11:30AM U.S. markets lost direction. AMD gained despite lowered revenue forecast.

U.S. stocks traded mixed on Monday morning, reflecting cautiousness ahead of Q1 earnings season and modest support provided by deal news and a delayed reaction to Friday''s robust jobs report. Dow Chemical (DOW: chart) jumped 5% on speculations that the company is likely to become a target of $50 billion. Further in deal news, Citigroup (C: chart) was little changed after saying it will buy Taiwan''s Bank of Overseas Chinese for about $426 million in cash. Among other Dow components, Intel Corp. (INTC: chart) and Dupont (DD: chart) offered support, rising 2.8% and 0.5% respectively. Tech stocks traded mixed. Shares of Advanced Micro Devices (AMD: chart) rose 4% although it lowered its Q1 revenue forecast and said it would aim to cut $500 million in capital spending in 2007.

Semiconductor equipment makers Applied Materials Inc.(AMAT: chart) and KLA Tencor Corp. (KLAC: chart) declined 0.2% and 1.3%, respectively. In late morning trading, the Dow Jones industrial average rose 7.07, or 0.06%, to 12,567.27. The Standard & Poor''s 500 index was up 1.37, or 0.09%, at 1,445.13, and the Nasdaq composite index rose 2.22, or 0.09%, to 2,473.56

11:00AM U.S. markets lost direction. Transportation stocks rose.

U.S. stock markets failed to sustain the initial strength and turned to lackluster trading. Despite the pullback by the major averages, the transportation sector moved notably higher, led by Burlington Northern (BNI: chart). The railroad company jumped 7.1% on the heels of news that Warren Buffett''s Berkshire Hathaway became the biggest shareholder, as he bought a 10.9% stake in the railroad company. Berkshire ((BRK-A)) had accumulated 39 million shares of the second- largest U.S. railroad, paying between $81.18 and $81.80 for the final 1.6 million. Some chemical stocks also showed strength, with shares of Dow Chemical (DOW: chart) up 5%.

At the same time, airline stocks came under pressure although the price of oil continued to fall after showing a notable decline last week. Some weakness was also visible in the semiconductor sector. Maxim Integrated Products (MXIM: chart) and Micron Technology (MU: chart) turned in two of the sector''s worst performances, falling 1.1% and 2.1% respectively. On the side of the gainers, Advance Micro Devices (AMD: chart) rose 4.7% even though the chip maker warned of weaker-than-expected Q1 revenues.


9:45AM U.S. stocks opened higher, boosted by deal talk and jobs data.

U.S. stock markets saw a positive start of Monday trading session, lifted by news that Dow Chemical is the target of $50 billion leveraged buyout, as well as easing economic growth concerns on the back of robust jobs report. The advance added to last week''s gains, which helped the major indexes return to positive territory for the year.

In corporate news, Dow Chemical (DOW: chart) was sent 6.6% higher by a report, saying that the break-up bid for Dow Chemical would be between $52 and $58 a share, valuing the company at a minimum of $50 billion. In other deal news, Dow component Citigroup (C: chart) lost 0.1% after it agreed to buy Taiwan''s Bank of Overseas Chinese for about $426 million in cash.

Among companies in focus, American Home Mortgage (AHM: chart) tumbled 16% after the company cut its earnings outlook by more than 25% and slashed its quarterly dividend by about 38%. As a result, the company''s stock was downgraded both at Citigroup and Lehman Bros. Shares of Ariad Pharmaceuticals (ARIA: chart) slipped 12% after the company said that it may delay patient enrollment for its Phase III trial for cancer drug AP23573 to Q3 from Q2.

Sanmina-SCI shares (SANM: chart) dropped 4.2% after the electronics contract manufacturer warned the Q2 revenue would miss its previous estimate. In the first hour of trading, the Dow Jones industrial average rose 13.89, or 0.11%, to 12,574.09. The Standard & Poor''s 500 index was up 1.71, or 0.12%, at 1,445.47, and the Nasdaq composite index added 3.02, or 0.12%, to 2,474.36. Bonds regained some traction after falling in a shortened session Friday on the employment report. The yield on the benchmark 10-year Treasury note fell Monday to 4.73% from 4.75%.


9:00AM U.S. stock futures pointed to a higher opening, helped by jobs data.

Wall Street looked poised for higher reopening after the three-day Easter holiday. U.S. stock futures rallied, boosted by stronger-than-expected jobs data in March and a report that Dow Chemical Co. is the target of a $50 billion buyout offer. On Monday, investors had their first chance to react to a Labor Department report which said Friday that nonfarm payrolls expanded by 180,000 in March, while the unemployment rate slipped to 4.4% from 4.5% in February.

Economists had been expecting jobs growth of 168,000 and a jobless rate of 4.5%, on average. The jobs data raised some hope that growth was stronger-than-expected during the quarter, soothing concerns of economic slowdown before the Q1 earnings season. On the other hand, the robust jobs data significantly reduced the odds of an interest rate cut in the near future.

Dow Chemical (DOW: chart) was in focus on speculations that a consortium of Middle Eastern investors and American buyout firms will launch a $50 billion bid to acquire the company. Kohlberg Kravis Roberts & Co., one of the biggest U.S. private equity firms is said to be one of the bidders. The stock rose 8.4% in the pre-open trading. In corporate news, Citigroup (C: chart) said it agreed to buy Taiwan''s Bank of Overseas Chinese for $426 million. The deal is expected to complete in the second half of 2007. Company''s stock gained nearly 1% in the-open.

Among companies driven by analyst comments, American Home Mortgage (AHM: chart) tumbled 19.3% after the company cut its earnings outlook by more than 25% and slashed its quarterly dividend by about 38%. Consequently, Lehman Bros. downgraded the stock to equal weight from overweight, and cut its price target to $20 from $45. Citigroup cut its rating to sell from hold and its price target to $19 from $26. Lehman Bros. downgraded Murphy Oil (MUR: chart) to equal weight from overweight, citing valuation. Sanmina-SCI shares (SANM: chart) dropped nearly 3% in pre-market trading after the electronics contract manufacturer warned the Q2 revenue would miss its previous estimate due to weak demand in the communications market. S&P 500 futures climbed 5.10 points to 1,457.80 and Nasdaq 100 futures hiked up 7.75 points to 1,836.00. Dow industrials futures ran up 40 points to 12,662.


8:15AM Dow Chemical soars on bid speculations of $50 B.