2:30PM NY, U.S. Market Movers

Avalon Pharmaceuticals (AVRX: chart) shares soared 10.8% after the company said it will collaborate with Merck & Co., (MRK: chart), on a cancer treatment. Merck could pay Avalon as much as $30 million if Merck backs the drugs Avalon develops. He kept his ""Buy"" rating and $13 price target on the shares. The deal''s terms provide for Avalon to potentially receive payments of more than $200 million as well as royalties on potential future products.

Chico''s FAS (CHS: chart) rose 10.4% after the retailer posted better-than-expected fourth-quarter sales and said it is comfortable with analysts'' estimates for the current year. For the quarter, the women''s clothing seller earned $18.2 million, or 10 cents per share, including a charge of 3 cents per share. Sales totaled $446.3 million, topping Wall Street''s forecast of $442.6 million. In the year-earlier quarter, Chico''s earned $44.5 million, or 24 cents per share, on sales of $375.7 million.

Friendly Ice Cream Corp. (FRN: chart) shares climbed 15.9% after the ice cream maker and restaurant operator, said it hired Goldman Sachs as financial advisor, and Weil, Gotshal & Manges as legal advisor, to assist the board in exploring strategic options, including a possible sale of the company. The company said that while it will review a wide range of options in consultation with its advisors, there can be no assurance of any particular outcome. Friendly said it does not expect to disclose further developments regarding the process until the review of strategic alternatives has been completed.

Hypercom (HYC: chart) shares fell 10.3% after the payment technology company posted a fourth-quarter loss. The company reported a loss from continuing operations of $2.7 million, or 5 cents per share, on revenue of $64.8 million. During the year-earlier period, the company reported a loss of $3.3 million, or 6 cents per share, on revenue of $68.1 million.

Payless ShoeSource Inc. (PSS: chart) shares rose 8.8% after the shoe retailer posted better-than-expected fourth-quarter results. For the quarter the company earned $24.6 million, or 37 cents per share, on revenue of $692.7 million. The results included a one-time gain of 22 cents per share related to the release of income tax reserves. During the year-earlier period, the company recorded a loss of $5.6 million, or 8 cents per share, on revenue of $611 million.

Tercica Inc. (TRCA: chart) shares surged 23%, a day after a rival agreed to stop marketing a competing drug. Tercica and partner Genentech Inc. had sued a Glen Allen, Va.-based drug maker called Insmed Inc. Insmed makes Iplex, which treats growth disorders. Under a settlement announced late Wednesday, Insmed agreed to stop selling Iplex as a drug treating growth disorders.

Town Sports International Holdings Inc. (CLUB: chart), health club operator, said that its fourth-quarter profit rose more than fivefold, driven by growing membership revenue and ancillary club revenue. Net income climbed to $6.6 million, or 25 cents per share, from $1.2 million, or 7 cents per share, a year ago. Quarterly revenue grew 12% to $110.2 million from $98.5 million, while comparable club revenue increased 7.9%.

CV Therapeutics Inc. (CVTX: chart) shares plummeted 25.3% following mixed results from a late-stage study on its angina drug Ranexa, showing it met company’s safety goal but failed to show a benefit beyond its current indication. But the study failed to meet its primary goal, which measured the effectiveness of Ranexa as a treatment for acute coronary syndrome, or heart disease. The drug is currently approved for the second-line treatment of chronic angina, or angina in patients who have not responded to other treatments.

EFJ Inc. (EFJI: chart) shares tumbled 18.6% after the wireless communications equipment company reported a fourth-quarter net loss of $7.79 million, or 30 cents per share compared with the same quarter last year when the company posted a net profit of $15.4 million, or 59 cents per share. Revenue declined to $23.9 million versus $29.8 million in the same period a year earlier.

Jupitermedia Corp. (JUPM: chart) said it has ended talks to be bought by Getty Images Inc. ((GYI.N)), sending Jupitermedia shares plunging as much as 16.9%.Getty spokeswoman Deb Trevino declined to say why the companies ended the talks.

Plato Learning Inc. (TUTR: chart) slumped 17.5% after the provider of computer-based educational products posted disappointing first-quarter results. For the period the company posted a loss of $4.5 million, or 19 cents per share, on revenue of $17 million. During the year-earlier period, the company reported a loss of $3 million, or 14 cents per share, on revenue of $23.5 million.

Rocky Brands Inc. (RCKY: chart), footwear company, reported a fourth-quarter net loss of $77,875, or a penny a share compared with a year-ago quarter when Rocky Brands posted a net profit of $2.61 million, or 46 cents per share. Revenue declined to $70.6 million against $74.9 million in the same period a year earlier. Shares fell 17.5%.

