11:30AM U.S. market averages traded mixed. Caterpillar boosted the Dow.
U.S. stocks kept showing a mixed performance, with investors cautious on Fed Reserve Chairman's second day of testimony to Congress and digesting mixed economic data. Caterpillar (CAT: chart) supported the Dow, rising 2% after its board announced a $7.5 billion stock repurchase plan. Qualcom (QCOM: chart) gave the tech sector a boost with a 2.6% gain on brokerage upgrade to buy from neutral. Among disk drive stocks, shares of Network Appliance (NTAP: chart) rose 3.9% on stronger-than-expected Q3 earnings. Semiconductor, airline, and brokerage stocks also moved to the upside, while oil service stocks showed considerable weakness amid lower oil price.

Some healthcare provider stocks posted significant strength in morning trading, with LabCorp (LH: chart) rising 7% after on better-than-expected Q4 earnings growth and full-year earnings forecast. Shares of Sunrise Senior Living (SRZ: chart) moved 4.4% higher after Health Care Property (HCP: chart) offered to acquire the senior living services provider for $1.2 billion, outbidding a rival Ventas (VTR: chart). Health insurance stocks also moved to the upside, with Amerigroup (AGP: chart) helping to lead the sector higher. Shares of Amerigroup are currently up 8% after the company reported strong Q44 earnings growth and raised its full year 2007 earnings outlook.

In late morning trading, the Dow was up 6.49, or 0.05%, at 12,748.35, after reaching a new trading high of 12,768.69. The Standard & Poor's 500 index was down 0.72, or 0.05%, at 1,454.58, while the Nasdaq composite index was up 2.49, or 0.10%, at 2,490.87. Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.70% from 4.74% late Wednesday on news that the output at U.S. factories, mines and utilities was down 0.5% in January, and that the number of newly laid off workers jumped last week to the highest level since late November.

Industrial production surprisingly dropped in January.
The Federal Reserve released its report on industrial production and capacity utilization in the month of January on Thursday, showing that industrial production unexpectedly fell compared to the previous month. The report showed that industrial production fell 0.5 percent in January following an upwardly revised 0.5 percent increase in December. Economists had expected production to come in unchanged compared to the 0.4 percent increase originally reported for the previous month. The drop in industrial production was partly due to a decline in output from the manufacturing sector, which fell 0.7 percent in January after rising 0.8 percent in December.

The Fed said that about half of the decrease was a result of a 6 percent drop in motor vehicles and parts output. While the output of mines fell 1.2 percent in January after rising 1.4 percent in December, the output of utilities rose 2.3 percent after falling 2.7 percent. The rebound in utilities' output came as temperatures moved back toward seasonal norms. The report also showed that the capacity utilization rate fell to 81.2 percent in January from 81.8 percent in December. Economists had been expecting a more modest decrease to about 81.7 percent. The decrease reflected lower capacity utilization in the manufacturing and mining industries, although capacity utilization in the utilities industry increased after falling in the previous month.


9:45AM U.S. stocks opened mixed. Guess jumped 11% on earnings news.
Wall Street opened mixed on Thursday, reflecting mixed earnings news, a report about bad loans in the financial sector, and better-than-expected economic data. Caterpillar (CAT: chart) supported the Dow with a 2.6% advance on the back of $7.5 B repurchase plan. Retail shares slipped with Staples (SPLS: chart) and Bed Bath & Beyond (BBBY: chart) among the top decliners, each falling 1%. However, Guess Inc. (GES: chart) jumped 11% after the company posted a better-than-expected profit, announced a two-for-one stock split and set a quarterly dividend.

Financial stocks moved lower on a report that many firms are trying to speed up efforts to unload bad U.S. housing loans. Major firms like Merrill Lynch & Co. (MER: chart), J.P. Morgan Chase & Co. (JPM: chart), and HSBC Holdings Plc (HBC: chart) were mentioned in the report. A decline in the energy markets and lower-than-expected earnings from oil services provider Baker Hughes pressured oil company stocks. Baker Hughes (BHI: chart) fell nearly 8%. Qualcomm Inc. (QCOM: chart) rose 2.5% after an analyst upgrade, but it failed to lift tech stocks as Internet phone company Vonage Holdings Corp. (VG: chart) dropped 5.7% after it posted a Q4 loss.

