U.S. MARKET AVERAGES

The major averages advanced at the beginning of the trading session, but almost immediately changed the direction, heading for the flat line. Technology stocks led the market higher on Friday after electronics manufacturer Sanmina-SCI. Corp. reported results above expectations. Nasdaq also got a lift from coffee chain Starbucks Corp. which reported October sales at the high-end of its forecast range, prompting Prudential Equity group to boost its price target on the shares to $34 from $30.

The major averages are consolidating recent gains as the released employment data proved unimpressive and there is no other significant news. A U.S. employment report showed a smaller-than-expected job creation in October. Employers added 56,000 workers to their payrolls last month, compared with a Wall Street forecast of 100,000.

The Labor Department report on Friday also showed the national unemployment rate eased to 5% from 5.1% in September. Analysts had forecast no change in unemployment.

The jobs report pushed the yield on the 10-year U.S. Treasury down from a 16-month high.

The Dow Jones industrial average was up 17.76 points, or 0.17%. The Standard & Poor''s 500 Index was up 1.46 points, or 0.12%. The technology-laced Nasdaq Composite Index was up 5.54 points, or 0.26%.

The market lacks a leading major sector, but still the biotech and semiconductor spaces are moving modestly higher, adding to their recent gains.

Energy stocks are posting losses, as traders take some profits from a recent run up that took the group to its highest level in about a month. The natural gas sector is leader of the group, down by 1.3%. Computer hardware and transportation stocks are also moving to the downside.

MOVERS AND SHAKERS

Diversified industrial group Honeywell International (HON: chart) announced it would buy back as much as $3 billion of its common stock. The transaction would stand for nearly 10% of the company's 856 million shares outstanding. The company’s stock gained 1.5% yesterday and is likely to rise higher today.

Online travel agent Expedia Inc. (EXPE: chart) reported third-quarter earnings and revenue that came above analyst expectations. The company gained from increased worldwide merchant hotel revenue, contributions from recent acquisitions and growth in its car rental business. Expedia’s stock added 11%.

Apple Computer Inc. (AAPL: chart) was downgraded by Prudential Equity Group to 'neutral-weight' from 'overweight'. The financial broker cited the recent valuation in the company's stock and said it expects a strong first quarter and fiscal 2006, but it believes the stock has now fully ignored this reality. Apple’s stock dropped 2.3%.

ECONOMIC NEWS

Friday morning, the Department of Labor released its report on the employment situation in the month of October, showing that the U.S. economy added fewer jobs than economists had been expecting.

The report showed that non-farm payrolls rose by 56,000 jobs in October following a revised decrease of 8,000 in September. The increase came in well below economist expectations of an increase of about 110,000.

Additionally, Kathleen Utgoff, commissioner of the Bureau of Labor Statistics, noted that the relatively weak growth in the labor market was not attributable to the areas directly affected by Hurricane Katrina.

Rather, job growth in the remainder of the country appeared to be below trend in October,” Utgoff said. However, she noted, “It is possible, of course, that employment growth for the nation could have been held down by indirect effects of Hurricanes Katrina and Rita.”

The report also showed that the unemployment rate edged down to 5.0 percent in October from 5.1 percent in September, reflecting a smaller labor force. Economists had been expecting the unemployment rate to remain unchanged at 5.1 percent.

The weaker than expected job growth may raise some concern about the strength of the labor market and the economy as a whole.

INTERNATIONAL MARKET NEWS