4:00PM Market averages gained for three days in a row.

-Dow closed up 67.56 points, Nasdaq up 12.14 and S&P 500 up 7.28.
-Yield on 10-year bond closed at 5.05% and on 30-year bond closed at 5.16%.
-Crude oil gained 5 cents to close at $71.37 per barrel.
-Gold closed up $2.50 to $651 per ounce.

-Asian markets closed up close to 2% led by rise of 3.5% in Philippines and 1.8% in Japan. Thailand rose 2.4% and Korea rose 2.1%.
-European markets closed higher led by a rise in 4% rise in Norway and 2% rise in U.K.
-Latin American markets rose led by a steep rise of 6% in Argentina and 1% rise in Mexico and Chile. Brazil gained 2% on weaker inflation expectations in the U.S.

Market averages gained for the third day in a row after a period of weak sentiment starting May 10th. The lack of interest rate direction from the Fed left investors lurching from one economic report to the other for the last fifteen days and today was no different. After a steep fall in durable goods orders yesterday and fall in existing home sales, investors confronted inflation data. Core inflation for April was reported at 0.2% and after a rise of 0.3% in March. Inflation for the last 12-months came in at 2.1%. Fed has expressed that it is comfortable with core rate of inflation between 1% and 2%. Personal income rose 0.5% in April and consumption rose 0.6%. Market averages gained momentum in the last hour of trading and reached higher level.

The license for the casino-resort to be located in Singapore’s Marina Bay was awarded to Las Vegas Sands Corp (LVS: chart). today. The company’s bid for the casino-resort totaled $3.16 billion, topping the previous world’s most expensive casino, the Wynn Las Vegas (WYNN: chart), at $2.7 billion, which had been completed only last year. Sand’s expects to open the new casino in 2009. It also plans to involve competing rivals MGM (MGM: chart) and Harrah’s Entertainment (HET: chart). The casino is expected to be built on a 50.9 acre waterfront site near Singapore’s financial district.

3:15PM Steel stocks gained on hopes.
Steel stocks rose after a merger plan between Arcelor and Russian steel maker Severstal was released. Arcelor, Luxembourg based steel maker, fighting hostile bid from Mittal (MT: chart) Steel based in the Netherlands has agreed to merge with its long-time steel partner Severstal. Arcelor believes that the merger plan with Severstal creates better value for its shareholders and values the merger plan at euro 44 compared to deal proposed by Mittal Steel which is valued at euro 37.74. Arcelor and Severstal have been working together to produce steel for automobiles and other specialty steels for a while. Arcelor defending itself said that the merger between two specialty steel companies and transparent corporate governance will be better than its merger with Mittal. Mittal believes that this is a ‘second class’ deal. Fate of Arcelor will be decided by special meeting of shareholders. Steel stock rose as market forecasted that Mittal may now turn its eye on other steel makers. Corus (CGA: chart) rose 2%, U.S. Steel (X: chart) rose 4% and Nucor (NUE: chart) rose 3%. Fate of Arcelor is far from certain, which merger plans will be favored by investors is not clear. Both merger plans have their merits. Mittal gained 2.5% in New York trading. Arcelor is valued at $27 billon while Mittal is valued at $25 billion.

2:00PM Market averages maintained a positive bias.
Market averages maintained a positive bias in the afternoon trading as buyers showed enthusiasm on the third straight day. With more than two stocks advancing for every stock declining on NYSE three popular averages Dow, Nasdaq and S&P 500 clocked 0.5% gains. Financial brokerages, banks, airlines, hotels, casinos and industrial stocks led gainers. Tech, Internet and telecom stocks declined a fraction. It was hard to find a sector that was in a decline. Chico’s rose 2% or 60 cents to $30.54 on earnings. Chico’s FAS, Inc. (CHS: chart) met analyst’s average expectations of 29 cents a share in Q1 compared to 26 cents a share a year ago. Net income rose to $52 million from $47 million in the year-ago period. Q1 revenues increased 19.8% to $392 million from $327 million, which the company reports is a record.

12:30PM European markets rallied for a second straight session.
European stocks rallied for a second consecutive session, boosted mainly by resource stocks after Arcelor, fighting off a hostile bid from Mittal Steel, agreed to merge with Russian Severstal. Shares of Arcelor dropped 3%, while Mittal rose 2%, as well as other steelmakers like German Thyssenkrupp, up 4.8%, Corus, rising 3.4%, and Salzgitter, up 6.7%. A positive sentiment on Wall Street, generated by mild core inflation data, also provided support. Exchanges also advanced Friday after Credit Suisse upgraded Germany''s Deutsche Boerse and Euronext to outperform from under-perform. The German DAX 30 rose 1.4%, the French CAC 40 climbed 1.9%, and London FTSE 100 surged 2%.

Oil prices were steady ahead of the approaching U.S. driving season. Light crude July delivery gained 18 cents to $71.50 a barrel. London Brent crude lost 3 cents to $70.65. European gold was steady Friday. In London the precious metal fell slightly to $645.90 per ounce from $646. In Zurich gold traded unchanged at $643.70. London silver was unchanged at $12. The dollar advanced in European trading on economic data. The euro traded at $1.2712, down from $1.2793. The dollar bought 112.64 yen, up from 112.69. The British pound stood at $1.8707, down from $1.8717.


