MasterCard (MA: chart) soared $20.01 to $177.15.

[R]10:00AM New York – U.S. stocks edged higher in the early trading on higher than expected economic growth data. MasterCard earnings and stock soar.[/R]

U.S. market averages advanced on higher than expected economic growth report from the Commerce Department. Dow Jones Industrial Average jumped 45 to 13,836, Nasdaq added 11 to 2,828, and S&P 500 increased 15 to 1,539.

The Commerce Department reported third quarter economic growth at 3.9%, higher than what most economists had expected. Of the fifteen economists surveyed by 123jump.com, the range of the forecast for the growth was between 2.7% and 3.3%.

The Labor Department reported that third quarter employment cost index rose 0.8%, a decline from the increase of 0.9% in the second quarter.

Separately the Bank of Japan left the interest rates unchanged at 0.5% and lowered the outlook for the economic growth to 1.8% from 2.1% on worries related to housing investment.

The Federal Reserve Bank is expected to announce its interest rate target at 2:15 PM this afternoon. Economists are divided on the rates direction. While a vocal majority of the economists working on the Wall street are clamoring for a rate reduction between 25 and 50 basis points but a silent group of economists working for industrial organizations prefer the Fed not to lower the rate. The Fed is viewed as pandering to the Wall Street interests after delivering a rate cut of 50 basis points in the last meeting on the September 18th.

Worries of yet another rate cut has taken dollar to a record low against euro and contributed to the rise in precious metals and oil prices. Dollar dropped to a record low to $1.4444 against euro ahead of the rate decision. Oil traded above $91.

In the earnings news Kraft, Visteon, and Master Card dominated the news.

Kraft reported third quarter income decline of 20% to $596 million or 38 cents per share compared to $748 million or 45 cents per share compared to a year ago. Revenue in the quarter increased 10% to $9.05 billion. Kraft stock (KFT: chart) rose 77 cents to $33.37.

MasterCard third net income increased 63% to $314 million or $2.31 per share from $193 million or $1.42 per share. After deducting one-time gain of partial stake in Redecard in Brazil, earnings increased to $1.80 per share. MasterCard said that it will increase its share buyback plan to $1.25 billion from $500 million. The number of transaction processed increased by 13% to $577 billion. MasterCard (MA: chart) soared $20.01 to $177.15.

[R]6:00AM New York, 7:00PM Tokyo – The BoJ left interest rates unchanged and revised lower the forecast for the economic growth in 2007 and 2008.[/R]

Japan’s stock index reversed a 0.6% drop in the morning session to close up 0.52%, spurred by Sapporo Holdings and automakers.

In Tokyo trading Nikkei 225 rose 0.52% or 86.82 to 16,737.63.

On the first section of the Tokyo Stock Exchange 9.0 billion shares worth 1.2 trillion yen changed hands and on the second section 401 million shares valued at 6.4 billion were traded.

Of the Nikkei 225 stocks 145 gained, 75 declined and 5 traded unchanged. Sapporo Holdings led gainers in the index stocks, rising 13.07% after announcing yesterday a tie-up with Morgan Stanley Japan Securities Company. Morgan will pay 50 billion yen for a 15% stake in the company’s property arm, Yebisu Garden Place Company.

Bank of Japan announced today in a statement published on its website that it had elected to hold the key interest at 0.5% by an 8-1vote. Again, Atsushi Mizuno was the lone dissenter for the fifth consecutive time.

The bank also said in its semi-annual outlook report for economic activity and prices that the Japanese economy will continue on a sustained path of economic expansion in the second half of fiscal 2007 through to fiscal 2008. GDP is expected to grow 2% on average, supported by strength in exports to overseas markets, expectations of strong corporate profits that are expected to feed into the household sector, tighter labor markets and accommodative financial conditions.

According to the key outlook report, the consumer price index is expected to rise at 0.4% for the fiscal year 2009 beginning in April 2008. The outlook for inflation was revised lower from 0.5% in April of 2007.

The Outlook for Economic Activity and Prices statement further added that “The rate of real GDP growth in fiscal 2007 and fiscal 2008 is likely to register around 2% on average, somewhat higher than the potential growth rate. The growth rate will be somewhat lower in fiscal 2007 and somewhat higher in fiscal 2008 due to a swing in housing investment.”