9:45AM Market opened mixed, awaiting Ben Bernanke’s testimony.
U.S. stock markets opened mixed ahead of a speech by U.S. Fed Reserve Chairman Ben Bernanke, expected to describe steadily moderating growth and give clues about interest rates. The same picture was described by economic reports which showed consumer prices slowly rose, jobless claims fell to an 11-month low, and housing construction increased. Earnings reports were also in focus, with strength in financial stocks and disappointment in the tech sector. Blue-chip stocks advanced after Merrill Lynch (MER: chart) said Q4 earnings rose 68% to 2.41 per share, sharply up from $1.41 per share last year, exceeding analyst forecasts. The brokerage gained nearly 1%.

Meanwhile, the tech-heavy Nasdaq moved to the downside, as Apple (AAPL: chart) dropped 4.3% on disappointing Q2 outlook. The news came a day after Intel Corp.(INTC: chart) said its Q4 profit plunged 39%. In deal news, Apache (APA: chart) agreed to acquire a controlling interest in 28 oil and gas fields from Anadarko Petroleum Corp. (APC: chart) for $1 billion. In early trading, the Dow Jones industrial average rose 13.13, or 0.10%, to 12,590.28. The Standard & Poor's 500 index was up 0.99, or 0.07%, to 1,431.61, and the Nasdaq composite index was down 5.20, or 0.21%, to 2,474.22. Bonds fell, with the yield on the benchmark 10-year Treasury note rising to 4.80% from 4.78% late Wednesday.

Jobless claims fell to 11-month low.
The Department of Labor released its report on initial jobless claims in the week ended January 13 before the start of trading on Thursday, showing that jobless claims fell unexpectedly compared to the previous week. The report showed that jobless claims fell to 290,000 from the previous week's revised figure of 298,000. With the decrease, jobless claims fell to their lowest level in 11 months. Economists had expected jobless claims to rise to 315,000 from the 299,000 originally reported for the previous month. The Labor Department also said that the less volatile 4-week moving average fell to 308,000 from the previous week's revised average of 314,500. The report also showed that continuing claims in the week ended January 6 rose to 2.530 million from the preceding week's revised level of 2.410 million.


9:30AM NY-2:30PM London The FTSE gains on updates and upbeat miners.
By mid-day, the FTSE 100 was up 26.2 points, or 0.4%, to 6,237.5.

Advancers

Resources stocks were the big gainers in London, with Vedanta Resources up 2.7% and Xstrata up 2.1%. ICAP, the inter-dealer broker, firmed 2.7% as Citigroup reiterated a buy rating on the stock and upped its price target. Pearson rose 1.9% on reports of bid interest from private equity group KKR.

In the mid-caps, shares in London Stock Exchange rose 0.7% after the group has announced an increase of up to 250 million pounds in its existing share buyback program today as the group looks to fight off a hostile bid from US rival Nasdaq.

Misys, the health sector and insurance software specialist, jumped 5.6% as it announced far-reaching changes in its boardroom. Kesa Electricals, rose 2.6% after the company behind the Comet retail chain reported a 7.3% increase in sales over Christmas. Weir Group, the mid-cap engineer, was 4.3% stronger after it said annual profits would reach the top of consensus forecasts.

Decliners

Security specialist ArmorGroup has blamed the continued weakness in Middle East training for its full year performance that is expected to see results marginally below market expectations. ArmorGroup plunged 10.23%.

Hikma Pharmaceuticals dropped 2.8% despite forecasting full-year revenue growth of 20%. The pharmaceutical group cautioned that margins will be lower than 2006. Broadcaster ITV declined 0.68% as the investors took profits in the group.


9:00AM Market futures were lackluster, reflecting mixed economic data and Apple outlook.
U.S. stock futures traded mixed Thursday, as an increase in consumer inflation and weakness in Apple shares because of disappointing Q2 outlook, offset stronger-than-expected housing data and another drop in jobless claims. The U.S. Labor Department said its consumer price index rose 0.5% in December, while core CPI increased 0.2%. Housing starts rose 4.5% in December to 1.64 million annualized units, above the 1.57 million expected by economists. According to another report, initial jobless claims fell to 290,000 from the previous week''s revised figure of 298,000. Analysts expected jobless claims to rise to 315,000.

On the corporate news front, Apple Inc. (AAPL: chart) reported soaring Q1 profit of 78%, well above Wall Street expectations, boosted by record sales of its iPod media players. Merrill Lynch (MER: chart) rose 0.9% ahead of the open after the brokerage giant said Q4 earnings rose 68%, lifted by stronger acquisition advisory fees and gains from its private equity business. The company posted earnings of 2.41 per share, sharply up from $1.41 per share last year, exceeding analyst forecasts. The brokerage also raised its quarterly dividend 40%. In other financial companies, Bank of New York (BK: chart) said its quarterly earnings rose above expectations.

Outside the sector, Lam Research (LRCX: chart) dropped 8.3% in the pre-open after the chip equipment maker released lower-than-anticipated quarterly forecast. Continental Airlines (CAL: chart) reported narrower Q4 losses. The carrier said it lost 4 cents a share, excluding a special charge of $22 million. Including the charge, the airline lost $26 million, or 29 cents a share. Analysts had expected a loss of 15 cents a share on revenue of $3.16 billion. S&P 500 futures gained 1.20 points to 1,440.00 but futures for the technology-rich Nasdaq 100 fell 5.75 points to 1,835.50. The Dow industrial futures added 16 points to 12,655.

Construction of new homes jumped 4.5% in December.
The Department of Commerce released its report on housing starts and building permits in the month of December on Thursday. The report showed that housing starts unexpectedly showed a significant increase compared to the previous month. The report said that housing starts rose 4.5 percent to an annual rate of 1.642 million units in December from the revised November estimate of 1.572 million units. Despite the increase, housing starts were down 18 percent compared to December of 2005. Economists had expected starts to fall to a 1.570 million unit rate compared to the 1.588 million unit rate originally reported for the previous month. The unexpected increase in housing starts was due in large part to strong growth in the Northeast and West, where housing starts rose 25.6 percent and 12.4 percent respectively. While housing starts in the Midwest edged up 1.8 percent, starts in the South fell 2.0 percent. The report also showed that building permits rose 5.5 percent to an annual rate of 1.596 million units from the revised November rate of 1.513 million units. Building permits are seen as an indication of future housing demand.

Consumer price index rose 0.5% in December.
Thursday morning, the Department of Labor released its closely watched report on consumer prices in the month of December, showing that prices increased slightly more than economists had been expecting. The report showed that the consumer price index rose 0.5 percent in December after coming in unchanged in the previous month. The increase came in slightly above economist estimates of a 0.4 percent increase. The slightly bigger than expected increase in consumer prices was due in large part to a rebound in energy prices, which rose 4.6 percent in December after falling in each of the three previous months. The index for petroleum-based energy rose 7.7 percent.

The increase in energy prices contributed to a 1.8 percent increase in transportation costs, which also rose after falling in the three previous months. Prices for housing and apparel also showed notable increases. The Labor Department added that the core consumer price index, which excludes food and energy costs, rose 0.2 percent in December after coming in unchanged in November. The modest increase came in line with economist estimates. On Wednesday, the Labor Department released a separate report showing that its producer price index rose 0.9 percent in December following an unrevised 2.0 percent increase in November. Economists had been expecting a more modest increase of about 0.5 percent. While the increase was largely due to higher food and energy prices, the core producer price index still rose 0.2 percent in December after rising 1.3 percent in November. The increase came in slightly above economist estimates of a 0.1 percent increase.