[R]1:00PM NY, 5:00 PM Frankfurt European markets gained ground on deal news and strong mining stocks.[/R]

European stock markets gained ground on Monday, recovering from the sharp losses posted last week. Positive market sentiment was generated by gains in the shares of mining firms as well as deal speculations, involving U.K. gas company Centrica. Miners were leading advancers, with Rio Tinto up 2.4% and Vedanta Resources posting gains of 2.5% as gold prices rebounded.

Centrica added 2.2% amid reports that Gazprom is not planning to bid for either Centrica or Scottish & Southern Energy. Also on the deal news front, German steelmaker ThyssenKrupp rose 2.3% amid speculation that the company might be in bid talks with either U.S. Steel Corp or Russia''s Severstal. The French Vallourec, a maker of steel tubes, climbed 3.7%, following news that Russian gas giant Gazprom may bid for company.

Banking group Barclays was also in focus. The bank’s shares increased 1.5% on reports that hedge-fund firm Atticus Capital LP acquired shares. On the side of the losers, Rexam slipped 3.3% after it agreed to buy the plastics-packaging business of Owens-Illinois for $1.83 billion. The German DAX Xetra 30 advanced 1.5 % at 7,706.10, the French CAC-40 index rose 1% at 5,940.09 and the U.K.''s FTSE 100 gained 1% at 6,567.50.


[R]11:30AM U.S. market averages traded in a lackluster fashion.[/R]

U.S. stocks turned to choppy trading, as investors restrained from making significant moves before the release of key economic data later this week, looking for indications of the strength of the economy and the outlook for interest rates.

Rate-sensitive housing stocks moved notably lower, with Meritage Homes (MTH: chart) and Hovnanian Enterprises (HOV: chart) falling 4.6% and 3.4%, respectively. Airline stocks also moved back to the downside. AirTran (AAI: chart) led the sector lower, falling 4% after extending its offer for Midwest Air (MEH: chart). Internet, some retail, and real estate investment trusts also declined.

At the same time, utilities stocks posted considerable strength. Along with utilities, pharmaceutical stocks also stood out among gainers. Medivation (MDVN: chart) surged 26% on favorable results from its Alzheimer''s drug Dimebon. Financial stocks posted gains amid expectations of strong results from brokers Lehman Brothers, Goldman Sachs and Bear Stearns, hue out this week.

Among stocks driven by analyst analysis, Amerigroup (AGP: chart) jumped 5.6% after the health care insurer was upgraded at Jefferies to kold from underperform. Shares of H&R Block (HRB: chart) climbed 5% after UBS upgraded its rating on the financial services provider to buy from neutral. UBS said the company could become a buyout target after selling its subprime mortgage business.

Among individual stocks, shares of Emcor (EME: chart), construction services provider, rose 8% after the company raised its full-year guidance and announced plans for a two-for-one stock split. In late morning trading, the Dow Jones industrial average fell 9.02, or 0.07%, to 13,415.37. The Standard & Poor''s 500 index rose 0.44, or 0.03%, to 1,508.11 and the Nasdaq composite index fell 0.59, or 0.02%, to 2,574.13.


[R]9:45AM U.S. stocks opened flat amid rising bond yields.[/R]

Wall Street opened flat, reflecting further advance in bond yields and solid gains in overseas markets. The yield on the Treasury''s 10-year note jumped to 5.16% Monday from 5.11% late Friday.

Among companies in focus, Dow component Johnson & Johnson (JNJ: chart) added 0.9% after Credit Suisse upgraded the stock to neutral from underperform, saying that it hah underperformed rival pharmaceuticals by 17% over the last 12 months. International Business Machines (IBM: chart) revealed that it is the suitor behind a $746 million offer for Telelogic. IBM''s stock fell 0.5%.

In early trading Monday, the Dow Jones industrial average fell 3.66, or 0.03%, to 13,420.73. The Standard & Poor''s 500 index rose 0.12, or 0.01%, to 1,507.79 and the Nasdaq composite index declined 1.27, or 0.05%to 2,574.81.


[R]9:30AM FTSE 100 is higher at mid-day on Monday on miners, bid speculation.[/R]

The FTSE 100 in London was 0.8% stronger at 6,556.2.

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