U.S. MARKET AVERAGES

Upbeat economic data, strong October retail sales, and rebound on oil prices have been supporting market sentiment. Presently, the three major averages are sitting near their intraday highs with the Nasdaq up 1.1%, followed by the Dow, up 0.8%.

Data on third-quarter business productivity, showing a higher-than-anticipated jump of 4.1% and the unexpected fall of unit labor costs by 0.5% provided a considerable boost to the market sentiment. In his testimony to the Joint Economic Committee in Congress, the Fed Reserve Chairman Greenspan reported solid economic growth, easing persistent worries over rising inflation.

The nation's retailers posted surprisingly strong October sales on Thursday, powered by better merchandising and strong consumer demand. According to the International Council of Shopping Centers the overall jump in same-store sales is 4.4%, higher than the previously expected 4% increase.

The following are bright spots among retailers. Abercombie & Fitch (ANF: chart) posted a 31% jump in same-store sales, two times exceeding Wall Street’s expectations. Another gainer was Wet Seal (WTSL: chart), posting a 47% leap in October comparable store sales, well above estimates. Wal-Mart (WMT: chart) released 4.3% same-store sales increase, Costco Wholesale (COST: chart) beat estimates by reporting a 10% sales rise.

With regard to sectors, the Energy sector is fighting for leadershipon rebounding oil prices. The Tech sector is also strong with improved interest in chip makers like Intel and Texas Instruments. Reports that Merck (MRK: chart) didn''t fail to warn about Vioxx dangers and didn''t engage in consumer fraud has been a victory for both the Health Care sector and the Dow Industrials.

Advancing by 1.8%, the biotech sector is setting new intraday highs. Energy stocks have also shown improvement, extending recent gains. The oil sector is now up about 1.5%.

Very few sectors point to the downside. The gold sector has fallen 1%, reaching a new intraday low. The airline sector has been weak recently, retreating from last-week’s high trading levels.

Apple (AAPL: chart) has gained another 3%, extending its 52-week high. SanDisk (SNDK: chart) is also adding to its peak. Marvell Technology (MRVL: chart) has reached a new high as well.

Guidant (GDT) has dropped to a new 52-week low on lingering concerns about its merger with Johnson & Johnson (JNJ: chart). Skyworks (SWKS: chart) and Macrovision (MVSN: chart) have fallen to fresh nadirs on earnings news.

MOVERS AND SHAKERS

Retailer Wal-Mart Stores Inc. (WMT: chart) reported an increase of 4.3% in same-stores sales for October. The company expects same-store sales growth of 3%-5% for November. Wal-Mart''s stock gained 0.9%.

Cable giant Comcast Corp. (CMCS: chart) posted third-quarter net income that came slightly below analyst expectations. The company’s stock added 2.5% yesterday, but is expected to be under pressure today.

ECONOMIC NEWS

Thursday morning, the Department of Labor released its report on initial jobless claims in the week ended October 29, showing a decrease compared to the previous week.

The report showed that jobless claims fell to 323,000 from the previous week''s revised figure of 331,000. Economists had expected 330,000 jobless claims compared to the 328,000 originally reported in the previous week.

The Labor Dept. said that 18,000 of the new jobless claims were related to Hurricanes Katrina and Rita while an additional 1,400 were tied to Hurricane Wilma. With the increase, the hurricanes have now led to a total of 521,400 layoffs.

The data sheds some light on the October employment report that is due to be released on Friday. Economists expect the report to show that the U.S. economy added 110,000 jobs in October, while the unemployment rate is expected to remain at 5.1 percent.

The Federal Reserve is likely to be pleased with the Department of Labor''s preliminary report on third quarter productivity, as it showed much better than expected productivity growth as well as an unexpected decline in unit labor costs.

The report showed that productivity in the non-farm business sector rose by 4.1 percent in the third quarter compared to the upwardly revised 2.1 percent growth seen in the second quarter. Economists had expected much more modest growth of 2.7 percent.