U.S. MARKET AVERAGES

Stocks rebounded from recent weakness and traded in the positive Wednesday morning, helped by strong earnings from PepsiCo Inc. and Cisco Systems, as well as reports that Pfizer considers selling its consumer products business. A continued decline in oil prices also lifted sentiment.

The disk drive sector showed strength in morning trading, rising 1.2% on the day. The networking sector was the strongest sector in technology with a gain of 2.4%. The airline sector also posted strength, showing a gain of more than 2%.

Energy stocks were weak in the morning session, despite a surprising decline in crude inventories. The oil sector fell about 1.3% and the natural gas sector posted a loss of 1.1%. The housing sector came off its lows of the day, posting a modest decline.

Univision Communications (UVN: chart) reached a new high, rallying about 10% on reports that it will put itself up for sale. Fisher Scientific (FSH: chart) climbed to a fresh peak, rising 5% on strong Q4 earnings. Tellabs (TLAB: chart) built on recent gains, extending its peak.

Cyberonics (CYBX: chart) broke to a new 52-week low after reporting a wider loss in Q3. Cendant (CD: chart) added to recent losses, extending its low.

In midday trading, the Dow Jones industrial average rose 59.39, or 0.55%. The Standard & Poor's 500 index rose 5.69, or 0.45%, and the Nasdaq composite index rose 12.20, or 0.54%.

Bonds fell, with the yield on the 10-year Treasury note at 4.58%, up from 4.57% late Tuesday.

MOVERS AND SHAKERS

Lazard Ltd (LAZ: chart) reported Q4 pro forma net income of $57.3 million, or 57 cents a share, up 56% from $36.6 million, or 37 cents a share, in the year-ago period, beating estimates of 49 cents a share. Operating income rose 7% to $77.1 million. Total revenue fell to $392 million from $401 million. Operating revenue fell 2% to $388 million. The stock rose 8.2%.

Mesa Air Group Inc (MESA: chart) reported January traffic increase of 10.6% to 500 million revenue passenger miles from 452 million miles in the same period a year earlier. Load factor was 68.3% for the month. The stock gained 3.7%.

Nuance Communications (NUAN: chart) agreed to buy Dictaphone Corp. for $357 million in cash. Nuance expects the acquisition to add between $80 million and $85 million in revenue in fiscal 2006 and between $180 million and $200 million in revenue in 2007. The acquisition is also expected to dilute GAAP earnings by around 11 to 12 cents a share 2006 and by 2 to 5 cents in 2007. The company’s shares gained 1.6%.

The New York Times (NYT: chart) posted January advertising revenue rise of 3.4% to $198 million and total company revenue rise of 3.2% to $300 million. However, excluding the acquired in March 2005 About.com, advertising revenues decreased 0.3% and total company revenues increased 0.7%. The company also said it''ll start printing its National edition in Houston as part of an expansion of home delivery and retail distribution to readers in the metropolitan Houston area and southeastern Texas. The stock gained nearly 1%.

Cheesecake Factory (CAKE: chart), restaurant chain, reported Q4 net earnings rise of $23.4 million, or 29 cents a share, compared with $19.9 million, or 25 cents a share a year ago. The company posted revenue of $328.3 million vs. $266.1 million, missing analyst estimates of a revenue of $330 million. The stock fell 4.2%.

Dean Foods (DF: chart), food and beverage company, reported Q4 earnings from continuing operations of $70.7 million, or 49 cents a share, down from a profit of $85.2 million, or 55 cents a share a year ago. On an adjusted basis, excluding certain charges, the company earned 54 cents a share. Sales rose 4% in the latest three months to $2.69 billion from $2.6 billion in the same period a year ago. The average analyst estimate was for a profit of 54 cents a share on revenue of $2.64 billion. Dean Foods projected Q1 adjusted earnings of 39 to 41 cents a share and reaffirmed its outlook for earnings of $2.20 to $2.25 a share for the full year on sales of about $10.5 billion. The company’s shares lost 2.1%.

ECONOMIC NEWS

Crude oil inventories ticked down in the latest week, according to government statistics released Wednesday, giving back a fraction of the previous week''s gain. Meanwhile, stocks of gasoline recorded another sharp rise.

The Department of Energy's Energy Information Administration revealed that crude oil inventories fell by 300,000 barrels for the week ended February 3, dropping to 320.7 million barrels from the prior week''s level of 321.0 million barrels. This followed a gain of 1.9 million barrels in the previous week. Oil inventories were 10.7% higher than their levels of the same time last year.

Gasoline inventories posted a week-over-week increase of 4.3 million barrels, the government said, adding to a recent string of gains that included the previous week''s build of 4.2 million barrels. Gasoline stocks were 1.7% above their levels of last year. Inventories of distillate fuel oil ticked down by 300,000 barrels in the most recent week.

INTERNATIONAL MARKETS NEWS