[R]11:30AM Market averages turned sharply higher amid lower bond yields and weaker oil prices.[/R]

U.S. market averages moved firmly into the positive territory after the initial lackluster trading fashion. Rate-sensitive utilities stocks stood out among the market's best performances amid a decrease in treasury yields. Significant strength also emerged among transportation stocks, benefiting from a steep decline by the price of oil. Crude for August delivery dropped $1.15 to $67.99 a barrel. Tobacco, pharmaceutical, and banking stocks also posted gains. At the same time, resource stocks showed weakness, due to lower commodities prices.

The Dow Jones industrial average rose more than 100 points, with General Motors (GM: chart) contributing to the strong upward move. The auto giant rose 2.3% after Goldman Sachs upgraded its rating on the company's stock. Other notable gainers on the Dow included McDonald's (MCD: chart), rising 2.4%, Altria Gfroup (MO: chart), up 1.6%, as well as Honeywell (HON: chart) and 3M Co.(MMM: chart), both rising 1%.

In earnings-related news, Walgreen (WAG: chart) slipped 0.7% although the drugstore operator reported Q3 profit increase by 20%, helped by sales growth at established stores and an increase in prescription sales. In late morning trading, the Dow rose 107.79, or 0.81%, to 13,468.05. The Standard & Poor's 500 index rose 9.96, or 0.66%, to 1,512.52, and the Nasdaq composite index rose 14.03, or 0.54%, to 2,602.99. The 10-year Treasury note's yield fell to 5.10% from 5.14% late Friday.


[R]Existing home sales fell 0.3% in May.[/R]
Monday morning, the National Association of Realtors released its report on existing home sales in the month of May, showing that existing home sales for the month came roughly in line with economist estimates. The report showed that existing home sales edged down 0.3 percent to an annual rate of 5.99 million units in May from an upwardly revised pace of 6.01 million in April. Economists had expected sales to come in at about 6.0 million. NAR also said that the national median existing-home price was $223,700 in May, 2.1 percent below May of 2006 when the median price was $228,500. The report also showed that total housing inventories rose 5.0 percent to 4.43 million existing homes available for sale by the end of May. This represents an 8.9-month supply at the current sales pace compared to an 8.4-month supply in April.


[R]9:45AM Wall Street opened above the flat line as bond yields declined amid 4-year low existing home sales.[/R]

U.S. stock markets opened above the flat line, as bond yields declined amid data showing that sales of existing homes hit a 4-year low in May, while the median home price fell for a record 10th month in a row.

The National Association of Realtors said that sales of existing single-family homes and condominiums dropped by 0.3 % to 5.99 million units in May, the slowest sales pace since June of 2003. The median home price fell 2.1% to $223,700 from a year ago. The data added to investor optimism that the Fed Reserve will leave interest rates unchanged.

A broker upgrade of General Motors also generated positive sentiment. Goldman Sachs raised its rating on the stock to buy from neutral, saying there was little downside for the company''s stock. GM (GM: chart) shares jumped 3%.

On the earnings news front, Walgreen (WAG: chart) rose 1% after reporting a better-than-expected 20% profit rise in Q3, lifted by a growing market share in its top products and an increase in prescription sales. The U.S. biggest drugstore chain earned $561.2 million, or 56 cents per share, up from $469.2 million, or 46 cents per share a year ago. Revenue rose 13% to $13.7 billion from $12.2 billion last year, but fell short of expectations. Analysts had been expecting a profit of 54 cents on revenue of about $13.8 billion.

In mid-morning trading, the Dow Jones industrial average rose 62.18, or 0.47%, to 13,422.44. The Standard & Poor''s 500 index rose 3.84, or 0.26%, to 1,506.40, and the Nasdaq composite index rose 4.62, or 0.18%, to 2,593.58. The 10-year Treasury note''s yield fell to 5.08% from 5.14% late Friday.


[R]9:30AM The FTSE loses ground Monday on weakness in mining stocks.[/R]

The UK market was lower by mid-day on Monday. The FTSE 100 dipped 0.4% and was at 6,540.4.

Advancers

ICI was one of the few companies on the plus side, 1.4 per cent higher supported by talk that Akzo Nobel was mulling an increase in its bid for the ICI to the 700p mark thought by some investors as the level where the deal can be done.

Housebuilders were buoyant after Persimmon came out with strong figures. The company announced it expected interim revenue to reach 1.5 billion pounds with 8,000 units sold, matching forecasts despite rising interest rates.

Decliners