[R]9:45AM U.S. markets opened higher on hopes of interest rate cuts.[/R]
Wall Street opened in the positive on Friday, boosted by upbeat news on wholesale inflation and weak retail sales. Rate-sensitive financial services stocks were among the leading gainers. Goldman Sachs Group (GS: chart) added 1.4%, while and Merrill Lynch (MER: chart) rose 1.7%. Significant gains were also posted by energy stocks, benefiting from rising oil futures. Shares of Exxon Mobil (XOM: chart) were the top-weighted gainer on the S&P, rising 1.6%. Rival ConocoPhillips (COP: chart) added nearly 2%, Tesoro Corp. (TSO: chart) gained 2.5%, and Valero energy (VLO: chart) rose 2.03%.

The Dow was pushed higher by Honeywell International (HON: chart), up 1.4%, AT&T (T: chart), up 1.2%, and DuPont (DD: chart), up 1%. Amgen (AMGN: chart) weighed on the Nasdaq after it dropped 4.1% following downgrades by both J.P. Morgan and Citigroup on the back of a decision from the FDA. Tech stocks were supported by 2.4% rise for chip equipment maker Applied Materials (AMAT: chart) which was upgraded by UBS.

In corporate news, Chicago Mercantile Exchange Holdings (CME: chart) rallied 4.5% after it lifted its takeover bid for CBOT Holdings (BOT: chart), sending its shares up 1.5%. The Dow Jones industrial average was up 44.86 points, or 0.34%, at 13,259.99. The S&P''s 500 was up 5.23 points, or 0.35%, at 1,496.70. The Nasdaq Composite Index was up 6.61 points, or 0.26%, at 2,540.35.


[R]9:30AM FTSE 100 recovers on Friday afternoon from initial losses.[/R]

The UK market is trading higher on Friday afternoon. By early afternoon, the FTSE 100 was was up 7.6 points at 6,531.7.

Advancers

Standard Chartered, the bank focused on Asia, led the advancers in large-cap stocks, up 4.2 per cent amid bid talk. Northern Rock gained 4.3 per cent as the mortgage bank was buoyed by positive comments from Cazenove.

The main talking point, though, was Rio Tinto, which advanced 3.8 per cent as bid speculation would not die down. Other mining stocks also advanced in sympathy. Antofagasta rose 2.3 per cent.

Among mid-caps, chemical firm Elementis, up 10.1%, announced it is to sell its global pigments business to Rockwood Specialties for $140 million in cash. It expects to post a pre-tax gain of 20 million pounds from the sale of the business, which makes synthetic iron oxides.

Lehman Brothers is helping Standard Chartered, 4.5% higher, with a rise in its price target and an overweight stance.

Decliners

Property stocks lost ground as some of the bid speculation that had pushed the sector higher in the previous session faded. Hammerson, linked to a possible bid from KKR, fell 1 per cent.

Friends Provident also retreated 1 per cent despite reports that Axa of France and JC Flowers of the US were mulling a bid for the life assurer.

In the mid-caps, Autonomy lost 3.4 per cent as UBS stated it was seeking to place up to 9.5 million shares in the search technology group.


[R]9:00AM U.S. stock futures traded advanced on core inflation and retail data.[/R]
U.S. stock market futures were pushed higher on Friday by hopes for interest rate cuts, raised by flat core producer prices and lower retail sales. The Labor Department said that higher energy prices lifted wholesale prices by 0.7% in April, but core inflation was tame again. U.S. retail sales had their worst performance in 7 months, falling a worse-than-expected 0.2% in April. Market also digested the latest assessment from ex-Fed Reserve Chairman Alan Greenspan who reportedly said that the odds are two-to-one against a U.S. recession, buoyed by improving prospects around the world.

Among pre-market highlights, American International Group (AIG: chart) posted a 29% profit increase, as its property and casualty insurance business avoided big losses and after it maintained premium growth. Nvidia (NVDA: chart) rose 4.6% in pre-open trade on better-than-expected 44% profit rise on 24% revenue growth. Alcatel-Lucent (ALU: chart) rose nearly 3% after it posted Q1 profit decline and forecast higher Q2 sales. Credit Suisse upgraded the stock to outperform from neutral.

Of companies drivren by analyst comments, Amgen (AMGN: chart) dropped 2.8% following two downgrades. J.P. Morgan cut its rating on the stock to neutral from overweight. Citigroup downgraded Amgen to sell from hold. S&P 500 futures rose 3.7 points at 1,502.70 and Nasdaq 100 futures climbed 4.5 points at 1,891.00. Dow industrial futures rose 35 points.

[R]PPI rose 0.7% in April. Core inflation remained flat.[/R]
Friday morning, the Department of Labor released its closely watched report on wholesale prices in the month of April. The report showed that prices rose a little more than economists had expected, although core prices were unchanged. The Labor Department said that its producer price index rose 0.7 percent in April following a 1.0 percent increase in the previous month. The increase came in slightly above economist estimates of a 0.6 percent increase. The bigger than expected increase in prices was largely due to another significant increase in energy prices, which rose 3.4 percent in April after rising more than 3 percent in each of the two previous months.