Among other early market movers, Brilliance China Automotive Holdings Limited (CBA: chart) climbed 12% in early trading. Terex Corp. (TEX: chart), which makes construction and industrial equipment, said its Q4 profit nearly tripled to 97 cents per share, compared with 34 cents per share a year ago on higher sales. The stock jumped 9%. FTI Consulting (FCN: chart) surged 13.3% on record Q4 profit. Laboratory Corp. of America Holdings (LH: chart) rose 7% on 17% profit increase. In the first hour of trading, the Dow rose 5.44, or 0.04%, to 12,747.30. The Standard & Poor''s 500 index was down 1.39, or 0.10%, at 1,453.91, while the Nasdaq composite index fell 1.34, or 0.055, at 2,487.04. Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.70% from 4.74% late Wednesday.


9:30AM NY-2:30PM London FTSE slips on Wolseley, mining stocks.
The UK market declined in early afternoon on Thursday. At 2:30 PM GMT, the FTSE 100 was down 0.11% at 6,414.

Advancers

Shares in Reed Elsevier, the Anglo-Dutch publishing company, gained 5% after it posted a 7% increase in adjusted earnings per share and announced plans to sell its Harcourt US educational operations. Another stronger advancer was Diageo surging 4.5% as the brewer of Guinness and Smirnoff vodka boosted full-year profit forecast as it released interim results marching expectations. The company also announced its sales of premium whiskies in the US were robust, helping its spirits operations increase net sales by 8%. Among the mid-caps, car dealer, Pendragon, gained 4% after the company reported a 51% increase in annual profit before tax. BAE Systems found a firm footing and advanced 2.4% after Credit Suisse held its outperform advice and Merrill Lynch kept its buy recommendation and lifted its price target.

Decliners

Wolseley led the decliners, falling 3.1% after reports of bid interest in the plumbing and heating goods supplier died away. Traders said that the rumours triggered a wave of short-covering in the stock. Engineering company Tomkins declined 2.2% after it reported a 7% decline in full-year pre-tax profit of 244.8 million pounds. It also added that the outlook for its markets remained difficult. Miners dipped as investors took to profit-booking following the recent rally in the sector. Antofagasta decreased 0.9%, and Rio Tinto, off 0.4%, are among the worst performers. Dream Direct gave a warning this morning that quarterly sales tumbled 21%, with restructuring costs expected to tip the home shopping retailer deep into the red for the full year. Shares plummeted 33%.


9:00 AM Market futures pointed higher, boosted by economic data.
U.S. stock futures advanced on Thursday, bolstered by bigger-than-expected rise in manufacturing activity in the New York area in February and a larger drop in January import prices. The U.S. Labor Department said that prices for imported goods fell 1.2%, vs. expectations of a 1.1% drop. It was also reported that initial jobless claims rose 44,000 during the week ending Feb. 10 to 357,000, the highest level seen since late November. Among pre-market highlights, JetBlue Airways (JBLU: chart) rallied 3.1% in pre-open trading after Goldman Sachs upgraded the air carrier to buy from neutral. Goldman also downgraded AMR Corp. (AMR: chart) to neutral from buy, citing valuation concerns. The stock fell 1.5% in the pre-open.

Oil services company Baker Hughes Inc. (BHI: chart) dropped 4.4% after reporting a slower-than-forecast rise in Q4 net income. Biogen Idec shares (BIIB: chart), biotechnology company, reported earnings increase but missed expectations. The company earned 32 cents per share, up from a profit of 16 cents per share a year earlier. The stock lost 1.2%. In other corporate news, candy maker Hershey Co. (HSY: chart) said it is going to cut 1,500 jobs over three years as part of a plan to scale back production lines and move some manufacturing to Mexico. S&P 500 futures inched 0.40 of a point higher to 1,459.00 and Nasdaq 100 futures slipped 0.25 of a point to 1,822.50. Dow industrial futures tacked on 15 points to 12,780.

Import and export prices declined in January.
The Department of Labor released its report on import and export prices in the month of January on Thursday. While the report showed a notable decrease in import prices, it also showed a modest increase in export prices. The report showed that import prices fell 1.2 percent in January after a revised 1.1 percent increase in December. The decrease was largely due to a steep decline in prices for petroleum imports. Petroleum import prices fell 7.3 percent in January following a 4.6 percent increase in the previous month. Excluding petroleum imports, import prices came in unchanged after rising 0.5 percent in December. At the same time, the report also showed that export prices edged up 0.3 percent in January following a revised 0.7 percent increase in December. Higher prices for agricultural exports contributed to the increase in export prices. The Labor Department said that agricultural export prices rose 0.7 percent in January after rising 2.4 percent in the previous month. Nonetheless, export prices still rose 0.3 percent excluding agricultural exports.