1:00PM NY, 5:00 PM Frankfurt European stocks rebounded from Wednesday’s losses.

European stock markets gained ground on Thursday, posting solid gains which managed to offset the steep declines of the previous trading session. The positive market sentiment was generated by optimistic comments on the U.S. economy, as well as strength posted by utility giant E.On and technology firm ASML.

Germany’s E.On rose 4.1%, reaching a ten-year high. The company said that it plans to buy back up to 10% of its shares by the end of 2008 and increase dividends by 10% to 20% a year on average by 2010. Again in the sector, shares of German RWE rose 3%, while Scottish & Southern added 0.9% in London on strong full-year profit growth.

Technology and resources stocks ASML Holding rose 5% after the chip-equipment maker said it will return 960 million euros to shareholders via a capital repayment and reverse stock split. Among miners, BHP Billiton advanced 1.7%, Norsk Hydro increased 3% on Q1 profit rise, and the French steel-tube maker Vallourec climbed 5.6% on bid speculation.

The German DAX 30 increased 1.5% at 7,883.04, the French CAC-40 rose 1% at 6,104.00, while the U.K.''s FTSE 100 advanced 0.3% at 6,621.40.


11:30AM Market averages posted gains, buoyed be deal news.

U.S. market averages posted gains Thursday morning, buoyed by another wave of takeover deals which helped offset weaker-than-expected economic growth in Q1. Better-than-expected data on jobless claims and construction spending also generated positive sentiment.

Brokerage stocks stood out among gainers, led by A.G. Edwards (AGE) which advanced 14% after Wachovia (WB) agreed to buy the company for $6.8 billion. In another deal, Ceridian (CEN) said late Wednesday it will be bought out by investment firm Thomas H. Lee Partners LP and insurance provider Fidelity National Financial for $5.3 B. Morgan Stanley (MS) announced that it bought Australia''s Investa Property Group for $3.9 B.

Metals miners and networking stocks also moved to the upside, while oil services, biotechnology and internet shares declined. Yahoo (YHOO) limited the downward trend for internet stocks by posting a gain of 1% on broker upgrade. Retail stocks traded mixed, with Sears Holding (SHLD) falling 2%, while Costco (COST) and Tiffany Co. (TIF) moved slightly up.

In late morning trading, the Dow Jones industrial average gained 8.13, or 0.06%, to 13,641.21, after reaching a new trading high of 13,673.07. The Standard & Poor''s 500 index advanced 0.64, or 0.04%, to 1,530.87, after soaring to a record close Wednesday for the first time since March 2000. The tech-heavy Nasdaq composite index added 7.92, or 0.31%, rising to 2,600.51. Bonds fell on the strong manufacturing data. The yield on the benchmark 10-year Treasury note rose to 4.91% from 4.87% late Wednesday.

Construction spending in April came in line with estimates.
Thursday morning, the Department of Commerce released its report on construction spending in the month of April, showing that spending growth came in line with economist estimates following an upwardly revised reading for the previous month. The report showed that construction spending edged up 0.1 percent in April following an upwardly revised 0.6 percent increase in the previous month. Economists had expected spending to increase 0.1 percent compared to the 0.2 percent increase originally reported for March.

The modest increase in construction sending came as an increase in spending on public construction more than offset a decrease in spending on private construction. The report showed that public construction spending rose 0.7 percent in April, as spending on educational construction rose 0.7 percent and spending on highway construction rose 0.3 percent. At the same time, spending on private construction edged down 0.1 percent in April. The decrease came as a 1.0 percent drop in spending on residential construction more than offset a 1.5 percent increase in spending on non-residential construction.

Initial jobless claims unexpectedly declined.
The Department of Labor released its report on initial jobless claims in the week ended May 26 on Thursday, showing that jobless claims unexpectedly fell compared to an upwardly revised reading for the previous week. The report showed that jobless claims fell to 310,000 from the previous week''s revised figure of 314,000. Economists had been expecting jobless claims to rise to 315,000 compared to the 311,000 originally reported for the week ended May 19.

At the same time, the Labor Department also said that the less volatile four-week moving average rose to 304,500 from the previous week''s revised average of 303,500. Additionally, the report showed that continuing claims in the week ended May 19 fell to 2.472 million from the preceding week''s revised level of 2.524 million. The unexpected drop in weekly jobless claims may generate some optimism about the May employment report that is due to be released on Friday. The report is expected to show that non-farm payrolls increased by about 135,000 in May.


9:45AM U.S. stocks opened higher, helped by merger-and-acquisition news.

Wall Street opened in the positive on Thursday, as a multibillion-dollar takeover deal in the brokerage sector helped offset lower-than-expected economic growth. First-quarter growth was revised down to 0.6% from an initial estimate of 1.3%. The market welcomed news that Wachovia (WB) agreed to buy brokerage A.G. Edwards (AGE) for $6.8 billion. Shares of A.G. Edwards surged 14% in early trading. In other merger deals, Morgan Stanley (MS) rose 0.8% on news that it bought Australia''s Investa Property Group for $3.9 billion.

Among other companies in focus, Motorola (MOT) lost 1.2% after the mobile phone maker announced a decision to cut 4,000 jobs, due to slower mobile phone sales. Online portal Yahoo (YHOO) gained 1%, following an upgrade to overweight from neutral at J.P. Morgan. The biggest advancers on the Dow included United Technologies (UTX), up 1.4% and DuPont (DD), rising nearly 1%.

In earnings-related news, Costco (COST) added 0.6% after the retailer reported a 5% drop in net profit that was in line with analyst expectations. In the first hour of trading, the Dow Jones industrial average rose 13.98, or 0.10%, to 13,647.06. The Standard & Poor''s 500 index was up 2.32, or 0.15%, at 1,532.55, and the Nasdaq composite index was up 8.08, or 0.31%, at 2,600.67.