11:30AM Stocks posted modest gains.
Although stock markets advanced Friday, stocks were unable to sustain most of the gains as buying interest remained subdued ahead of the holiday weekend. The Nasdaq and S&P 500 dropped below the flat line for a while, but soon after that moved upside again. Most of the major sector indices showed modest gains only. However, the airline sector showed a significant strength, helped by Frontier Airlines (FRNT: chart) which rose 4.6% after the company reported a wider Q4 loss but said it expects to report a profit in the Q1. The Amex Airline Index was up 1.4%. The biotechnology sector was another notable mover to the upside, with Celgene (CELG: chart) continuing to post a notable gain after the FDA granted accelerated approval to Thalomid for the treatment of blood cancer. Brokerage stocks led gainers in the financial sector amid upgrades of Charles Schwab, Merrill Lynch and Goldman Sachs. Shares of Goldman Sachs (GS: chart) rose 2.3% after UBS upgraded its rating on the company''s stock to Buy from Neutral. Schwab (SCHW: chart) gained 2.3% after an upgrade to buy at Bank of America. Merrill Lynch (MER: chart) rose 1.9% after Wachovia upgraded the stock to outperform from market perform and cited a $4.4 billion goodwill transfer to BlackRock. Among other stocks, shares of Navistar (NAV: chart) climbed 14.7% after MAN AG confirmed that it is considering taking a stake in the truck and engine company. The Philadelphia Gold and Silver Index moved down 1.2%, reflecting weakness among some metal stocks as metal prices turned lower after seeing some early strength.


10:30AM Indian Sensex rebounds to close in an upbeat mood.
Sensex in India gained 143.03 points or 1.3% to close at 10,809.35. The Indian benchmark rose up to 11,050.77 in intra-day. The turnover on BSE came to $670 million or Rs 3,016 crore up from Thursday’s $830 million or Rs 3,750 crore. The market breadth was positive as 1,811 stocks advanced and 656 stocks that lost and 54 stocks remained unchanged. Automotive stocks led the gainers. Hero Honda soared 6% to Rs 848, TVS Motors advanced 5% to Rs 129, Bajaj Auto gained 4.4% to Rs 2,912 and Hindustan Lever rose 3.3% to Rs 245. Steel shares also gained. Tata Steel advanced 5% to Rs 539, SAIL rose 7% to Rs 83.30 and JSW Steel jumped 9.5% to Rs 281. Cipla surged 5% to Rs 234.60 on 0.7 million shares changed hands on BSE. Infosys advanced almost 3% to Rs 2,920.50 after its ADR in New York trading rose 5.3% on Thursday to $72.37. The stock though finished off its high of Rs 2,965.

Reliance Communication Ventures rose 6.6% to Rs 275 on the ruling that it can access to telephone switched and international landing junctions for telecom traffic in an International Court of Arbitration. The ruling permits Reliance to route international calls through VSNL telecom infrastructure. L&T advanced 3% to Rs 2,368 but the stock closed below its high of Rs 2,475. L&T’s board meets on 7 June to consider bonus issue. Metal shares closed higher as buyers hunted for bargains following a recent steep decline in their prices. Hindustan Zinc advanced 6% to Rs 698, Sterlite Industries rose 3.5% to Rs 408 and Nalco edged 3.4% higher to Rs 258. But Hindalco declined 0.3% to Rs 185.

Several construction companies advanced. Nagarjuna Construction soared 7.4% to Rs 350, IVRCL Infrastructures surged 6.5% to Rs 244.55, Tantia Construction rose 5.8% to Rs 178, Sadbhav Engineering added 5% to Rs 389.85. Indian Oil Corporation advanced 3.7% to Rs 469. The company posted today a strong Q4 March 2006 net profit to of $900 million or Rs 4,031 crore.


9:45AM Stocks advanced on personal income and spending data.
Stocks moved to the upside at opening after posting a significant strength in Thursday session. The early positive sentiment was generated by key economic data on personal income and spending which raised hopes that interest rates have risen enough to keep economic growth under control. The inflation component of the Commerce Department''s report on personal income and spending showed that consumer prices, excluding food and energy prices, rose 0.2% in April after a 0.3% increase in March. However, core prices rose at an annual rate of 2.1% in April compared to the 2% annual rate of growth seen in the previous month. The increase in April marked the fastest annual rate of growth since March of 2005.

The broker/dealer sector moved significantly higher, up 1.8%. The airline sector was another notable mover to the upside, up 1.2%, helped by a slight moderation in oil prices, ticked up by 1.2%. Gold and energy stocks posted weakness in the opening hours of Friday trading. In the opening minutes, the Dow Jones industrials climbed 32.02 points to 11,243.07, the Nasdaq Composite rose 8.41 points to 2,206.65, and the S&P 500 gained 2.54 points to 1,275.42. Bonds stayed flat despite the mild economic news, with the yield on the 10-year Treasury note unchanged at 5.07 percent from late Thursday.


Personal income grew less than expected, while personal spending growth met expectations.
Friday morning, the Department of Commerce released its report on personal income and spending in the month of April. The report showed that personal income rose less than expected while personal spending growth met expectations. The Commerce Department said that personal income increased by 0.5 percent in April, matching the increase seen in the previous month. Economists had been expecting personal income to increase by about 0.7 percent. At the same time, the report also showed that personal spending rose 0.6 percent in April following a downwardly revised 0.5 percent increase in March.

The increase in personal spending came in line with economist expectations. Nonetheless, many traders were focused on the inflation component of the report, which showed that consumer prices, excluding food and energy prices, rose 0.2 percent in April after a 0.3 percent increase in March. The report also showed that April consumer prices, excluding food and energy prices, rose 2.1 percent year-over-year compared to the 2.0 percent annual rate of growth seen in the previous month. The increase in April marked the fastest annual rate of growth since March of 2005. The faster pace of inflation may raise some concerns about the outlook for interest rates, as the Federal Reserve has said that its upcoming decisions on rates will be heavily dependent on the outlook provided by incoming economic data.