9:45AM U.S. markets opened higher, boosted by productivity report.
Wall Street started trading moderately higher on Thursday, as stronger-than-expected Q1 productivity growth and a modest increase in labor costs helped generate some optimism about the outlook for interest rates. However, the upside move was limited by 3% decline for General Motors (GM: chart) amid 90% profit drop. Among other earnings-related movers, CBS (CBS: chart) added 0.6% after it said quarterly profit fell 5.9%, hurt by a tax charge selling radio stations and lower TV syndication income. At the same time, its adjusted earnings per share were slightly above analyst expectations.

Martha Stewart Living Omnimedia (MSO: chart) posted wider Q1 loss, weighed down by a charge associated with production of its syndicated TV program. The multimedia empire reported a loss of 23 cents per share, compared with a loss of 13 cents per share last year. Company's stock dropped 1.7%. European largest oil copmpany Royal Dutch Shell PLC ((RDS-B)) said its Q1 earnings rose 5.7%, despite falling oil prices and declining profit at its production and refining arms.

In corporate news, Russia's Norilsk Nickel, the world's largest nickel producer, offered to buy Canada's LionOre Mining International for $4.8 billion in cash, seeking to break up Xstrata's agreement to buy the company. The Dow Jones Industrial Average was up 7 points at 13,218. The S&P 500 was up 1.75 points at 1,497, while the Nasdaq Composite rose 0.6 points to 2,558.


Labor productivity rose 1.7% in Q1.
The Department of Labor released its preliminary report on productivity and labor costs in the first quarter on Thursday, showing productivity growth that exceeded economist expectations and labor cost growth that slowed substantially from the fourth quarter. The report showed that productivity in the non-farm business sector rose 1.7 percent following a revised 2.1 percent increase in the fourth quarter. Economists had expected productivity growth of 0.8 percent compared to the 1.6 percent growth originally reported for the previous quarter.

The stronger than expected productivity growth came as output increased by 1.4 percent, while hours worked decreased by 0.3 percent. In the fourth quarter output and hours increased by 2.9 percent and 0.8 percent, respectively. The first quarter productivity growth also reflected a 2.7 percent increase in productivity in the manufacturing sector, which compares to a 1.9 percent increase in the fourth quarter.

The Labor Department added that the pace of growth in unit labor costs slowed to 0.6 percent in the first quarter from a revised 6.2 percent in the fourth quarter. The unit labor cost growth in the fourth quarter was originally reported at 6.6 percent. The increase in unit labor costs in the fourth quarter was due in large part to big bonuses paid to high-income workers.


First-time jobless claims dropped 21,000.
Thursday morning, the Department of Labor released its report on initial jobless claims in the week ended April 28, showing that jobless claims unexpectedly fell compared to an upwardly revised reading for the previous week. The report showed that jobless claims fell to 305,000 from the previous week''s revised figure of 326,000. Economists had expected jobless claims to rise to 325,000 from the 321,000 originally reported for the week ended April 21.

The Labor Department also said that the less volatile four-week moving average fell to 328,750 from the previous week''s revised average of 333,250. Additionally, the report showed that continuing claims in the week ended April 21 dropped to 2.495 million from the preceding week''s revised level of 2.588 million. The unexpected decrease in initial jobless claims may generate some optimism about the April employment report that is due to be released on Friday. Economists expect the report to show an increase of about 100,000 jobs.


9:30AM FTSE 100 rallies on strong earnings results from Unilever, Royal Dutch Shell.
The UK benchmark hit a new record on Thursday.

The FTSE 100 hit 6,530.4 in early exchanges, its highest level since 2001. By mid-day, the FTSE 100 index advanced 30.6 points to 6,515.2.

Advancers

Prudential led the advancers on reports that some shareholders were insisting on a break-up of the life assurer. The shares rose 5.1 per cent.

Consumer goods company Unilever gained 5.1 per cent as it reported a 5 per cent rise in first-quarter pretax profit. Same-store sales rose 4.3 per cent while margins also improved.

Royal Dutch Shell advanced 1.8 per cent o £18.40 on earnings of $6.9 illio in the first quarter compared to $6.1 billion a year ago and topped forecasts with a 14 per cent rise in net profit.

ICI gained 1 per cent on a 12 per cent growth in profit before tax. The paints and chemicals company also announced its outlook for the second quarter remained positive and expectations for the year as a whole remained unchanged.

British American Tobacco announced first-quarter profit from operations advanced 11 per cent, also beating expectations. The cigarette group gained 1.3 per cent

Decliners