1:00PM NY, 5:00 PM Frankfurt European markets lost ground, dragged by rate-sensitive stocks.

European stock markets lost ground on Thursday, pressured by renewed concerns about higher bond yields and interest rates. Rate-sensitive real-estate companies were among the most notable decliners, with Land Securities falling 3.5%. Among other companies in focus, mobile-phone maker Nokia dropped 3% after Goldman Sachs downgraded its stock to neutral from buy.

Deals also attracted attention. London Stock Exchange lost 1% after it announced it is in takeover talks with mutually held Borsa Italiana. Shares in NYSE Euronext, which had previously expressed interest in buying Borsa Italiana, dropped 2.3%. The NYSE Shares of the Deutsche Boerse, the operator of the German stock exchange and majority holder of the Eurex futures market, slipped 1.8%.

Further in M&A news, Luxottica Group surged 7.7% after it said it will take over U.S. eyewear maker Oakley in a deal worth $2.1 billion. Electricite de France rose 3.4% on speculation the French government may cut its 87% stake, which would make the firm a more liquid stock. The German DAX tumbled 1.6% at 7,964.71, the French CAC-40 dropped 1% at 6,029.79 and the U.K. FTSE 100 lost 0.8% at 6,596.00.


11:30AM Market averages turned lackluster amid cautiousness about bond yields and rising oil.

U.S. stock averages kept near the flat line in a volatile trading session on Thursday, as concerns about higher bond yields and rising crude oil prices weighed on market sentiment. Crude oil gained 51 cents to $69.34 a barrel, due to a general strike in Nigeria.

Investors also digested data released by the Conference Board. The index of leading economic indicators in May signaled a modest economic growth in the coming months. In another report, the Labor department said that the initial jobless claims rose by 10,000 last week to a two-month high.

By sector, utilities, airlines and broker/dealers were leading decliners, while oil, natural gas and semiconductors advanced. Exxon Mobil (XOM: chart) was the most notable advancer among blue chips, posting an advance of 1.6%. In merger-and-acquisition news, Luxottica (LUX: chart) climbed 8.9% after agreeing to acquire rival Oakley Inc. (OO: chart) for $2.1 billion, an 18% premium to Wednesday''s close. Oakley shares climbed 13%.

Among the companies reporting quarterly earnings, H&R Block (HRB: chart) fell 3.4% after it said it swung to a Q4 loss amid continuing troubles in its mortgage lending arm. Pier 1 Imports (PIR: chart) fell 3.4% after it reported wider Q1 loss on lower sales and profit margins. Coffee chain Starbucks (SBUX: chart) fell 3.1% on full-year profit warning.

In late morning trading, the Dow Jones industrial average was essentially flat, falling 6.50, or 0.05%, to 13,482.92. The Standard & Poor''s 500 index rose 3.29, or 0.22%, to 1,516.13 and the Nasdaq composite index advanced 4.74, or 0.18%, to 2,604.70. Bonds rose moderately, with the yield on the benchmark 10-year Treasury note falling to 5.14% from 5.15% late Wednesday.


9:30AM London is down on weak miners, property stocks and retailers.

The benchmark FTSE 100 Index declined 67.30, or 1%, to 6582 in London at mid-day.

Advancers

There were but a few advancers including professional education provider BPP Holdings, 2% higher after announcing that trading performance for the first half of the year and the year-end will match expectations.

Weir Group, maker of pumps for the mining industry, is the leading advancer on the market, as it surged 10%, on its agreement to buy out U.S. company SPM Flow Control for $653 million.

Decliners

Bradford & Bingley led banks lower, down 1.6%, while Vedanta Resources and Antofagasta Plc led miners lower with the fall of the price of copper. Bradford & Bingley, provider of one in five loans to U.K. landlords, dipped 1.8%. The bank stated that lending margins will edge lower in the first half and will keep falling in the second half on an increase in loan costs.

Vedanta Resources, the copper and zinc large-cap lost 1.6 percent and Antofagasta, owner of copper mines in Chile, shed 1.8%. Copper declined on London Metal Exchange on a slowing demand.