58.

In European trading the U.S. dollar ended lower against other major currencies. The euro was quoted at $1.1973, up from $1.1934. The dollar changed hands at 115.37 yen, down from 115.92. The British pound was trading at $1.7679, up from $1.7645.

EARNINGS NEWS

Merck & Co. (MRK: chart), drug producer, posted Q3 earnings of 65 cents a share, up from 60 cents a share a year-ago, beating analyst estimate of 62 cents a share. Sales shed 2% in Q3. The Dow component estimates its withdrawal of the drug Vioxx from the market lowered sales by 3% in Q3. Merck also announced that it hasn't established any reserves for potential liability related to the Vioxx lawsuits and investigations, and that unfavorable outcomes in these cases could have a material adverse impact of its financial position, liquidity and operating results.

Kimberly Clark Corp. (KMB: chart), maker of Kleenex tissues, Huggies diapers and other consumer goods, reported Q3 net income of 68 cents a share, down vs. 89 cents in the same period last year. If not for charges, earnings would have been 95 cents a share, matching analysts' forecasts. Sales advanced to $4 billion from $3.78 billion in Q3 last, ahead of analysts' view for $3.99 billion in sales. For the fiscal year, the company announced it remains comfortable with its previous range for earnings before items of $3.77 to $3.83 a share, in line with analysts' forecasts.