10:00PM Frankfurt, 4:00PM New York, 8:00AM Sydney[R]– Better than expected retail sales lifted market averages in the U.S. and helped European markets to rebound from mid-day losses. South Africa lifted its rate to 12% to fight rising interest rate.[/R]

Global Markets Update

U.S. stocks advanced in the morning trading after a better than expected rise in retail sales in May. Sales rose 1% in May and increased 2.5% from a year ago. Weekly claims of unemployment rose 25,000 at the end of last week. The news of better than expected rise in retail sales lifted the U.S. stocks higher. Lehman replaces its finance and operating chiefs, the stock falls. European stocks edged higher after an unsolicited bid from InBev for Anheuser Busch.

Yahoo! Inc ended its formal talks with Microsoft after both parties could not decide on a price. Microsoft has withdrawn its offer of $33 per share. Both parties also could not agree on using search technology on Yahoo network of sites. Yahoo and Google are likely to announce a search pact that will facilitate search on Yahoo websites as early as today.

European stocks recovered from the mid-day losses after a rise in the U.S. market indexes. UK, Swiss and German market indexes rose 0.7% and led the trading in the region. InBev surged 6% after it offered to buy U.S. based Anheuser-Busch for $46.3 billion. Anheuser gained 5% but closed 10% below the offered price. Banks in Germany and France closed higher.

Hong Kong and Shanghai stocks fell as inflation remain at elevated levels and trade surplus declined. China reported consumer price index rose 7.7% in May from 8.5% in April. The National Bureau of Statistics also noted that the producer price index advanced 8.2% from a year ago in May from 8.1% in April. Total trade surplus for the first five months ending in May for China fell 8.6% to $78.02 billion from a year earlier, and the trade surplus dropped 9.9% in May to $20.21 billion.

European Markets indexes

The CAC 40 advanced 0.23% to 4,671.48. In Germany the DAX 30-index gained 46.86 points or 0.70% to 6,697.12. Shares in Switzerland climbed as the Swiss Market index gained 45.09 points or 0.63% to 7,212.39. The FTSE 100 climbed 39.30 points or 0.69% to 5,762.60.

North American Markets indexes

Dow Jones Industrial Average gained 57.81 or 0.48% to a close of 12,141.58, S&P 500 closed up 4.38 or 0.33% to 1,339.87, and Nasdaq Composite Index increased 10.34 or 0.43% to close at 2,404.35. In Toronto TSX Composite closed down 113.93 or 0.77% to 14,602.59.

Of the 30 stocks in Dow Jones Industrial Average, 21 closed higher, 8 closed lower, and one was unchanged.

Microsoft Corp led the gainers in the Dow Jones Industrial Average with a rise of 4% followed by increases in Citigroup of 3.5%, in JP Morgan Chase of 2.3%, in Home Depot of 2.2% and in Bank of America of 2%. Alcoa led the decliners in the Dow Jones index with a loss of 4% followed by losses in General Electric of 2.6%, in General Motors of 2.2% and in Exxon Mobil of 1.75%.

Of the stocks in S&P 500 index, 344 stocks increased, 154 declined, and 2 were unchanged. Of the stocks in the index, 21 stocks fell more than 3% and 46 gained more than 3%.

National City Corp led the gainers in the S&P 500 index with a rise of 21% followed by increases in Cummins of 10%, in WaMu Inc of 9.6%, in MBIA Inc of 9.5%, in SLM Corp of 7.4%.

Key Corp led the decliners in the S&P 500 index with a loss of 24% followed by losses in Archer-Daniels Midlands of 10%, in Yahoo! Inc of 10%, in CenturyTel of 6.5% and in Ensco International of 4.7% and in Lehman Brothers of 4.4%.

Alcoa led the gainers in the S&P 500 index with a rise of 7.3% followed by gains in Ensco International of 6.8%, in Southwestern Energy of 6%, in Apache Corp of 5.8% and in Peabody Energy of 4.7%.

South American Markets Indexes

Chile led the decliners in the Latin American markets with a fall of 1.65% followed by increases in Brazil of 1.43%, in Venezuela of 0.44% and in Mexico of 0.10%.

Peru led the decliners in the region with a loss of 1.4% followed by losses in Argentina of 0.74% and in Colombia of 0.10%.

Asian markets