1:00PM NY, 5:00 PM Frankfurt European stocks closed down amid weak mining and automotive stocks.

European stock markets closed in the negative territory on Thursday, dragged down by weakness in the mining sector and declines from automakers. Gains posted by Air France-KLM and telecommunications players such as Cable & Wireless failed to lift sentiment. Miners were notable losers, with shares of Lonmin and Vedanta Resources each falling 3%. Investors were worried that recent strong demand for base metals from China could dry up in a market correction. Automotive stocks weighed on the sentiment, with Volkswagen and Porsche both moving down.

Telecoms stood out among gainers. Cable & Wireless rose 2.8% after it said that performance at some of its operations is recovering ahead of schedule. Again in the sector, Vodafone Group advanced for the second day, rising 1.2%.Shares in Nordic stock exchange operator OMX rose 3.2% before they were suspended. The U.K.''s FTSE 100 lost 0.8% at 6,565.40, the French CAC-40 slipped 1.2% at 6,048.31 and the German DAX Xetra 30 fell 0.5% at 7,697.38.


11:30AM Market retreated from strong rally on soaring new-home sales.

U.S. stocks retreated after the initial enthusiasm over a report which showed that new homes sales in April soared to a 14-year high, dampening hopes that the Fed Reserve will cut interest rates to stimulate the economy. The Commerce Department said sales of single-family homes jumped 16.2% last month. Homebuilders Hovnanian Enterprises Inc. (HOV: chart) and KB Home (KBH: chart) advanced about 1%.

Buying interest was boosted by news that Advanced Medical Optics (EYE: chart) considers offering Bausch & Lomb (BOL: chart) a higher price than the $3.67 billion offered by a private equity group. Bausch & Lomb gained 4%. By sector, airlines, financials and consumer issues advanced, while software shares declined.

In midday trading, the Dow Jones industrial average fell 3.09, or 0.02%, to 13,522.56. The Standard & Poor''s 500 index was down 5.09, or 0.33%, at 1,517.19, and the Nasdaq composite index fell 21.18, or 0.82%, to 2,555.87. Bonds fell, with the yield on the benchmark 10-year Treasury note rising to 4.88% from 4.86% on Wednesday.

New home sales soar 16.2% in April.
Thursday morning, the Department of Commerce released its report on new home sales in the month of April, showing that sales rose much more than economists had expected. The increase reflected strong sales growth in the South. The report showed that new home sales surged up 16.2 percent to an annual rate of 981,000 units in April from the revised March rate of 844,000 units. Economists had expected sales to edge up to an 860,000 unit rate from the 858,000 unit rate originally reported for the previous month.

The stronger than expected sales growth was partly due to a 27.8 percent increase in new home sales in the South. New home sales in the Northeast and West rose 3.8 percent and 8.5 percent respectively, while new home sales in the Midwest fell 4.0 percent. The Commerce Department also said that the median sales price of new houses sold in April was $229,100. This marks a steep decline from the median sales price of $257,600 in March. The report also showed that the seasonally adjusted estimate of new houses for sale at the end of April was 538,000, representing a supply of 6.5 months at the current sales rate.


9:45AM U.S market averages opened mixed. Strong durable goods orders gave a boost.

Wall Street opened mixed Thursday, reflecting better-than-expected economic data and cautiousness ahead of new home sales report. Toll Brothers'' unwillingness to provide an earnings outlook also weighed.

However, market sentiment improved, following data release which showed that new home sales increased more than economists had expected, boosting optimism about economic growth and corporate profits. The Commerce Department said that sales of new U.S. homes unexpectedly surged 16% in April, to a seasonally adjusted annual rate of 981,000, exceeding the 865,000 pace expected. The upbeat news helped Toll Bros (TOL: chart) recover from early weakness, sending its stock up 3%. It earlier fell after reporting 79% drop in Q2 earnings.

Signs of strength in business investment offset higher-than-expected jobless claims data, with durable goods orders rising 0.6% in April, boosted by strong demand for metals and capital equipment. Among companies in focus, Dow member Boeing (BA: chart) rose 2% after it affirmed its earnings outlook for 2007 and 2008. At the same time, General Motors (GM: chart) dropped 1.3% after saying it sees a $7 billion exposure from helping Delphi get out of bankruptcy.

Among earnings-related movers, apparel retailers Gymboree (GYMB: chart) and Abercrombie & Fitch (ANF: chart) rose 11% and 3%, respectively after their quarterly results. The Dow Jones jumped 80 points to 13,606, after hitting a new record high of 13,624. The S&P 500 gained 4.5 points to 1,526, while the Nasdaq rose 4.3 points to 2,581.


Initial jobless claims advanced 15,000.
The Department of Labor released its report on initial jobless claims in the week ended May 19 on Thursday, showing that jobless claims increased by more than economists had been anticipating after trending lower in recent weeks. The report showed that jobless claims rose to 311,000 from the previous week''s upwardly revised figure of 296,000. Economists had expected jobless claims to rise to 305,000 from the 293,000 originally reported for the previous week. The Labor Department also said that the less volatile four-week moving average fell to 302,750 from the previous week''s revised average of 306,250. Additionally, the report showed that continuing claims in the week ended May 12 rose to 2.529 million from the preceding week''s revised level of 2.471 million.

Durable goods orders rose 0.6%.
Thursday morning, the Department of Commerce released its advance report on durable goods orders in the month of April, showing that orders for goods meant to last at least three years rose a little less than economists had been expecting. The report showed that durable goods orders rose 0.6 percent in April following an upwardly revised 5.0 percent increase in the previous month. Economists had been expecting orders to increase by about 0.9 percent compared to the 4.3 percent increase previously reported for March. The increase in durable goods orders was partly offset by a decrease in orders for transportation equipment, which fell 1.3 percent in April after surging up 13.6 percent in March. A drop in orders for commercial aircraft more than offset a rebound in orders for defense aircraft.

Excluding orders for transportation equipment, durable goods orders rose by 1.5 percent in April, matching the increase that was seen in the previous month. Orders for primary metals, fabricated metal products, and electrical equipment, appliances, and components showed notable increases. The report also showed that shipments of durable goods rose 1.9 percent in April following a 1.3 percent increase in March. The continued increase in shipments was partly due to a rebound in shipments of computers and electronic products. The Commerce Department added that inventories of durable goods rose 0.5 percent in April after rising 0.1 percent in March. Inventories of transportation equipment had the largest increase.