Insmed Inc. (INSM: chart), biopharmaceutical company, said that it is laying off its sales and marketing staff and cutting back production following a lawsuit settlement. The company did not detail the terms of the settlement with Tercica Inc. and Genentech Inc. However, Tercica said Tuesday that Insmed will stop selling its Iplex to treat growth disorders. Insmed said it will lay off 34% of its work force. With 150 employees, that amounts to 51 workers. Shares fell 42.4%.

1:00PM NY European markets finished modestly higher.
European stocks finished modestly higher on Wednesday, supported by gains in the shares of truck maker Scania on merger-and-acquisition speculation. Stocks traded mostly flat on cautiousness ahead of key interest-rate decisions. Both the European Central Bank and the Bank of England announce interest-rate decisions on Thursday. Scania climbed 3.7% after Volkswagen lifted its stake in the Swedish truck maker, thus putting pressure on Scania to merge with Germany''s Man AG. Man climbed 3.1% in Frankfurt. Volkswagen shares rose 2.5%. Among other movers today, Carrefour reversed earlier gain to close down 2% after its chairman Luc Vandevelde resigned. Earlier in the day shares rallied after Groupe Arnault and Colony Capital said they bought a 9.8% stake. Other European food retailers gained, with shares in Britain''s Morrison Supermarkets, up 1.7% and shares of Germany''s Metro, up 1.1%. The German DAX 30 closed up 0.3% at 6,617.75, the French CAC 40 rose 0.3% to 5,455.07, and the U.K. FTSE 100, in which a number of companies traded without dividend rights, also added 0.3% to 6,156.50.

Crude oil prices jumped $1 on data showing an unexpected drop in crude oil inventories. Light, sweet crude April delivery rose $1.13 to $61.82. Heating oil added 2 cents to $1.7679. Natural gas fell to $7.463 per 1,000 cubic feet. London Brent jumped $1.13 to $62.52. The U.S. dollar traded down against its major currency rivals. The euro was quoted at $1.3147, up from $1.3121. The dollar bought 116.48 yen, down from 116.67. The British pound was quoted at $1.9307, up from $1.9292. European gold prices rose. In London gold traded at $647.50 per troy ounce, up from $641.60. In Zurich, the precious metal traded at $648.60, up from $642.30. Silver rose to $12.94, up from $12.72.

11:30AM Stock averages traded lower. Rising oil weighed on the Dow.
U.S. stock markets traded in a tight range Wednesday. The Dow erased earlier gains to join the Nasdaq and S&P 500 in the negative territory. The blue-chip average decline followed a notable increase by the oil price. Crude oil rose 91 cents to $61.60 after weekly inventory data showed an unexpected drop in oil supplies last week. Shares of major energy companies advanced, including Exxon Mobil, up nearly 1%. The oil and gas producer said it is planning to start up more than 20 new projects in the next three years. Among other oil majors, Valero (VLO: chart) advanced 2.5% and ConocoPhillips (COP: chart) advanced 1.9%. Other notable gainers in the oil service sector included Weatherford (WFT: chart), up 2.8% and Global Industries (GLBL: chart), rising 3.6%. In the housing sector, Toll Brothers (TOL: chart) moved 1.1% higher.

Financial services stocks were leading losers on the S&P 500 index, with shares of Bank of America (BAC: chart) falling 0.9%. Weakness was also visible in the biotechnology sector. Drug company CV Therapeutics Inc. (CVTX: chart) weighed heavily on the Nasdaq with a decline of 25% as its angina drug ranolazine did not meet the primary efficacy endpoint in a late stage study. In late morning trading, the Dow Jones industrial average fell 20.75, 0.17%. The Standard & Poor''s 500 index fell 4.27, or 0.31%, to 1,391.14, and the Nasdaq composite index rose 11.72, or 0.49%, to 2,373.42. Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.51% from 4.53% from late Tuesday.


9:45AM U.S. stock markets opened little changed, looking for direction.
U.S. stock markets opened little changed Wednesday, looking for direction after heavy recent losses and the partial recovery in the previous session''s rally. Investors were also cautious ahead of the release of February employment report on Friday. On the one hand, the Dow was weighed by AT&T (T: chart) and American Express (AXP: chart), each falling over 1%, but on the other hand, it was supported by gains for industrial shares, including Coca-Cola (KO: chart), Boeing (BA: chart) and Caterpillar (CAT: chart), each rising 1.2%. Clothing retailer American Eagle Outfitters (AEOS: chart) fell 3.7% after the company''s Q4 report failed to impress investors. BJ''s Wholesale Club (BJ: chart) rose 2% after the retailer posted Q4 earnings drop of 77% to 18 cents a share, down from 76 cents a year ago hurt by special items.