Consumer price index dropped 0.5% in October.
The Department of Labor released its closely watched report on consumer prices in the month of October on Thursday, showing that prices fell more than expected due a steep decline in energy prices. The report also showed a smaller than expected increase in core consumer prices. The report showed that the consumer price index fell 0.5 percent in October, matching the decrease that was reported for September. Economists had been expecting a somewhat more modest decline of about 0.3 percent. The decrease in consumer prices was due in large part to a significant decline in energy prices, which fell 7.0 percent in October after falling 7.2 percent in September. Within energy, petroleum-based energy prices fell 10.7 percent, while prices for energy services fell 2.5 percent.

The core consumer price index, which excludes food and energy prices, edged up 0.1 percent in October after rising 0.2 percent in each of the three previous months. Economists had been expecting core prices to rise by 0.2 percent again. The drop in energy prices contributed to a notable decline in prices for transportation, which fell 3.1 percent in October after falling 4.1 percent in September. The report also showed that apparel prices fell 0.7 percent, while prices for medical care and education and communication increased. Food prices increased 0.3 percent for the second consecutive month.


9:00AM U.S. stock futures were little changed ahead of CPI data.
U.S. stock futures traded little changed Thursday morning, with investors awaiting consumer inflation data release. Inflation is seen lower by 0.3% in October, but the core measure, excluding food and energy prices, is expected to have rise by 0.2%. Weekly jobless claims, October industrial production and capacity utilization and the Philly Fed survey are also due out today.

Among companies in focus will be Hertz Global Holdings and KBR Inc., as two closely followed initial public offerings. Hertz (HTZ: chart), car-rental company, priced at $15 a share, below the expected range of $16 to $18 a share. The firm raised $1.32 billion. KBR (KBR: chart), a spin-off of Halliburton, priced at $17 a share, at the top end of its $15-to-$17 share range. The sale of KBR shares raised $441 million for the parent company.

Quarterly earnings reports are expected from Hewlett-Packard (HPQ: chart), Sears Holdings (SHLD: chart), Starbucks Corp. (SBUX: chart), and Gap Inc (GPS: chart). Dell Inc. (DELL: chart) was scheduled to release quarterly results Thursday, but postponed the quarterly financial report as the SEC stepped up its probe into the accounting practices of one of the personal computers maker. Dell shares declined over 2% in Germany. Applied Materials (AMAT: chart) also dropped in Germany after the chip-equipment maker forecasted sales below analyst estimates.

In corporate news, Wal-Mart Stores Inc. (WMT: chart) said Thursday it is expanding its $4 generic prescription program to 11 additional states and adding 17 more prescriptions to the program. The world''s largest retailer added 502 stores to those offering the discounted medications. In all, Wal-Mart is offering the program in 3,009 stores in 38 states. Wal-Mart said it intends to continue to push for expansion to other states as quickly as possible. Dow Jones futures were recently up 1 point, S&P 500 futures were off 0.9 point, and Nasdaq futures rose 0.2 of a point.


7:30AM Asian stocks finish mixed Thursday, Japan slips, HK surges.
Asian markets finished mixed on Thursday. The Nikkei 225 Average in Japan ended the session 0.5% lower at 16,163.87. Canon rose 0.2%, while consumer-electronics and entertainment conglomerate Sony retreated from earlier gains to end even on the day. Nintendo shed 2.6% after touching an all-time high in intraday trading.

Mitsubishi UFJ Financial Group saw its shares decline 2.7%. Business daily Nihon Keizai Shimbun reported on Thursday that the biggest bank by assets in Japan is considering raising its annual dividend to 10,000 yen a share, amid booming earnings.

The Hang Seng Index in Hong Kong rose 0.3% to 19,154.07, extending its record run after closing above the 19,000-level for the first time on Wednesday. Trading in Hong Kong was dominated by institutional investors building positions in Chinese financial stocks.

Shares of Bank of China soared 4.9% to a record close. Industrial & Commercial Bank of China gained 0.8%, but China Construction Bank fell 0.7%. The China Enterprises Index rose 0.9% to 8,312.41. The index all-time high is 9,452.86, set on Dec. 19, 1993.

Australia S&P/ASX 200 closed 0.7% lower at 5,392.60, New Zealand NZX-50 Index shed 0.5%, Indonesia JSX Composite lost 0.1% and South Korea Kospi eased 0.1%. Malaysia KLSE Composite gained 0.9%, Taiwan Weighted Price Index added 0.3%, Singapore Straits Times Index gained 0.8%, and Shanghai''s Composite Index rose 1%.


6:30AM European markets trade flat Thursday morning on banking stocks.
European markets traded flat in early session on Thursday. By mid morning, London FTSE 100 gained 0.1 % to 6,237.6, Frankfurt Xetra Dax was marginally lower at 6,428.54, and the CAC 40 in Paris fell 0.1 % to 5,507.39.

Advancers

In Europe, carmakers were in focus as Volkswagen shares rose 2 % on speculation that German rival Porsche was to make a full bid for the company after raising its stake to 29.9%.
Porsche, which J.P. Morgan upgraded to neutral from underweight, gained 4.2 %.

DaimlerChrysler shares gained 2.2% on speculation Mr Bernhard may be heading to the rival German manufacturer. Other carmakers also advanced. Renault gained 1.6%, while Peugeot added 3.7 %.


Decliners