U.S. MARKET AVERAGES

U.S. stock markets advanced at opening, following yesterday’s broad rally. Stocks received a boost from Hewlett-Packard’s earnings and news from General Electric which announced increased 2006 profit outlook, a raised dividend and a deal to sell most of its Insurance Solutions business.

The Dow, which underperformed its peers on Thursday, is leading the advance early in Friday's session, climbing by nearly 0.5%. The Nasdaq and S&P 500 are posting modest gains.

Market sentiment was also lifted by better-than-expected profit from computer maker Hewlett-Packard Co late Thursday and news from automaker General Motors Corp. that it does not see itself headed for bankruptcy.

The semiconductor sector has jumped higher in the early going, breaking above a recent trading range to reach its highest level since early October. The sector's rally is fairly broad-based, with Micron (MU: chart) and AMD (AMD: chart) leading the way with gains of about 2.2%. The computer hardware space is also strong, thanks to the earnings-related rally in Hewlett-Packard (HPQ: chart).

In corporate news, Swiss Re, the world''s second-largest reinsurer, said it agreed to buy Insurance Solutions from GE for $6.8 billion. GE also said it now expects faster earnings growth in 2006 and will increase its dividend and stock buyback plan.

Cisco Systems Inc. Has announced plans to buy Scientific-Atlanta Inc, the top U.S. maker of cable television set-top boxes, for $6.9 billion.

Treasury yields are ticking up in the early going after falling significantly in the previous 3 sessions. Without any economic news to drive trading, the 10-year yield, which fell to a multi-week low with its recent slide, is up 2.1 basis points to 4.480%.

MOVERS AND SHAKERS

General Electric (GE: chart) said it will sell most of its Insurance Solutions reinsurance division to Swiss Re for $8.5 billion. The company made that decision after losing $700 million from the insurance business over the last five years. General Electric said it will also lift its share-buyback plan to $25 billion through 2008 from an earlier announced plan of $15 billion through 2007. The company’s stock gained 2.4%.

The computer maker Hewlett-Packard (HPQ: chart) increased its profit forecast after reported earnings, excluding restructuring charges, that were high above expectations. The company''s strong performance came due to steady sales of its personal computers, servers and storage gear. Hewlett-Packard‘s stock added 5%.

The media giant Walt Disney Co. (DIS: chart) posted net income for the fourth quarter that decreased more than 25% mostly because of underperforming films. However, the company’s profit per share beat analyst expectations. Walt Disney’s stock lost 3.2%.

Cisco Systems (CSCO: chart) announced it is going to buy Scientific Atlanta (SFA: chart), a cable television set-top maker, for $6.9 billion. Cisco shares were down 0.5%, while Scientific Atlanta''s stock upped 2.5%.

The apparel company Liz Claibourne (LIZ: chart) announced it has offered to buy J. Jill Group''s (JILL: chart) for about $366 million, or $18 a share in cash, which represents a 40% premium to Thursday''s closing price. Shares of the both companies are expected to be active today.

The apparel retailer The Gap Inc. (GPS: chart) lowered its fiscal year guidance after fashion miscues and a decrease in its same-store sales made earnings dropped 20%. The company’s stock fell 10.9%.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks closed higher, making solid gains on the back of economic optimism, Wall Street rally Thursday and falling crude oil prices. The Nikkei opened sharply up and extended gains to hit a five year high of 1.5% to 14,623,12, buoyed by optimism of economic recovery. Across the region, Singapore’s Straits Times rose 1.4%, Hong Kong’s Hang Seng gained 0.6%, and Sydney’s All Ordinaries climbed 0.9%.

European markets rallied at mid-day trading, boosted by gains in the automotive and airline sectors, made on the back of further slipping crude oil prices. Nestle, which advanced on announcing a plan to buy back $2.3 billion in stock, also provided support. All three major averages, the German DAX 30, the French CAC 40, and London’s FTSE 100 climbed 1.1%.

OIL, METALS, CURRENCIES

Crude oil prices rose on cold U.S. weather after dropping to a five-month low yesterday. Light sweet crude December delivery gained 3 cents to $56.37 a barrel on the Nymex. Heating oil traded at $1.7050 a gallon. Gasoline edged up to $1.4624. Natural gas traded at $11.946 per 1,000 cubic feet. London Brent rose 26 cents to $55.11.