[R]9:45AM U.S. markets opened mixed on rate cuts optimism and disappointing earnings.[/R]
U.S. stocks opened mixed Tuesday. Hopes that the Fed Reserve will cut interest rates amid weaker-than-expected consumer price inflation in April generated positive sentiment, but disappointing results from Home Depot and Wal-Mart Stores weighed. The Labor Department said that the consumer price index rose 0.4% after rising 0.6% in March, while core prices rose 0.2% after a 0.1%gain.

Home Depot (HD: chart) lost 1.7% after posting a 30% profit decline in Q1, missing expectations. The retailer also said annual earnings would be at the low end of its outlook. The world''s biggest retailer Wal-Mart (WMT: chart) traded flat after it said its Q1 earnings met lowered forecasts but its Q2 outlook came at the lower end of analyst expectations. Anglient Technologies (A: chart) jumped 7% on better-than-expected quarterly earnings per share and revenue outlook.

The blue-chip average was pushed higher by shares of General Motors (GM: chart), rising 3.3%, American Express Co. (AXP: chart) and JP Morgan Chase (JPM: chart), both rising 1.1%. Other auto makers also advanced. DaimlerChrysler (DCX: chart) rose 3% after an announcement on Monday that it agreed to sell 80% of Chrysler. Ford (F: chart) climbed 3%. In midmorning trading, the Dow rose 88.01, or 0.66%, to 13,434.79 after rising to a new trading high of 13,444.79. The Standard & Poor''s 500 index was up 8.85, or 0.59%, at 1,512.00, while the Nasdaq composite index recovered from an earlier loss and rose 9.04, or 0.36%, to 2,555.48.

[R]Consumer prices index rose 0.4% in April.[/R]
Tuesday morning, the Department of Labor released its report on consumer prices in the month of April, showing that prices rose a little less than economist had expected. The increase in core consumer prices came in line with estimates. The Labor Department said its consumer price index rose 0.4 percent in April following a 0.6 percent increase in March. The increase came in slightly below economist estimates of a 0.5 percent increase. A significant increase in energy prices contributed to the increase in consumer prices, with energy prices rising 2.4 percent in April after surging up 5.9 percent in March. The rise in energy prices also contributed to a 1.2 percent increase in transportation costs.

The continued increase in energy prices was partly due to a notable increase in gasoline prices, which rose 4.7 percent in April following a 10.6 percent increase in the previous month. The report also showed that the core consumer price index, which excludes food and energy prices, edged up 0.2 percent in April after rising 0.1 percent in March. Economists had expected a 0.2 percent increase. The release of the consumer price data comes on the heels of last week''s report on April producer prices, which showed a slightly bigger than expected 0.7 percent increase in prices. However, the report also showed that core producer prices were unchanged for the second consecutive month.

[R]9:30AM The FTSE 100 is higher Tuesday on takeover activity.[/R]

The FTSE 100 was up 6.6 points at 6,562.1 in mid-day trade.

Advancers

Reuters advanced 3.7% as Thomson Corp agreed an 8.7 billion pounds deal to buy the media and information group. Hanson also rose 3.3% after it agreed to an 8 billion pounds takeover offer from HeidelbergCement of Germany. The recommended offer at 11 pounds per share should create the second-largest construction material company in the world.

Pub operator Enterprise Inns was in focus, as it gained 5.9% after announcing it was exploring whether it could meet the qualifying criteria for admission as a Reit, or real estate investment trust, without the need for material restructuring of its business.
The news gave a boost to the leisure sector with Punch Taverns up 4.1% and Mitchells & Butlers up 1.3%.

Homeserve rose 8.9% as UBS raised its stance on the providers of home assistance services from neutral to buy and predicted an expansion into the US would be a success.

Decliners

Miners continued to fall on the back of a decline in base metal prices and fading bid hopes. Rio Tinto lost 1.6%. Anglo-American was down 0.4%.


[R]9:00AM Stock futures traded flat after inflation data.[/R]
U.S. stock futures were flat Tuesday, reflecting in-line core inflation data and lackluster earnings reports from Wal-Mart Stores and Home Depot. The Labor Department said that U.S. consumer prices rose 0.4% in April, boosted by increases for energy and groceries. Excluding food and energy, the core consumer price index rose 0.2%, meeting forecasts.

Among pre-market earnings highlights, Wal-Mart (WMT: chart) declined 0.8% in pre-open trading as it met expectations with an 8% profit rise, with revenue rising 8.5% to $86.41 billion in Q1. The Home Depot (HD: chart), the world''s largest home improvement retailer, posted Q1 earnings drop of 29.5% to $1.0 billion, or 53 cents per share, compared with $1.5 billion, or 70 cents per share last year, missing analyst estimates of earnings of 59 cents. The stock dropped 2.2%. Agilent Technologies (A: chart) rose 3% in pre-open trade on better-than-expected quarterly earnings per share and revenue outlook.

On the merger-and-acquisition news front, Reuters Group (RTRSY: chart) and Thomson Corp. (TOC: chart) agreed to merge in a deal worth about $17.2 billion. Shares in Reuters Group rose 3.6% in the pre-open. In other corporate news, General motors (GM: chart) and DaimlerChrysler (DCX: chart) were upgraded after DaimlerChrysler''s move to sell 80% of Chrysler. DaimlerChrysler also said that its Q1 profit more than doubled due to the sale of its stake in Airbus owner EADS. S&P 500 futures edged up 1.6 points at 1,510.30 and Nasdaq 100 futures were flat at 1,896.25. Dow industrial futures rose 17 points.


[R]8:45AM Asian markets finish lower across the region with China, Japan leading downfall.[/R]

Asian markets finished lower on Tuesday. Japanese Nikkei 225 settled down 0.9% to 17,512.98. Stocks fell after the Japanese government released the core machinery orders figure falling 4.5%. Fanuc, the largest industrial-robot maker in the world, declined 1%. Steelmaker JFE Holdings lost 1.5%. Mitsubishi Electric, which makes factory machinery and robots, dipped 3.8%.