U.S. MARKET AVERAGES

U.S. stock futures were sitting well above the flat line, predicting market recovery from the sharp losses in the previous session. Well-received corporate news from Europe and noteworthy economic news due out later in the day, set positive mood, helping stocks rebound from Tuesday’s sell off.

The January personal income and spending report as well as the inflation reading will be among the most important data. Data on U.S. manufacturing, oil inventories and February auto sales will also be in the spotlight.

In corporate news, Google Inc said it sees various opportunities for improvement on its money-making ad sales alongside its popular search results. Google shares were up 1.5 % before the opening bell, following a sharp decline Tuesday after CFO said the company's key revenue source would see slower growth.

In earnings news, design software maker Autodesk Inc. reported better-than-expected profit jump of 26% on sharp demand for its design products.
The company raised its outlook for 2007.

S&P 500 futures were up 2.6 points, above fair value. Dow Jones industrial average futures rose 28 points, and Nasdaq 100 futures were up 4 points.

ECONOMIC NEWS

Personal income and spending showed notable growth in the month of January, according to a report from the Department of Commerce. At the same time, the report also showed an acceleration in the pace of inflation.

The report said personal income rose 0.7 percent in January following an upwardly revised increase of 0.5 percent in December. Economists had expected income to increase by 0.6 percent compared to the 0.4 percent growth originally reported for December.

The Commerce Dept. noted that the increase in personal income reflected several special factors, including new Medicare prescription drug plan payments and cost-of-living adjustments to several federal transfer payment programs.

The report also showed that personal spending grew by 0.9 percent in January after a downwardly revised increase of 0.7 percent in December.

The growth in personal spending came in slightly below the expectations of economists, who had expected growth of 1.0 percent compared to the 0.9 percent growth originally reported for December.

With personal spending growth outpacing the increase in personal income, the personal savings rate came in at a negative 0.7 percent in January compared with a negative 0.4 percent savings rate in December.

As mentioned above, the report also showed that the price index for consumer spending rose 0.5 percent in January after coming in unchanged in December. Excluding food and energy prices, the index rose 0.2 percent following a 0.1 percent increase in the previous month.

Additionally, the price index showed an annual rate of growth of 3.1 percent in January compared to the 2.8 percent year-over-year growth seen in the two previous months. Core prices rose 1.8 percent year-over-year.

INTERNATIONAL MARKETS NEWS

Asian-Pacific benchmarks finished mixed, reflecting positive fund flows and easing political tensions. The Nikkei slid 1.5% on disappointing U.S. economic data and a sharp drop of Google’s shares which hurt the auto and tech sectors. Across the region, Hong Kong’s Hang Seng fell 0.6% on profit taking, Australia’s All Ordinaries tumbled 1.3%, while India’s Stock Exchange Sensitive index surged 1.9% on gains in automobile shares.

European stocks recovered from recent losses to trade higher at mid-day. The German DAX 30 gained 0.5% lifted by deal talk involving BASF. The French CAC 40 rose 0.6% on strong earnings from media and telecommunications conglomerate Vivendi Universal. London’s FTSE 100 climbed 0.6% on miners, including Xstrata.

OIL, METALS, CURRENCIES

Crude oil prices neared $62 ahead of petroleum report, expected to show another rise in U.S. oil inventories. Light sweet crude April delivery gained 49 cents to $61.90 a barrel. London Brent for April delivery added 65 cents to $62.41 a barrel.