U.S MARKET AVERAGES

The Dow Jones industrial average was up 68.36 to 10,371.80, the broader Standard & Poor's 500 dropped 1.02 to 1,203.97 and the Nasdaq composite lost 2.33 to 2,076.42.

The semiconductor sector, which recovered from a 6-week low level Tuesday, is now gaining ground at the first half trading hour Wednesday.

The energy segment extends its peak and performs strong again.

The airline sector declines in the first half trading hour. Paper products stocks are also lower.

The 10-year Treasury note gained 6/32, or $1.875 per $1,000 invested, to yield 4.09%. The 30-year note advanced 10/32 to yield 4.349%. Yields move inversely to prices.

Walgreens' Chicago-area pharmacists' union called for a work stoppage on Wednesday, as the retailer and its employees start preparing a new labor agreement.

General Electric's (GE: chart) GE Commercial Finance unit agreed to buy about $1 billion in aircraft assets from CIT Group.

Concerto Software agreed to acquire rival call-center technology outfit Aspect Communications for $1 billion in cash.

ECONOMIC NEWS

The Institute for Supply Management is expected to announce its non-manufacturing index for June. Economists forecast a reading of 58.2 versus 58.5 in May.

INTERNATIONAL MARKETS

Asian-Pacific markets closed mixed. Japan’s Nikkei opened higher but reversed course as investors sold technology blue chips following recent gains and closed down 0.1%. Hong Kong’s Hang Seng added 0.2% helped by exporter gains while China’s Shanghai Composite lost o.5%. After several days of continuous gains the dollar weakened against the yen and in late Tokyo trading quoted at 111.64 yen.

The strength in markets in Mumbai, India was at display again. The new foreign funds investing in India drove banking mining and cement stock to new highs. Tokyo market closed down 0.11% but most large cap stocks with export bias advanced as dollar gained against yen the day’s trading. Shares in Hong Kong were up 0.2% led by CNOOC rise of 3.7% and similar gains in Sinopec and Petrochina. Trading firm Li & Fug advanced 1.7%. In Korea Samsung Electric was up 1.1%. Philippines shares were mostly unchanged.

All European markets gained at mid-day dealings supported by optimism in U.S. economy and merger-and-acquisition news. Germany’s DAX 30 added 0.6%, France’s CAC 40 climbed 0.7% helped by food and beverage and technology stocks, and London’s FTSE 100 rose 0.4% supported by drug makers, oil and airline companies. The euro was slightly lower against the dollar at $1.1904, and the pound was also lower at $1.7536.

French carmaker Peugeot expects moderate sales increase in 2005 after posting firs-half sales growth of 0.6% as demand rose in France 5.6%. In Central and Eastern Europe demand declined, as expected, from the high levels seen in the first half of 2004 when demand was great in anticipation of prices rises upon joining the EU.

OIL, METALS AND CURRENCIES

Oil prices rose once more above $60 a barrel on approaching hurricane threat in the oil-producing U.S. Gulf of Mexico and raised concerns over refiners’ ability to produce enough to satisfy demand. U.S. crude-oil futures gained 60 cents to $60.19 and London Brent rose 52 cents to $58.81 a barrel.

Gold prices rose in line with strong dollar. In London gold futures traded at $423.85 per troy ounce, up from $422.70. In Zurich the bid price was $424.68. In Hong Kong the precious metal fell to close at $424.35 bid per troy ounce. Silver traded in London at $6.87, up from $6.84.

The U.S. dollar rose against other major currencies in early morning European trading. The euro was $1.1906, down from $1.1914 late Tuesday in NY. The dollar bought 111.85 yen, up from 111.72, and the British pound quoted at $1.7536, down from $1.7550.