U.S. MARKET AVERAGES

U.S. stock futures were sitting at the unchanged mark, pointing to a flat market opening, reflecting tame oil prices, disappointing news from the tech sector and expectations of key U.S. trade deficit data. On Thursday stock averages closed mixed with the Nasdaq modestly lower and the Dow well off its intraday high.

U.S. crude prices fell to $62.52 a barrel but edged a little higher on concerns of supply disruptions.

Oracle Corp. (ORCL: chart), business software company, said it will cut 2,000 jobs in connection with its acquisition of software maker Siebel Systems and gave a profit outlook for the remainder of the year roughly in line with estimates. After the bell Thursday, Oracle revealed that it had closed its $5.9 billion acquisition of Siebel Systems. The company said it expects Q3 earnings of 13-14 cents per share, up from 10 cents a share last year with revenues higher by 17-19%. Excluding one-time items, Oracle said it will earn 18 cents per share in the quarter, vs. expectations of 19 cents per share on revenues of $3.45 billion. For Q4, Oracle expects earnings of 21-23 cents per share on revenue growth of 13%-17%.

U.S. trade data is expected to be the main focus of the day amid growing concern about the competitiveness of U.S. exporters.

Standard & Poor's 500 futures were up 0.7 points, just below fair value. Fresh off two days of gains, the Dow Jones industrial average futures were up 10 points. Nasdaq 100 futures were flat.

ECONOMIC NEWS

Friday morning, the Department of Commerce released its report on the U.S. trade deficit in the month of December. The report showed that the trade deficit widened more than economists had been expecting and reached a record high for the full year.

The Commerce Dept. said that the trade deficit widened to $65.7 billion in December from an upwardly revised $64.7 billion in November. Economists had been expecting the deficit to widen to $65.0 billion from the $64.2 billion originally reported for the previous month.

The wider trade deficit came as the value of both imports and exports increased in December. The report showed that imports rose 1.9 percent to $177.2 billion while exports rose 2.1 percent to $111.5 billion.

With the increase in December, the trade deficit for 2005 reached an all-time high of $725.8 billion, up 17.5 percent from the previous record of $617.6 billion set in 2004. The increase came as a 12.9 percent increase in imports outpaced a 5.7 percent increase in exports.

The Commerce Dept. noted that the trade deficit as a percentage of U.S. gross domestic product rose to 5.8 percent in 2005 from 5.3 percent in 2004.

INTERNATIONAL MARKETS NEWS

Asian-Pacific benchmarks finished mixed. The Nikkei dipped 2% in the morning but economic data, which supported industrial shares, helped the index to erase some of the losses and close 1.1% below the flat line. Taiwan Weighted index declined 0.5%. Among the gainers, Shanghai Composite rose 1% and South Korea’s Kospi reversed from losses to surge 1.85% after the Bank of Korea raised interest rate and institutional buying lifted banks and automotives.

European stocks lost ground Friday, erasing yesterday’s gains on weak energy and tech stocks and little corporate news. Lackluster close on Wall Street also hurt sentiment. The German DAX 30 lost 0.6%, the French CAC 40 fell 0.4%, and London’s FTSE 100 slipped 0.6%.

OIL, METALS, CURRENCIES

Crude oil prices eased back on falling fuels demand. Light sweet crude for March delivery fell 12 cents to $62.50 a barrel. Heating oil was steady at $1.6067 a gallon. Gasoline traded at $1.5147. Natural gas gained 2 cents to $7.455 per 1,000 cubic feet.

European gold traded lower Friday. In London gold fell to $558.75 bid per troy ounce from $559.60. In Zurich the precious metal traded at $558.03, down from $559.10. In Hong Kong gold climbed $3.10 to close at $559.5. Silver opened at $9.49, down from $9.56.

The U.S. dollar lost ground against other major currencies. The euro was quoted at $1.1972, up from $1.1970. The dollar bought 117.46 yen, down from $118.82. The British pound stood at $1.7470, up from $1.7398.

EARNINGS NEWS