U.S. MARKET AVERAGES

U.S. stock futures predicted a slightly higher opening, though still showing indecisiveness ahead of a key payrolls report with technology giants IBM Corp. and Microsoft Corp. in the spotlight.

The Labor Department released payrolls data, showing 108,000 gain in payrolls registered in December. Figures came far below economists' expectations of non-farm payrolls to rise by 215,000 in December and November's growth of 305,000. The unemployment rate slightly declined to 4.9% from 5%.

IBM (IBM: chart) announced it would be freezing its U.S. pension plan, starting in 2008.

Microsoft (MSFT: chart) was downgraded by Credit Suisse First Boston to neutral from outperform, with the broker saying the stock only is 10% shy of its price target.

Starbucks Corp. reported after Thursday's close a 7% same-store sales rise for December, at the upper end of the coffee chain's targeted range.

Technology consultant Accenture Ltd. may rise after reporting stronger earnings and revenue in the fiscal first quarter than forecast.

Dow Jones futures were recently up 6 points, S&P 500 futures rose 0.5 of a point, and Nasdaq 100 futures rose 0.5 of a point.

ECONOMIC NEWS

The Department of Labor released its closely watched report on U.S. employment in the month of December on Friday, showing weaker than expected growth. At the same time, the report also showed a significant upward revision to November employment growth.

The report showed that the U.S. economy added 108,000 jobs in December following an upwardly revised increase of 305,000 jobs in November. Economists had been expecting jobs to increase by 215,000, which would have matched the increase previously reported for November.

The Labor Dept. noted that the increase in December reflected gains in manufacturing, health care, food services and drinking places, and professional and business services. A decrease in employment in the transportation and warehousing industry helped to offset the gains.

The report also showed that the unemployment rate unexpectedly edged down to 4.9 percent in December from 5.0 percent in November. The decrease in the unemployment rate came as some people left the labor market.

INTERNATIONAL MARKETS NEWS

Most Asian-Pacific benchmarks rallied, continuing a week-long winning streak on the back of strong tech shares and growing optimism about strong Japanese corporate results in 2006. South Korea’s Kospi hit an all-time high of 1.2% to 1,412.79 with Samsung Electronics, up 1.3%. Shanghai Composite rose 1%, while the Nikkei reached a five-year high of 16,428.21. Hong Kong ended up 0.5% on property and banking stocks.

European stocks traded in a tight range with support provided by tech stocks and investors awaiting U.S. payroll data. The German DAX 30 inched up 0.01%, the French CAC 40 gained 0.4%, and London’s FTSE 100 advanced 0.2%.

OIL, METALS, CURRENCIES

Crude oil prices advanced, boosted by increasing gasoline demand and strong economy. Light sweet crude for February delivery gained 47 cents to $63.26 a barrel. Gasoline slightly added to $1.7920 a gallon. London Brent climbed 42 cents to $61.55.

European gold climbed. In London gold rose to $529.50 per troy ounce from $526.90. In Zurich the precious metal advanced to $528.75 from $526.85. In Hong Kong gold fell $3.30 to close at $528.80. Silver opened at $8.80, down from $8.84.

The U.S. dollar traded higher against most major currencies. The euro was quoted at $1.2089, down from $1.2104. The dollar bought 116.19 yen, up from 115.85. The British pound traded at $1.7548, up from $1.7545.

EARNINGS NEWS