Avalon Pharmaceuticals (AVRX: chart) was a notable gainer with shares soaring 25% ahead of the open after the company said it entered into a collaboration agreement with Merck (MRK: chart). Among companies driven by analyst comment, Google (GOOG: chart) rose nearly 1% after the Internet search giant was upgraded by UBS to buy from neutral, due to valuation. Deere & Co. (DE: chart) was also upgraded by Lehman Bros. to overweight from equal weight. Company''s shares rose 1.3%. S&P 500 futures fell 2.00 points to 1,393.40 and Nasdaq 100 futures slid 4.50 points to 1,740.50. Dow industrial futures shed 25 points to 12,190.


8:15AM U.S. Google and Deere & Co. gained in the pre-open on brokerage upgrades.
Google (GOOG: chart) was upgraded to buy from neutral at UBS, citing valuation. According to analysts, returns in longer-term initiatives, including payments, mobile, video, and other forms of advertising, could take a long time to develop, whereas the company’s fundamentals as an online search engine provide good basis for a buy recommendation at current levels. The stock closed Tuesday up $16.61 at $457.55, but was still down 11% from its Jan. 16 high of $513. Google’s shares traded up 1% in the pre-open.

Deere & Co. (DE: chart), agricultural and construction equipment maker, was upgraded to overweight from equal weight at Lehman Bros. The broker lifted its rating on the stock, due to increased confidence about the durability of higher agricultural prices and the company''s ability to leverage high end market demand. Shares of the company edged up 0.4% in pre-market trading. They have lost 8.1% since hitting an all-time high of $116.50 on Feb. 22, but are still up 13% since the end of 2006.


8:00AM NY-7:00PM Mumbai Sensex tumbles Tuesday on heavy selling.
The Sensex on BSE finished 117.34 points, or 0.92%, lower at 12,579.75. The market saw a very volatile session as it traded within a range of 512 points. The market-breadth was very weak with more than three decliners for every advancer. For 1,959 stocks that declined, 579 advanced and 41 were unchanged. Of the 30 stocks in the Sensex, 21 declined, while the rest advanced. The turnover on BSE was Rs 4,327.59 crore, compared with Rs 3,816 crore on Tuesday. On NSE, the turnover was Rs 8,881.84 crore, higher than Rs 8,361.27 crore on Tuesday.

Economic news

The Bombay Stock Exchange Ltd announced on Wednesday that it was selling a 5% stake to Singapore Exchange for $42.7 million, following a similar deal with Deutsche Boerse last month.

Commerce and Industry Minister Kamal Nath said on Wednesday that India may consider banning cement exports if such a move will help cool prices.

The government on Wednesday hinted at a reduction in tariffs on imported wines and spirits in view of demand from trading partners such as the EU who have threatened to activate the dispute settlement mechanism at the WTO.

Finance Minister P Chidambaram on Wednesday said he was in favor of withdrawal of most tax exemptions in future except for those given to promote R&D, knowledge areas and for the welfare of senior citizens.

Advancers

Indian drug large-cap Cipla led the gainers, up 4.99% to Rs 232.7, on a volume of 3.45 lakh shares. The stock had also surged to an intraday high of Rs 236.50. Dr Reddy’s was up 2.2% to Rs 634.4, Tata Motors gained 2% to Rs 740.6, and Reliance Communications advanced 2.5% to Rs 411.

Engineering and construction large-cap L&T added 1.9% to Rs 1,454.3, on reports that the company was in talks with Japanese Toshiba Corporation for a joint venture for power plants and equipments in India.

Decliners

Cement stocks were the worst hit in the wake of the government announcement of a possible cement export ban. Gujarat Ambuja crashed 8.5% to Rs 104, and ACC tumbled 4.7% to Rs 814. Other cement stocks also followed suit. UltraTech Cement Company was down 1.86% to Rs 805.55, Shree Cement was off 2.51% to Rs 1,138, India Cements lost 5.75% to Rs 152.50) and Birla Corporation dipped 2.60% to Rs 219.

Wipro and Ranbaxy plunged around 4% each to Rs 557 and Rs 310, respectively. ICICI Bank shed 3% to Rs 827. The State Bank of India shed 2.7% to Rs 965. The State Bank of India on Wednesday announced it will soon lift car and other personal loan rates, excluding housing and education, by an average of 0.75%.

Hindalco and ITC slipped 2.5% each to Rs 127 and Rs 158, respectively. HDFC Bank and HLL declined over 2% each to Rs 916 and Rs 168, respectively. Maruti and Tata Steel dropped around 1.5% each to Rs 777 and Rs 413, and Infosys and Grasim were down 1% each at Rs 2,092 and Rs 2,104.


6:30AM European markets were higher on Tuesday on M&A and retail stocks.
European stock markets were higher on Tuesday. By mid morning, Frankfurt Xetra Dax added 0.3% to 6,615.78, the CAC 40 in Paris climbed 0.3% to 5,455.81 and the FTSE 100 in London rose 0.2% to 6,148.0.