In late morning trading, the Dow Jones industrial average fell 62.25, or 0.46%, to 13,403.42. The Standard & Poor''''s 500 index fell 10.74, or 0.71%, to 1,506.64, and the Nasdaq composite index fell 15.57, or 0.60%, to 2,571.61. Bonds fell sharply, with the yield on the benchmark 10-year Treasury note jumping to 5.08% from 4.97% late Wednesday.

[R]Wholesale trade rose 0.3% in April.[/R]
Thursday morning, the Department of Commerce released its report on wholesale trade in the month of April, showing that wholesale inventories rose in line with estimates while wholesale sales showed a more notable increase. The report showed that wholesale inventories rose 0.3 percent in April following an upwardly revised 0.4 percent increase in March. Economists had been expecting inventories to increase by 0.3 percent compared to the 0.3 percent increase originally reported for the previous month.

The modest increase in inventories came as a 0.5 percent decrease in wholesale inventories of durable goods partly offset a 1.6 percent increase in wholesale inventories of non-durable goods. The Commerce Department also said that wholesale sales rose 1.3 percent in April after rising 2.1 percent in the previous month. Wholesale sales of durable goods rose 0.8 percent, while wholesale sales of non-durable goods rose 1.8 percent. With wholesale sales growth outpacing wholesale inventories growth, the inventories/sales ratio edged down to 1.12 in April from 1.13 in March.


[R]9:45AM U.S. stocks opened in the negative on rate concerns.[/R]

U.S. stock market opened lower on Thursday, reflecting rising yields in the bond market and mixed retail sales reports. The 10-year Treasury note''''s yield jumped over 5% in overnight trading, raising concerns that a rate cut later in the year is less probable. Mixed retail sales in May indicated that consumer spending was uncertain.

Retailers released reports on sale-store sales in May, showing a slight improvement compared to April’s generally weak sales. Wal-Mart (WMT: chart) lost 0.9% after it said its same-store sales came in slightly below estimates because of weakness in its apparel and home merchandise. J.C. Penney (JCP: chart) was a notable decliner, falling 4%, Macy''''s (M: chart) slipped 2%, and Abercrombie & Fitch (ANF: chart) lost 0.6% after reporting sales below estimate.

Costco Wholesale (COST: chart), Limited Brands (LTD: chart), and Jos. A. Bank Clothiers (JOBS: chart) moved higher on better-than-expected same-store sales. However, Nordstrom (JWN: chart) dropped 1.7% despite robust results. Saks Inc. (SKS: chart) jumped 5.1% after the luxury retailer posted stronger-than-expected sales.

In deal news, a group of investors including Blackstone Group launched an improved offer for Biomet (BMET: chart), lifting it to $11.4 billion, or $46 a share. In morning trading, the Dow Jones industrial average fell 12.92, or 0.10%to 13,452.75 a day after falling nearly 130 points. The Standard & Poor''''s 500 index fell 3.76, or 0.25%, to 1,513.62, and the Nasdaq composite index fell 4.51, or 0.17%, to 2,582.67.

Bonds fell sharply, with the yield on the benchmark 10-year Treasury note jumping to 5.04% from 4.97% late Wednesday.


[R]9:30AM London trades higher at mid-day Thursday on Bank of England’s decision on rates.[/R]

The FTSE 100 gained 17 points, or 0.26%, at 6,539.7 after it ended 110 points lower on Wednesday.

Economic news

The Bank of England left interest rates at 5.5% on Thursday, but investors believe this decision is just a pause in the tightening cycle. It is also a signal given by the bank to wait and see the effectiveness of previous rate hikes on cooling inflationary pressures.

Advancers

Vodafone led the advancers in morning trade, adding 2.6 per cent after investor ECS Assets put pressure on the telecoms company to return 38 billion pounds to its shareholders.

Intercontinental Hotels Group rose 1.4 per cent after the Barclay brothers, the largest shareholders of the hotelier, raised their stake in the company to 10%.

Halfords, the car parts retailer, climbed 6.4 per cent after the company reported quarterly results that showed that same-store sales were up 9.2% and revenues were also up 744 million pounds from 682 million pounds.

Low cost airline EasyJet posted a 13.8% increase in May passenger numbers, sending its shares up 0.7%.