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*BUSH TALKED WITH ALLIES, PRESS SECRETARY SNOW TELLS REPORTERS
*RICE TO ANNOUNCE OFFER LATER TODAY AT U.S. STATE DEPARTMENT

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1.4x norm vol, 0.29%
Banks 1.9x, Insurance 1.6x, Other 1.3x, Constructi 1.3x

LO net flow $ 88m
+ Utilities /Telecom /Chemicals / Technology/ Industrial
- Food & Bev /Oil & Gas /Personal &/ Insurance / Autos & Pa

HF net flow $ 2m
+ Telecom /Oil & Gas /Travel & L/ Basic Reso/ Industrial
- Banks /Constr & M /Retail / Technology/ Autos & Pa

Sectors with largest in/out flows
Telecom +$49,947,100 Food & Bev -$-21,113,996
Utilities +$25,637,898 Banks -$-18,038,017
Oil & Gas +$14,802,751 Autos & Pa -$-14,614,172
Industrial +$14,723,106 Insurance -$-13,834,138

Large mkt share sectors
Travel & Leisure, Constr & Materials, Media, Basic Resources

Large mkt share stocks
ACCOR SA, LAND SECURITIES GROUP PLC, ENDESA S.A., BOUYGUES, BAA PLC, REUTERS
GROUP PLC, CARNIVAL PLC, BOC GROUP PLC, HEINEKEN NV, RDS B, MEDIASET SPA, Travel
& Leisure, CARREFOUR SA, ADIDAS-SALOMON AG, BP PLC

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** US MARKETS **
Dow -1,63%; Nasdaq -2,06%; S&P -1,59%; Soxx -2,16%; Russel2k -2,54%; DJAIG
-0,36%; 10yr Bond 0,12%; 10yr Yield 5,06%; Crude future 71,85; Gold 652,67

| Utilities -1%| Industrials -1,21%| Financials -1,47%| ConsDisc -1,48%|
ConsStaples -1,5%| Healthcare -1,5%| Telecom -1,76%| Energy -1,79%| Technology
-2,05%| Materials -2,26%

** US HEADLINES **
- Stocks in U.S. Slide, Head for Worst Month Since 2002; Shares of GM Fall
- Paulson’s First Hurdle May be Restoring Treasury’s Economic-Policy Clout
- Fed Minutes May Disclose More-Diverse Opinions on U.S. Growth, Inflation
- GM, Ford Trucks Probably Led Decline in May U.S. Sales as Fuel Prices Rise

** US: IN PLAY TODAY **
Investors will get the latest read on regional manufacturing activity
when May Chicago PMI hits the wires at 16:00 CET; however, the focal point
throughout the session will be the 20:00 CET release of the FOMC minutes, with
investors looking for clues about the direction of Fed policy.
On the earnings front, Costco (COST) and Tiffany &Co (TIF) are the only notable
reports before the bell while Hovnanian Enterprises (HOV), ADC Telecom (ADCT)
and Novell (NOVL) are among only a few noteworthy reports scheduled after the
close.

** ASIAN MARKETS **
Nikkei -2,47%; Kospi -0,87%; HSI -0,66%; Taiwan -0,46%; China 0,01%; India
-4,82%; Thailand -1,31%; Australia -1,64%

** ASIAN HEADLINES **
- Asian Stocks Drop, Headed for Worst Month Since September 2002; Sony Falls
- Japan’s Wages Rise for Third Month, Signaling Consumers Will Propel Growth
- DoCoMo Chief Executive Aims to Ally With PC-Based Search Engine This Year
- London Metal Exchange Extends Trading to Capture Asian Day, China Business
- Philippine Economic Growth Slowed to 0.9 Percent in First Quarter on Taxes
- Shanghai Aims to Start Stock Index Futures Trading After Gaining Approval

** EUROPEAN MARKETS **
S&P future -0,03%; Bund future 0,09%; Crude future 71,85; €/$ 1,28744; Gold
652,67

** EUROPE IN PLAY TODAY **

- Arcelor SA: Alexei Mordashov, the billionaire owner
of Russian steel producer OAO Severstal, whose steel
company plans to merge with Arcelor, said he won’t increase his
stake in Arcelor beyond 38 percent.

- Corus Group Plc: U.K.’s largest steelmaker will
report first-quarter earnings figures, according to the company’s
web site.

- Credit Suisse Group: Switzerland’s second-biggest
bank raised its stake in London Stock Exchange Plc to
9.3 percent from 7.04 percent held on May 16, building on its
position as the exchange’s second-largest shareholder.

- Royal Philips Electronics NV: Europe’s largest
consumer electronics maker will hold an analyst day for its
Medical Systems business at the company headquarters in
Amsterdam.

- Societe Generale SA: France’s third-largest bank
plans to proceed with “targeted” overseas acquisitions,
Chairman Daniel Bouton said at the company’s annual shareholders
meeting today.

- Suedzucker AG: The world’s biggest sugar producer
by volume may report a 38 percent drop in fiscal fourth-quarter
profit to 53 million euros, because of lower sugar prices in
Europe.

