In London commodities stocks paced the gains. Mining giant Rio Tinto jumped 5.4% on speculations that it might receive a joint takeover bid from BHP Billiton and Brazilian miner Companhia Vale do Rio Doce. BHP Billiton rose 4%. Other miners, such as Antofagasta and Xstrata also gained as gold futures rallied to hit $700 an ounce. Oil companies also stood out among gainers, with Royal Dutch Shell, up 2%. However, banking shares posted weakness on continuous credit worries. Northern Rock dropped 3% and Standard Chartered fell 2.1%


[R]11:30AM Market averages turned lackluster. U.S. mortgage foreclosures hit a record high.[/R]

U.S. stock averages turned to a lackluster trading fashion, as ongoing credit market and housing worries offset upbeat sentiment generated by largely positive economic data and retail sales in August. On Thursday, the Federal Reserve injected another $31.25 billion through three repurchase agreements to help keep the markets liquid.

The Mortgage Bankers Association said in a report Thursday that the share of all U.S. mortgages entering foreclosure hit an all-time high of 0.65% in Q2, rising from 0.58% in Q1, The number of subprime borrowers making late payments rose 14.82% from 13.77%. The news sent housing stocks further lower. Tobacco, airline and financial stocks also moved to the downside.

Mortgage lender Countrywide Financial (CFC: chart) fell 3.6% after it announced plans to cut another 900 jobs, following the elimination of about 500 positions last month. In the tech sector Apple (APPL: chart) shares slid 1% after the technology products maker cut the price of its iPhone.

In late morning trading, the Dow Jones industrial average rose 12.27, or 0.09%t, to 13,317.74. The Standard & Poor's 500 index was up 1.20, or 0.08%, at 1,474.06, and the Nasdaq composite index rose 1.72, or 0.07%, to 2,607.67. Bonds were little changed. The yield on the benchmark 10-year Treasury note was at 4.47%, the same as late Wednesday.


[R]09:45AM Wall Street opened higher on lower initial jobless claims and robust productivity.[/R]

U.S. stocks bounced back into the positive territory at opening, boosted by a sharp drop in U.S. jobless claims and a stronger-than-forecast productivity report. Some better-than-expected retail sales reports also provided support. The Labor Department said initial claims for state unemployment benefits fell by 19,000 after five straight weeks of increases. Productivity in the U.S. nonfarm business sector was revised up to an annual rate of 2.6% in Q2 from 1.8% gain reported earlier.

Retailers were in focus Thursday, with most of them posting in-line or better-than-expected sales figures. Dow component Wal-Mart (WMT: chart) gained 1%, as it posted a stronger-than-forecast 3% sales rise for August. Ann Taylor Stores (ANN: chart) rose 4.5% after posting 2.9% same-store sales increase, beating the 1.9% sales decline projected by analysts.

On the side of the losers, Gap (GPS: chart) dropped 2.8% after it reported a better-than-expected 1% sales drop. Stein Mart (SMRT: chart) fell 2.6% after posting August same-store sales decline of 5.2%, worse than the 4% fall estimated by analysts. Limited Brands and J.C. Penney (JCP: chart) lost about 1% each on disappointing sales results.

In global economic news, the European Central Bank and the Bank of England both held rates unchanged. In addition, the ECB on Thursday injected another $57 billion into the banking system. The Dow Industrials were 10.9 points higher at 13,316.4. The S&P 500 rose 0.3 points at 1,472.6, while the Nasdaq gained 1.1 points at 2,607.05.


[R]9:30AM New York, 7:00PM Mumbai – Deal making and expectations of strong industrial activities in the current quarter lifted the index.[/R]

Sensex in Mumbai trading closed up 170.16 or 1.1% to 15,616.31. CNX Nifty closed up 42.75 or 0.96% to 4,518.60.

Of the stocks traded on Bombay Stock Exchange, 1,698 closed higher 1,050 declined, and 74 were unchanged. The daily turnover on the exchanges was 4,646 crore rupees compared to 5,167 rupees in the previous session. The turnover on the National Stock Exchange declined to 9,937 crore rupees from 10,939 crore rupees a day ago.

The broad rally in the market was evident in oil and gas, consumer durables, auto, and banking stocks. Of the 30 stocks in the Sensex, 27 closed higher and 3 declined.

State Bank of India increased 2.6% to 1,635 rupees. The bank plans to raise 1,500 crore rupees in a bond issues.

Cement stocks led the rally. Birla Corporation jumped 3.6% to 317 rupees followed by 1.7% rise in ACC to 1,101 rupees, 1.6% gain in Ambuja Cement to 140 rupees, and 4% in India Cements to 274 rupees.