U.S. MARKET AVERAGES

U.S. stocks opened modestly lower as oil prices surged on a report of a terror attack against a Saudi Arabian refinery. In addition, a disappointing report on durable goods orders contributed to the weakness.

The Commerce Department reported that durable goods orders fell 10.2% in January, the biggest drop in 5 1/2 years and far less than the 0.1% drop economists expected.

In merger-and-acquisition news, British power company National Grid Plc announced it was in talks with KeySpan Corp. Negotiations are likely to lead to a $7 billion takeover of the U.S. natural gas distributor.

Technology shares were pressured after Dow component Intel Corp (INTC: chart) was downgraded to 'market perform' from 'outperform' by Friedman Billings Ramsey, citing lower demand and increased competition. The stock price target was lowered to $23 per share from $31 per share.

Having had a choppy week, energy stoicks advanced Friday. The energy group pushed higher in early trading as crude prices climbed on reports of trouble in Saudi Arabia and sent the oil sector up about 1.5%.

The rise in oil prices sent shares of airline companies lower in Friday''s early trading. The sector attempted to move above a recent trading range in Thursday''s trading but finished the day in the negative territory. The slide continued Friday with the sector falling by about 1.2%.

In the first hour of trading, the Dow Jones industrial average fell 22.58, or 0.2%. The Standard & Poor''s 500 index lost 0.38, or 0.03%, and the Nasdaq composite index dropped 5.05, or 0.22%.

Bonds edged higher, with the yield on the 10-year Treasury note falling to 4.55% from 4.56% late Thursday.

MOVERS AND SHAKERS

Texas Industries (TXPI: chart) agreed to acquire the U.S. butadiene and related methyl tert-butyl ether operations from Huntsman Corp. for $275 million, which earlier this week agreed to buy the textile effects unit of Ciba Specialty Chemicals. The manufacturing facility has a capacity of approximately 900 million pounds of butadiene per year and approximately 11,000 barrels per day of MTBE. The company’s shares climbed 10%.

Chesapeake Energy Corp (CHK: chart) reported Q4 net income jump of $452.5 million, or $1.11 a share, compared with $208.5 million, or 52 cents a share, during the year-earlier period. Revenue advanced to $1.75 billion, compared with $942.1 million last year, exceeding estimates for revenue of $1.23 billion. The company’s shares gained 3.7%.

Westwood One (WON: chart) reported Q4 net income decline of $24 million, or 27 cents a share, down from $29.6 million, or 31 cents a share in the year-ago period. Revenue fell to $147 million from $152 million. The quarterly results failed to meet forecasts for earnings of 28 cents a share and revenue of $147.9 million. For Q1 of 2006, the company expects double digit declines in operating income before depreciation and amortization. The stock dropped 18%.

Midway Games (MWY: chart) reported a Q4 net loss of $37.8 million, or 42 cents a share, compared with net income of $17.6 million, or 19 cents a share last year. Revenue rose to $69.8 million from $77.2 million last year. For 2006, Midway expects a net loss of $66 million on a 3% revenue growth of $155 million. For Q1 the company projects revenue of $13 million, with a net loss of $22 million. The stock slipped 10.2%.

Nordstrom (JWN: chart), retailer, posted Q4 net income rise of $190.4 million, or 69 cents a share, compared with $140 million, or 50 cents a share a year ago, beating estimates by a penny. Revenue rose to $2.3 billion from $2.1 billion reported last year. The company expects to earn $2.15 to $2.23 a share for 2006, below estimates of $2.24. Company's shares fell 5.5%.

ECONOMIC NEWS

Friday morning, the Department of Commerce released its report on durable goods orders in the month of January, a reading of the demand for goods that are expected to last for at least three years. The report showed that orders fell far more than anticipated

The Commerce Dept. said that durable goods orders fell 10.2 percent in January following an upwardly revised increase of 2.5 percent in December. Economists had expected a much more modest decline of 1.2 percent compared to the 1.3 percent increase originally reported for December.

The report showed that the decrease was largely due to a sharp drop in new orders for transportation equipment, which fell by 31.2 percent in January after rising by 3.6 percent in December. The drop in orders for transportation equipment reflected a steep decline in orders for commercial aircraft and parts.

Excluding the transportation sector, new orders for durable goods rose by 0.6 percent compared to a 1.9 percent increase on the same basis in December.

The Commerce Dept. added that shipments of durable goods fell 1.3 percent in January following a 4.1 percent increase in December, while inventories of durable goods rose 0.3 percent in January, marking the fifth consecutive month of growth.