By sector, oil and metals stocks declined, while software, semiconductors and biotechnology advanced. In late morning trading, the Dow Jones industrial average was down 8.33, or 0.07%, at 12,665.35. The Standard & Poor's 500 index was up 1.61, or 0.11% at 1,447.55 and the Nasdaq composite index was up 6.40, or 0.26%, at 2,474.78. Bonds rose on the economic data, with the yield on the benchmark 10-year Treasury note falling to 4.82% from 4.83% late Thursday.

December factory orders rose more than expected.
The Department of Commerce released its report on factory orders in the month of December on Friday, showing that orders rose more than economists had been expecting after an upwardly revised increase for the previous month. The report showed that factory orders rose 2.4 percent in December following an upwardly revised increase of 1.2 percent in November. Economists had expected orders to increase 1.8 percent compared to the 0.9 percent increase originally reported for the previous month. The increase reflected growth in orders of both durable and non-durable goods, with orders for durable goods rising 2.9 percent while orders for non-durable goods rose 1.8 percent. The durable goods orders growth was revised down from the 3.1 percent increase reported previously. The report also showed that shipments rose 1.4 percent after a 0.2 percent increase in November, while inventories rose 0.1 percent following a 0.2 percent increase in the previous month. Subsequently, the inventories-to-shipments ratio fell to 1.22 from 1.23 in November.


9:45AM Market opened mixed on weaker-than-expected employment report.
U.S. stock markets opened mixed on Friday. Weaker-than-expected January employment report eased inflation concerns, but dragged economically-sensitive stocks on the Dow. The Labor Department report signaled employers were more cautious than anticipated in adding jobs in the new year. Shares in aluminum producer Alcoa (AA: chart) slipped 2.2%. General Motors (GM: chart) also weighed, falling 2.2% due to a big drop in January sales. In addition, Amazon (AMZN: chart) shares dropped 3.8% on concerns about thinning margins.

Among other companies in focus, Intuitive Surgical (ISRG: chart) surged 16.1% after reporting profit drop that came in above estimates. Video game publisher Electronic Arts (ERTS: chart) rose 6.3% on Q4 earnings that were well above analyst expectations. In midmorning trading Friday, the Dow Jones industrial average was down 0.32, or less than 0.01%, at 12,673.36. The Standard & Poor's 500 index was up 2.25, or 0.16%, at 1,448.19 and the Nasdaq composite index was up 7.14, or 0.29% at 2,475.52. Bonds rose on the jobs report, with the yield on the benchmark 10-year Treasury note falling to 4.82% from 4.83% late Thursday.


9:30AM NY-2:30PM London FTSE gains on Friday on likely bid for Sainsbury.
The UK market was higher on Friday. The FTSE 100 gained 42.4 points, 0.7%, to 6,324.6 in mid-day session.

Advancers

American KKR and Blackstone and London-based CVC said they were assessing a potential bid for J Sainsbury but were at the preliminary stage. Sainsbury jumped 18.3%, boosting other retailers. William Morrison gained 6.5% as Tesco firmed 3.2%, Kingfisher added 3.8% and Marks & Spencer put on 3.3%.

Housebuilders traded higher with Redrow advancing 1.7 per cent, Persimmon higher by 1.1% and Barratt Developments 0.8%.

Imperial Tobacco shares also advanced as JP Morgan took on board the chances of a bid for the group and repeated its overweight rating on the stock. The tobacco company traded 5.6%.

British Airways shares moved higher by 1.8% on mixed third-quarter results. The airline reported a 27% drop in operating profits but its revenue advanced 0.5% from a year ago.

Decliners

Royal Dutch Shell declined 1.1% after Goldman Sachs reduced its rating on the stock from buy to neutral.

Accountancy software group Sage shed 1% after Merrill Lynch downgraded the stock from buy to neutral on valuation grounds as the shares have climbed above its price target.

Vehicle salvage specialist Universal Salvage has received a bid offer worth, valuing the company at 57 million pounds. However, the stocks declined 1.32%.

Legacy software group Micro Focus says that revenue growth for this year should meet or marginally exceed the top end of its previously estimated range of 7% to 10%. Micro Focus dipped 0.2%.


9:00AM Market futures pointed higher, helped by upbeat employment report.
U.S. stock futures moved higher after a solid payrolls report indicated strength in the economy. The Labor Department reported that U.S. nonfarm payrolls increased by 111,000 in January, while the unemployment rate climbed to a four-month high of 4.6%. The new jobs added last month fell short of analyst expectations for a gain of 150,000. The report suggested that the jobs market started at a slower pace in 2007 and still remains in good shape.

Microsoft (MSFT: chart) also helped boost the sentiment, rising 1% in the pre-open after it was upgraded to buy from neutral at Banc of America Securities. Among other pre-market highlights, Amazon (AMZN: chart) shares dropped 2.8% on the margin worries. The retailer posted better-than-expected profit and sales and guidance for the year that exceeded analyst expectations. Chevron Corp. (CVX: chart) said its Q4 profit dropped 9% to $3.77 billion, or $1.74 per share, compared with net income of $4.14 billion, or $1.86 per share a year earlier. The earnings beat the average estimate by a penny. Revenue for the period totaled $47.7 billion, down 11% from $53.8 billion in the previous year. The stock inched up 0.01% in pre-opening trade.