1:30PM New York – U.S. stocks traded in a tight range on two large acquisition related news and jobs data. Exxon earnings rose 18% from a year ago on 7% rise in sales.

U.S. stocks appeared caught between merger news, earnings from Chevron and Exxon, and jobs data.

Payroll Data

Non-farm payroll in January fell 17,000 on the weakness in construction, financial services, and public sector hiring. Employers in health care, travel and entertainment, and retail sectors added jobs. December payroll data was revised upwards by 64,000 to 82,000 increase and November data was lowered by half to 60,000. Unemployment rate in the month fell to 4.9%.

In 2007, payroll employment increased by an average of 95,000 jobs per month.

Average hourly earnings of production and nonsupervisory workers on private nonfarm payrolls rose by 4 cents, or 0.2 percent, in January to $17.75, seasonally adjusted. This followed a gain of 7 cents in December. Average weekly earnings fell by 0.1 percent in January to $598.18. Over the year, average hourly earnings rose by 3.7 percent, and weekly earnings rose by 3.4 percent.

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during December 2007 was estimated at a seasonally adjusted annual rate of $1,140.2 billion, 1.1 percent below the revised November estimate of $1,153.0 billion. The December figure is 2.3 percent below the December 2006 estimate of $1,167.3 billion. The value of construction spending in 2007 was $1,161.3 billion, 2.6 percent below the $1,192.2 billion spent in 2006.

Merger News

Alcoa and Chinalco purchased 12% stake in the mining company Rio Tinto traded in the UK. The 12% stake was purchased at a cost $14 billion or 7.2 billion pounds at 60 pounds per share, 21% from the yesterday’s close. The surprised deal reflects growing anxieties in China and in the commodities world of Rio Tinto was acquired by BHP for three-to-one stock deal.

Microsoft in a surprise move made an unsolicited offer to buy Yahoo at $44.6 billion or $31 per share. The deal reflects Microsoft frustration with its lack of progress in the on-line advertising market. Microsoft projected that online ad market is likely to grow from $40 billion in 2007 to $80 billion in 2010.

Exxon Mobil and Chevron Earnings

Exxon Mobil reported fourth quarter net income rise of 14% to $11.66 billion from a year ago and earnings per share increased to $2.13 per share or 21% from $1.76 per share a year ago. For the year earnings increased 3% to $40.6 billion and earnings per share rose 10% to $7.28.

Revenues in the quarter rose 18% to $116 billion from $90 billion a year ago and for the year jumped 7.2% to $404.55 billion in 2007 from a year ago.

The Marimba North project, located more than 90 miles off the coast of Angola in approximately 3,900 feet of water, started production ahead of schedule and within budget, according to the earnings release. The project is the first tie-back development to the Kizomba A infrastructure, and is designed to develop 80 million barrels of oil (gross) and is expected to have peak production capacity of about 40,000 barrels of oil per day (gross).

Liquids production of 2,517 kbd (thousands of barrels per day) was 161 kbd lower. Excluding the Venezuela expropriation, divestments, OPEC quota effects and price and spend impacts on volumes, liquids production was down 3%. Mature field decline and PSC net interest reductions were partly offset by increased production from projects in Russia and West Africa.

Chevron reported fourth quarter earnings of $4.9 billion or $2.32 per share compared to $3.8 billion or $1.74 per share. For the full year net income rose 9% to $18.70 billion or $8.77 per share compared to $17.1 billion or $7.80 per share.

“Fourth quarter earnings for our upstream business benefited from a significant increase in the price of crude oil,” said Chairman and CEO Dave O’Reilly. “However, downstream profits were off sharply because of planned and unplanned refinery downtime in the United States, as well as the impact of higher crude-oil costs that were not fully recovered in the sales price of refined products.

“Our results overall capped a successful year for our company,” O’Reilly added. “We achieved record earnings in 2007 and invested a record $20 billion in our excellent queue of capital and exploratory projects. Our financial strength also enabled us to increase the common stock dividend payment for the 20th consecutive year and buy back $7 billion of our common shares.”

Chevron agreed with its unnamed partners to build liquefied natural gas plant with a maximum capacity of one billion cubic feet per day and 5.2 million metric tons of LNG and related products a year.

Chevron commissioned new facilities associated with a $1.5 billion upgrade of the 50 percent-owned GS Caltex Yeosu Refinery, enabling the refinery to process heavier and higher-sulfur crude oils and increase the production of gasoline, diesel and other light products.