Crude oil inventories declined.
Government data released Wednesday showed that crude oil inventories edged lower in the most recent week, halting a recent streak of gains. Meanwhile, gasoline inventories continued to rise, and distillate stockpiles recorded another slide. The Department of Energy's Energy Information Administration said that crude oil inventories slipped 400,000 barrels in the week ended February 2. Specifically, the measure dipped to 324.5 million barrels from the previous week's level of 324.9 million barrels. This followed a recent streak of gains, including an increase of 2.7 million barrels in the previous week. Meanwhile, gasoline inventories showed a week-over-week increase of 2.6 million barrels. The extended recent gains, including a rise of 3.8 million barrels in the previous week. The level of gasoline inventories was 2.2% above last year. Meanwhile, distillate fuel oil had an inventory decline during the week ended February 2. Stockpiles of these products, which include heating oil, slipped by 3.7 million barrels. This added to a decline of 2.6 million barrels recorded in the previous week.


9:45AM Market opened higher, lifted by tech rally.
U.S. stocks opened higher on Wednesday, benefiting from strength in the technology sector largely contributed by 3.5% gain for Cisco Systems (CSCO: chart) on the back of strong earnings and a higher sales forecast. Amazon.com (AMZN: chart) also helped, rising 1% after it announced it is partnering with TiVo (TIVO: chart) to offer movies and TV shows. TiVo shares gained 5%. Infineon Technologies (IFX: chart) rose 8% after the German chip maker received a contract to supply chips for Nokia. The Dow Jones Industrial average was supported by 1.1% rise for Caterpillar Inc (CAT: chart) and 0.6% rise by the shares of IBM (IBM: chart).

In earnings-related news, Whirlpool (WHR: chart) fell 2.5% after the appliance maker reported a 14% profit decline on discontinued operations. Net income dropped to $1.37 per share, compared with $1.83 per share last year, missing estimates. Restaurant chain Cheesecake Factory Inc. (CAKE: chart) shares traded down 2.5%, due to al 9% profit drop in Q4 because of compensation charges and higher operating costs. Net income slipped to 26 cents per share from 28 cents per share in the prior year period. Cigna Corp. (CI: chart) stock rose nearly 1% after the company's adjusted earnings per share beat expectations.

News Corp (NWS: chart) rose 1.7% after the media company reported Q2 net income decline. FEI Co (FEIC: chart) jumped above 16% after the maker of special microscopes to analyze semiconductors swung to a Q4 profit on higher sales, beating estimates. Among other early movers, New Oriental Education & Technology Group (EDU: chart) climbed 8%. In the first hour of trading, the Dow Jones industrial average rose 5.61, or 0.04%, to 12,671.92. The Standard & Poor's 500 index was up 1.45, or 0.10%, at 1,449.45, and the Nasdaq composite index rose 8.17, or 0.33%, to 2,479.66.

Fourth-quarter productivity grew at a faster pace.
Wednesday morning, the Department of Labor released its preliminary report on labor productivity in the fourth quarter, showing that productivity grew at a faster pace than economists had been expecting. The report showed that productivity grew 3.0 percent in the fourth quarter compared to a revised 0.1 percent decline in the third quarter. Economists had expected 2.0 percent productivity growth compared to the 0.2 percent growth originally reported for the previous quarter. The strong productivity growth came as an increase in output outpaced an increase in hours by a large margin. The report showed that output grew 4.2 percent, while hours edged up by a much more modest 1.2 percent. For the third quarter, output growth was revised down to 1.9 percent from 2.3 percent, while the increase in hours was revised to 2.0 percent compared to the 2.1 percent growth originally reported.

The report also showed that unit labor costs rose by 1.7 percent in the fourth quarter compared to an upwardly revised 3.2 percent increase in the third quarter. Unit labor cost growth in the third quarter was originally reported at 2.3 percent. The Labor Department also said that labor productivity for all of 2006 rose 2.1 percent following a 2.3 percent increase in 2005. The productivity growth represented the slowest pace of growth since a 1.6 percent increase in 1997. Additionally, unit labor costs for the year rose 3.2 percent compared to a 2 percent increase in 2005, marking the fastest pace of unit labor cost growth since a 4.2 percent increase in 2000.


