9:45AM Stocks opened narrowly mixed. FedEx reported Q2 profit rise but released disappointing Q3 forecast.
U.S. stocks opened little changed on Wednesday as transportation stocks fell after FedEx financial report limited gains generated by optimism about global merger-and-acquisition activity. FedEx Corp. (FDX: chart) reported Q2 profit rise of 9% on strong results from its ground delivery business. Earnings for the quarter increased to $1.64 per share, up from $1.53 per share last year. However, the company also released a disappointing Q3 forecast, sending its shares down 2.2%. Used car dealer CarMax (KMX: chart) said its Q3 earnings nearly doubled on strong sales to the wholesale market and strong demand for trucks and sport utility vehicles.

The Nasdaq was pushed higher by Swedish telecommunications equipment maker Ericsson (ERIC: chart) which agreed to buy networking equipment vendor Redback Networks (RBAK: chart) for $2.1 billion in cash. Redback shares jumped 17.5%. Some strength emerged in the semiconductor sector, with Maxim (MXIM: chart) leading the sector higher after announcing the retirement of its CEO. The stock jumped 4.9%. Shares of U.S. metal producers advanced Arcelor Mittal (MT: chart) agreed to buy Mexico's Sicartsa for $1.44 billion. from Grupo Villacero.U.S. Steel Corp. (X: chart) stock gained 1.3% and Allegheny Technologies (ATI: chart) shares gained 0.7%. Software, disk drive, and housing stocks also posted strong gains. At the same time, transportation stocks came under pressure in early trading. In the first hour of trading Wednesday, the Dow was down 4.17, or 0.03%, at 12,467.15. The Standard & Poor's 500 index was up 0.88, or 0.06% at 1,426.43 and the Nasdaq composite index rose 7.84, or 0.32%, to 2,437.39


9:30AM The London benchmark index was higher Wednesday on Asian recovery.
The FTSE 100 advanced 26.6 points, or 0.4%, to 6,230.4.

Decliners

British Energy was in focus as its shares slumped 8.3% on reports that repair work at Hunterson and Hinkley reactors will not be completed until March.

HMV Group, the music and book retailer, also hogged the limelight after warning that full-year pretax profits would be at the low end of City expectations. HMV dipped 4.07%.

Northern Foods shed 5.2% after Credit Suisse downgraded to neutral on recent share price strength and the fact that Christmas is a crucial period for the company and four of the past five January’s have brought profits warnings.

Bodycote International, engineering company, was 4.22% lower after it warned that costs had stabilised at record high levels.

Advancers

Experian, the credit company, led the gainers, up 2.5% on a Morgan Stanley upgrade to outperform. The broker said the company was undervalued and could spend up to $3 billion on acquisitions over the next couple of years.

Soft drinks group Britvic advanced 4% as investors reponded to Tuesday after-hours conformation that Permira had increased its stake from just under 3% to 14%.

There was more gains for John Wood, the oilfield services group, as its forecasts were upgraded in the wake of the trading statement on Tuesday. The shares rose 3.9%.

Bangladeshi drug maker Beximco recouped part of its recent decline after it guided full year revenue growth of more than 10%.


9:00AM Stocks futures advanced, lifted by Ericsson acquisition deal.
U.S. U.S. stock market futures pointed higher Wednesday, boosted by tech shares gains after Ericsson agreed to acquire a network hardware company. A recovery in Asian-Pacific stock markets after a sharp decline yesterday also contributed to the advance. Thailand''s government reversed a decision on capital controls, sending its benchmark SET index up 11%.

Swedish telecommunications equipment maker Ericsson agreed to buy Redback Networks for $2.1 billion cash, an 18% premium to Tuesday''s close. In other merger-and-acquisition news, Harrah''s Entertainment (HET: chart) late Tuesday agreed to be bought by two private-equity firms. Texas Pacific Group and Apollo Management topped a bid from Penn National Gaming, offering $90 a share in cash, or $27.8 billion with assumed debt included. The steel sector continued consolidation as Arcelor and Mittal (MT: chart), which are in the process of combining to form the world''s biggest steelmaker, announced they had bought Mexico''s Sicartsa from Grupo Villacero for $1.44 billion. The companies said that the deal would result in the creation of Mexico''s largest steel producer with an annual capacity of 6.7 million tons.

In earnings news, express package delivery company FedEx Corp. (FDX: chart) reported on Wednesday Q2 profit rise of 9% on strong results from its ground delivery business. Earnings for the quarter increased to $1.64 per share, up from $1.53 per share last year. But the company also released a Q3 forecast that was below both the previous year''s results and analysts'' expectations. The company''s shares fell 4% in premarket trading. Dow Jones futures were recently up 16 points, S&P 500 futures rose 2.6 points and Nasdaq futures rose 6.5 points.


7:30AM Asian stocks bounced back led by reversal of Thai central bank decision.
Asian markets ended higher on Wednesday. SET Index of Thailand rebounded 11% to 691.55, after plummeting 15% in the previous session. On Monday the Thai central bank introduced rules designed lock up 30% of foreign-currency deposits for a year and penalize investors trying to repatriate funds within a year. Late Tuesday, Thai authorities reverse the move.