U.S. MARKET AVERAGES

U.S. stocks started trading in the positive after major companies like drug maker Pfizer and brokerage Merrill Lynch released better-than-expected profits to ease investors’ concern about quarterly earnings. Stocks were also supported by an upbeat first-quarter outlook from semiconductor maker Advanced Micro Devices Inc.

Home Depot (HD: chart), home improvement retailer, gave a long-term growth plan and provided guidance for 2006. The company announced a 50% increase in its Q4 dividend. It expects to post annual sales growth of 9%-12% over the next 5 years, driven by 400-500 new store openings, as well as growth in its services business and in Home Depot Supply. For fiscal 2005, which is 2 weeks away from completion, Home Depot predicted a profit of $2.64-$2.67 per share.

Technology led the advance in the early going with the semiconductor sector posting an advance of 2.5%. AMD (AMD: chart) was the biggest driver in the chip segment, climbing by more than 10% on its quarterly results.

The housing sector was a significant drag in the first hour of the session, hurt by sharper-than-expected drop in December housing starts. The decline was less than 1%.

Millicom International Cellular (MICC: chart) was one of the biggest gainers in the early going with an advance of 28% after it announced that, due to a high number of recent unsolicited approaches, it has decided to conduct a review of its strategic options.

Logitech International (LOGI: chart) was among the most notable decliners with a drop of 15% on earnings and guidance released after Wednesday's close.

In the first hour of trading, the Dow Jones industrial average rose 18.49, or 0.17%. The Standard & Poor''s 500 index rose 3.48, or 0.27%, and the Nasdaq composite index rose 14.01, or 0.61%.

Bonds fell, with the yield on the 10-year Treasury note rising to 4.36% from 4.34% late Wednesday.

MOVERS AND SHAKERS

Pfizer Inc (PFE: chart) reported Q4 net income of $2.7 billion, or 37 cents a share, off from $2.8 billion, or 38 cents a year ago, missing estimates of 42 cents a share on revenue of $13.2 billion. Pfizer's quarterly sales slipped 9% to $13.59 billion from $14.92 billion. Global sales of Lipitor, the world's best-selling medicine, totaled $3.4 billion in the latest quarter, up 3% from the previous year, while Viagra sales skidded 8%. The stock rose 2.7%.

International Game Technology (IGT: chart), maker of gaming machines, reported Q1 earnings of $120.6 million, or 34 cents a share, down from a year-ago profit of $122.4 million, or 33 cents a share, exceeding estimates of 27 cents a share on $562.3 million revenue. Revenue fell to $616.2 million from $641.2 million in the same period a year earlier. The company’s shares soared 9%.

Lehman Brothers (LEH: chart), investment bank, increased its annual dividend by 20% to 96 cents a share from 80 cents a share. The dividend for Q1 is 24 cents a share. 10. The company approved of the repurchase of 40 million shares of stock in 2006, plus an additional 15 million shares for the possible acceleration of repurchases to offset a portion of 2007 dilution due to employee stock plans. The stock advanced 1.9%.

Merrill Lynch (MER: chart) announced Q4 net income rise, citing growth in all three of its business segments. The company said it earned $1.5 billion, or $1.51 a shares in the fourth quarter, compared to $1.19 billion, or $1.19 a share a year ago, beating estimates of $1.30 a share. Total net revenue rose to $6.78 billion from $5.91 billion a year ago. The company also boosted its quarterly dividend by 25% to 25 cents a share. The stock gained 1%.

ECONOMIC NEWS

The Department of Energy's Energy Information Administration revealed that crude oil inventories climbed by 2.7 million barrels for the week ended January 13, rising to 321.4 million barrels from the prior week's level of 318.7 million barrels. This followed a decline of 2.9 million barrels in the previous week. Oil inventories were 12% higher than their levels of the same time last year.

Gasoline inventories posted a week-over-week increase of 2.8 million barrels, the government said, adding to the previous week's increase of 4.5 million barrels. Gasoline stocks were 3% below their levels of last year. Inventories of distillate fuel oil rose by 900,000 barrels in the most recent week.

Housing starts fell more than expected in the month of December, according to a report from the Department of Commerce, although despite the decline housing starts for the full year reached their second highest level on record.

The report showed that housing starts fell 8.9 percent to a seasonally adjusted annual rate of 1.933 million units in December from a 2.121 million unit rate in November. Economists had expected a more modest decline to a 2.05 million unit rate.

The decrease in December housing starts reflected double-digit percentage declines in the Northeast, the Midwest, and the West. The South bucked the downtrend, with housing starts in the region increasing by 5.2 percent.