U.S. MARKET AVERAGES

Homebuilders, select tech stocks and materials stocks advanced on a day when market averages rallied.

Broader averages advanced on the first day of the second week when Dow for the first time since June 2001 closed above 11,000. Much has changed during the last four years in the market. Broader average S&P and Dow are still trading at least 5% below their peaks reached in the year 2000 and technology heavy Nasdaq is trading 50% below peak in the same year.

Market staged a modest rally in the early morning as oil and natural gas prices weakened in the morning. Weather related trading dominated trading in energy producing commodities during the day’s session. Fall in energy prices and general weakness in the bond market firmed the prices in the stock market at mid-day.

Solid advances in tech stocks were lost at mid-day. Rise and then fall in Google, Apple Computer, Texas Instruments was not common in other stocks in the tech sectors. Semiconductor chips and equipment stocks advanced led by rise in Broadcom, ASM Lithography, KLA Tencor, and LSI Logic. Stocks on the decline included IBM, Autodesk, Oracle and Sun Microsystems.


MOVERS AND SHAKERS

Goldman Sachs upgraded General Motors (GM: chart) to in line from under-perform due to valuation, given Analyst Robert Barry''s belief that a Chapter 11 bankruptcy filing by the automaker is very unlikely in the near term. Even though the company’s long-term fundamentals are still negative, there are potential catalysts that could improve sentiment and ease bankruptcy fears enough to get the stock to bounce to the mid-$20s during the first half of 2006. The stock rose 5.4%.

Investment Technology Group (ITG: chart) climbed 8.1% after it was upgraded at Sandler O''Neill to buy from hold.

Amazon.com Inc. was also downgraded by J.P. Morgan to underweight from neutral, citing concerns that U.S. growth will continue to be below that of the broader electronic commerce market. The stock fell 2.1%.

Prudential Equity Group upgraded Merrill Lynch & Co to overweight from neutral weight on increased capital markets activity and revenue growth prospects. The stock gained 1.4%.

Abbott Laboratories (ABT: chart) was upgraded to overweight from neutral by J.P. Morgan, on expectations that it Abbott will acquire the vascular and endovascular businesses of Guidant as a result of the Boston Scientific deal. The company’s shares rose 2.1%.

Alkermes Inc. (ALKS: chart) agreed to partner with Eli Lilly on the development and commercialization of inhaled parathyroid hormone for the treatment of osteoporosis. Financial terms weren''t disclosed. Alkermes Inc’s shares rose 7.3%.


INTERNATIONAL MARKETS NEWS

Most Asian-Pacific benchmarks reached new highs, boosted by continuing tech rally, climbing commodity prices and expectations of the Chinese Lunar New Year holiday. Hong Kong’s Hang Seng hit a five-year peak of 1.3% to 15,547.43, Taiwan’s Weighted index gained 0.7%, China’s Shanghai Composite rose 0.5%, while Australia’s All Ordinaries reached an all-time high of 0.8% to 4,775.80. Japan was closed for a national holiday.

European stocks closed little changed with averages retreating from multi-year highs on mixed start of U.S. markets. The auto sector provided support. The German DAX 30 gained 0.01% to 5,537, the French CAC 40 added 0.16% to 4,875, and London’s FTSE 100 edged down 0.01% to 5,731. The euro fell 0.75% to $1.2061.

OIL, METALS, CURRENCIES

Crude oil prices fell below $64 a barrel on profit taking and mild winter weather. Light sweet crude for February delivery dropped 71 cents to $63.50 a barrel. Gasoline fell 3 cents to $1.7677 a gallon. Heating oil traded down 3 cents to $1.7677. Natural gas dropped 27 cents to $9.36 per 1,000 cubic feet. London Brent slipped 57 cents to $62.15.

European gold climbed on inflation worries and weaker dollar against the yen. In London gold rose to $542.60 per troy ounce from $536.30. In Zurich the precious metal advanced to $541.55 from $537.40. In Hong Kong gold climbed $13.20 to close at $542. Silver closed at $9.08, up from $8.96. In New York gold climbed to a new high of $550.50 per troy ounce and silver closed up 11 cents $9.283.