U.S. MARKET AVERAGES

U.S. stock markets opened flat but stocks have recently edged higher and currently the Dow and S&P 500 are in the positive territory. Today’s market drivers are merger-and-acquisition news and upbeat earnings news, including third-quarter earnings report from Wal-Mart.

Wal-Mart Stores reported third-quarter net income rose 3.8% to $2.4 billion, or 57 cents a share, with revenue up 10% to $76.25 billion, meeting analyst estimates. The world's largest retailer projected Q4 between 82 cents and 86 cents a share.

Georgia Pacific (GP: chart) said privately-held Koch Industries has offered $48 a share for the maker of branded paper goods, or $13.2 billion in cash and $7.8 billion in assumed debt. The offer is a 38.5% premium to Friday''s close.

Knight Ridder (KRI: chart) announced that its board has decided to explore strategic alternatives, including the possible sale of the company. The media firm stated that Goldman Sachs, its long-time financial advisor, is helping with the process.

The paper products sector has jumped sharply higher, as Georgia-Pacific (GP: chart) is up more than 36% on a takeover deal announced over the weekend. Energy stocks are rising in early trading with the oil service space up about 1.4%. Retail stocks are posting gains as well, boosted by earnings from Wal-Mart (WMT: chart) and Lowe's (LOW: chart).

There are few sectors moving notably to the downside. Bank, gold and HMO stocks are showing modest weakness. Chemical and airline stocks are also sitting below the unchanged mark.

The Dow Jones industrial average gained 13.05, or 0.12%. The Standard & Poor''s 500 index was up 1.08, or 0.09%, and the Nasdaq composite index rose 2.06, or 0.09%.

Bonds declined after an auction last week catapulted them from eight-month lows, with the yield on the 10-year Treasury note rising to 4.57% from 4.56% last Thursday.

MOVERS AND SHAKERS

Wal-Mart Stores Inc. (WMT: chart) reported third-quarter results that came above analyst expectations, excluding costs of $40 million connected to Hurricanes Katrina, Rita and Wilma. The company also offered a fourth-quarter outlook equal to recent Wall Street expectations. Wal-Mart’s stock gained 6%.

The retailer Lowe''s Cos. Inc. (LOW: chart) also posted earnings that came in ahead of analyst forecasts. The company’s shares added 3.9%.

The maker of branded paper goods Georgia Pacific Corp. (GP: chart) said it has received an offer of $48 a share, or $13.2 billion in cash and $7.8 billion in assumed debt, from privately-held company Koch Industries. Georgia Pacific’s shares soared almost 40%.

Starwood Hotels & Resorts Worldwide (HOT: chart) agreed to sell 38 of its properties to Host Marriott Corp. (HMT: chart) for nearly $4 billion, including debt assumption. Host Marriott said it expects the acquisition to lift earnings in 2006. Starwood shares lost 0.3% while Host Marriott''s stock added 1.1% on Friday.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks finished the session mixed. The Nikkei advanced in the morning but reversed course in the afternoon to close down 0.3% largely due to losses in the financial sector which overweighed gains in tech stocks. South Korea’s Kospi rose 0.1% and hit a fresh peak of 1,257,63. Among other regional markets, Hong Kong’s Hang Seng lost 0.8%, while Australia’s All Ordinaries climbed 0.7%.

European markets opened lower but rebounded at mid-day as oil companies like BP, Dutch Royal Shell and Total gained on the back of rising oil prices and investors digested a lot of deal talk. The German DAX 30 gained 0.3%, the French CAC 40 added 0.4%, and London’s FTSE 100 rose 0.2%.

OIL, METALS, CURRENCIES

Crude oil prices briefly crossed $58 a barrel on weather forecast, predicting a cold snap in the US. Light sweet crude December delivery rose 57 cents to $58.10 before slipping to $57.95, up 42 cents. Heating oil traded at $1.75 a gallon. Gasoline added a cent to $1.50. Natural gas gained 2 cents to $11.93 per 1,000 cubic feet. London Brent advanced 58 cents to $55.47.

Gold prices climbed in European trading. In London the precious metal was fixed at $469.75 per troy ounce, up from $467.20. In Zurich gold advanced to $469.85 from $466.35. In Hong Kong gold rose $4.60 to close at $470.55. Silver traded unchanged at $7.46.

The U.S. dollar traded mixed against other major currencies. The euro was quoted at $1.1741, up from $1.1706. The dollar bought 118.42 yen, up from 117.97. The British pound traded at $1.7452, up from $1.7395.

EARNINGS NEWS