9:30AM NY-2:30PM London FSTE inches higher at mid-day Wednesday.
The UK market was slightly higher at mid-day trading on Wednesday. The FSTE 100 in London was barely 0.15% higher at 6,356.

Advancers

BHP surged 4.4% after it posted a large rise in profits and an extra $10 billion cash return to shareholders. Chief executive Chip Goodyear also announced he would retire by the end of the calendar year 2007. Anglo American and Vedanta were also higher, boosted by higher metal prices. Anglo American advanced 1.2%, while Vedanta was 2.4% higher. Another strong performer was British Airways, up 3.2%, on the back of a positive comment from Merrill Lynch. The broker raised the airline to buy from neutral. British American Tobacco also moved 1.1% higher as SG Securities raised the stock to buy and lifted the estimates on the shares.

Decliners

The pharmaceutical sector was in negative territory especially companies trading without rights to the latest dividend payout like AstraZeneca, down 1.8%, and Compass Group which was lower by 1.7%. GlaxoSmithKline declined 0.6% ahead of Q4 figures tomorrow. Although Q1 revenue of airline easyJet is up 15% from last year with the January load factor up 0.7% to 74.9% and passenger numbers in January rising 11.1%, the airline dipped 2.4%. Children’s entertainment company DIC Entertainment said that annual earnings will miss market expectations as TV advertising sales decline. The company plummeted 19.5%.


9:00AM Market futures gained on Cisco earnings and strong productivity data.
U.S. stock futures advanced on Wednesday on the back of a better-than-expected quarterly profit and outlook from Cisco Systems which boosted investor confidence in the strength of corporate profits. The release of strong fourth-quarter productivity and tame wage inflation data also helped generate positive sentiment. The Department of Labor said that Q4 labor productivity grew at a faster pace than previously expected. The report showed that productivity grew 3% compared to a revised 0.1 % decline in Q3, exceeding expectations of 2% productivity growth.

Nasdaq futures were pushed higher by 5% advance in the shares of network equipment maker Cisco Systems Inc. (CSCO: chart) which posted a 40% profit jump and strong guidance. The company said net income for the Q2 rose to $1.92 billion, or 31 cents a share, up from $1.38 billion, or 22 cents a year earlier. The quarterly results were boosted by Cisco's acquisition of Scientific-Atlanta and strong demand for Internet equipment among telecom companies and small businesses. Again on the earnings news front, financial services firm Moody's Corp. (MCO: chart) posted a better-than-expected quarterly profit and shares of health insurer Cigna Corp. (CI: chart) said quarterly profit rose 10%. In other corporate news, Ford Motor (F: chart) advanced as the automaker said about 8,000 U.S. hourly workers left the company in January after taking buyout offers. S&P 500 futures were advanced 2.00 points to 1,455.30 and futures on the tech-heavy Nasdaq 100 rose 8.50 points to 1,812.00. Dow industrial futures gained 16 points to 12,713.


8:30AM NY-7:30PM Mumbai Sensex strikes all-time high, Bajaj Auto surges.
The Sensex on BSE finished 164.94 points, or 1.1%, higher at 14,643.13. The market-breadth was positive until mid-afternoon but then turned negative. For 1,337 shares that declined on BSE, 1,320 advanced and 51 shares were unchanged. Of the 30 stocks in the Sensex, 17 advanced, while the rest declined. The turnover on BSE was Rs 4,641 crore, lower than Rs 6,103 crore on Tuesday. On NSE, the turnover was Rs 10,333.92 crore, higher than Rs 9,840.6 crore on Tuesday.

Economic news

The government announced on Wednesday that it expected the economy to grow 9.2% in the fiscal year ending March 2007, topping the forecast of the Reserve Bank of India of 8.5% to 9%. The central statistics office also announced that manufacturing output growth was viewed at 11.3%, higher than 9.1% a year ago. The Indian government also said that it expects the economy of the country to experience its fastest growth in the upcoming 18 years.