PPI for April rose 0.6% after rising 0.7% in March and 0.4% in February and core index, excluding food and energy, rose 0.3%. Energy prices rose for the third month in a row and rose 2.1% in April and 3.3% in March. Gasoline prices in April rose 2.6% and natural gas prices were up 6.6%.

The index for crude energy materials rose 7.2 percent in April, following a 5.5-percent increase in March. The majority of this acceleration was due to natural gas prices, which jumped 18.1 percent after declining 1.4 percent in March. The coal index increased 2.8 percent, after posting a 0.8-percent rise a month earlier. By contrast, the index for crude petroleum fell 6.3 percent in April, subsequent to a 17.8-percent gain in March.

The report suggests that Federal Bank will keep tightening in the coming moths. The Fed had raised interest rates eight times since June 2004.

Housing starts in April rose 11% to a seasonally adjusted 2.04 million annual rate after 17.6% decline in March. Building permits were up 5.3% to 2.13 million annual rate after declining 3.4% in March.

Housing completions in April were at a rate of 1.61 million up 7.6% from adjusted March 2005.

According to National Association of Realtors, 66 of 136 metropolitan areas registered double-digit price inflation for the existing homes. Florida cities, Palm Beach to Boca Raton and Sarasota and Bradenton area reported more than 35% price rise. Las Vegas registered 29%. Several cities in the mid-West and Texas reported more than 2% decline in prices.

Shares of Whole Foods continued its ascent and jumped another $2.39. Shares of Big Lots, Deere and Home Depot added 12%, 3% and 4% respectively on the back of positive earnings.

Several retail companies Saks, J.C. Penney, TJX, Staples, Big Lots, Zales reported better-than-expected earnings. Shares of Corning, Jo-Ann stores, Willbros Group and Exide Technologies declined better than 15%.


In Other News

U.S. industrial production fell by 0.2% after revised March gain of 1%, producers Price Index, a gauge of prices of products from farms, factories and refineries jumped up 0.6%. The mixed economic picture was not well received on Wall Street shares fell in the mid-day trading.

Collins & Aikman, U.S. auto parts maker, run by former cabinet official, filed for bankruptcy protection.



French Telecom operator and handset maker is pulling out of Chinese joint venture with TCL Communication. The Chinese company will buy back 45% of the stake.

In mid-day NY trading oil prices eased to three-month low to $48.30 per barrel.

Shares in UK were up but in Germany and France were down slightly. The positive earnings from UK companies such as Schroder, British pub operator Enterprise Inns, and British airport operator BAA. The oil giants, BP, Total, and Royal Dutch Shell gained more than 0.5%.

The U.S. net inflow of $45.7 billions funds was not enough to cover $55 billion in trade deficit.

Asian markets closed lower on worries of U.S. GDP growth, Tokyo and HK were down more than 1%, Sydney and Singapore dropped by more than 0.4%. Japan's 1Q annualized GDP growth was 5.3%, an increase from flat growth in the previous quarter.

Britain's Yell Group announced an agreement to buy US TransWestern for $1.58 billion cash which will help the company strengthen its market positions. It posted a rise in full-year adjustment profit.