** EUROPE: UPS & DOWNS **

+ KBC PRICE ESTIMATE RAISED TO EU89.1 FROM EU86.4 AT DEUTSCHE
+ LVMH RAISED TO `OUTPERFORM’ FROM `IN-LINE’ AT GOLDMAN SACHS
+ BNP PARIBAS PRICE ESTIMATE RAISED TO EU91 FROM EU87 AT UBS
+ SOCIETE GENERALE RAISED TO `BUY’ FROM `NEUTRAL’ AT UBS

- HEINEKEN CUT TO `SELL’ FROM `HOLD’ AT CITIGROUP
- STMICROELECTRONICS PRICE EST. CUT TO EU13 FROM EU15 AT LEHMAN
- CREDIT AGRICOLE PRICE ESTIMATE CUT TO EU36 FROM EU38 AT UBS
- UMICORE PRICE ESTIMATE CUT TO EU135 VS EU150 AT CREDIT SUISSE
- BASF PRICE ESTIMATE CUT TO EU62 FROM EU66 AT CREDIT SUISSE
- DSM PRICE ESTIMATE CUT TO EU38 FROM EU41 AT CREDIT SUISSE
- CIBA PRICE EST. CUT TO SF61 FROM SF69 AT CREDIT SUISSE
- AKZO NOBEL PRICE EST. CUT TO EU47 FROM EU50 AT CREDIT SUISSE

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With derivatives positions. Board members back from holiday, meeting tonight.

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With derivatives positions. Board members back from holiday, meeting tonight.

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** US HEADLINES **
- Kinder Morgan Gets $13.4 Billion Takeover Bid From Group Led by CEO Kinder
- U.S. Stocks, Cheapest in 10 Years Relative to Earnings, May Lure Investors
- Global Economic Boom Stokes Inflation, Increasing Chance of Hard Landing
- Companies Rush to Bond Market as U.S. Borrowing Cost Hits Six-Month High
- Snow’s Ordeal May Be Near Conclusion as Bush Considers Evans for Treasury

** ASIAN MARKETS **
Nikkei -0,35%; Kospi -0,75%; HSI -0,33%; Taiwan -0,46%; China 0,87%; India
0,84%; Thailand -0,39%; Australia 0,02%

** ASIAN HEADLINES **
- Japan Industrial Production Rises as Unemployment Stays at Seven-Year Low
- Asian Stocks: Japan’s Nikkei Drops, Led by Retailers; Hyundai Motor Falls
- China’s Steel Mills Likely to Accept 19 Percent Ore Gain, Executive Says
- India’s Nuclear Power Plans $1.2 Billion Spending on Stake in Uranium Mine
- Bank of Japan’s Fukui Says That Reserves, End to Zero Rates Are Unrelated
- Hewlett-Packard to Hire More People, Expand Sales Network in China, India
- India’s Economic Growth Probably Accelerated, Led by Gains in Services

** EUROPEAN MARKETS **
S&P future -0,24%; Bund future 0%; Crude future 71,5; €/$ 1,28185; Gold 650,98

** EUROPE: IN PLAY TODAY **
- Money supply expansion in the 12 nations sharing the euro may have held near
the fastest pace in almost three years in April, reinforcing the argument for
higher interest rates, a survey of economists shows. The European Central Bank’s
preferred measure of money supply, M3, probably increased 8.5 percent from a
year earlier after growing 8.6 percent in March, the most since July 2003,
according to the median of 31 estimates in a Bloomberg News survey. The ECB will
publish the report at 10 a.m. in Frankfurt.

- Vodafone Group Plc, the world’s biggest mobile-phone company, reported a
fiscal full-year loss after writing down the value of assets. The net loss in
the year through March was 21.9 billion pounds ($40.9 billion), or 35.01 pence a
share, compared with a profit of 6.41 billion pounds, or 9.65 pence, a year
earlier. The loss stems from a writedown of assets,mostly related to the German
unit.

- KBC Group NV, Belgium’s second-largest financial-services company, said
first-quarter profit rose 37 percent, helped by higher earnings from banking.
Net income was 980 million euros ($1.3 billion) compared
with 717 million euros a year earlier, Brussels-based KBC said
on its Web site today. That beat the 820 million-euro median
estimate of 10 analysts surveyed by Bloomberg News.

** EUROPE: UPS & DOWNS **
+ ROYAL DUTCH SHELL RAISED TO `BUY’ FROM `NEUTRAL’ AT UBS
+ ENI RAISED TO `BUY’ FROM `NEUTRAL’ AT UBS
+ EUROPE PHONE GEAR STOCKS RAISED TO OVERWEIGHT AT CREDIT SUISSE
+ LUKOIL PRICE ESTIMATE RAISED 2% TO $116 AT CREDIT SUISSE
+ MAN AG PRICE ESTIMATE RAISED TO EU57 FROM EU52 AT UBS
- CABLE & WIRELESS PRICE ESTIMATE CUT TO 95P FROM 100P AT LEHMAN

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** US MARKETS **
Dow 0,6%; Nasdaq 0,55%; S&P 0,57%; Soxx 0,82%; Russel2k 0,55%; DJAIG
1,18%; 10yr Bond 0,13%; 10yr Yield 5,05%; Crude future 71,29; Gold 653,7

| Energy 0,43%| ConsStaples 0,17%| Materials 1,36%| Telecom 1,21%|
Utilities 1,1%| Financials 0,76%| Healthcare 0,56%| Technology 0,46%| ConsDisc
0,44%| Industrials 0,43%

** US HEADLINES **
- U.S. Labor, Manufacturing Reports May Point to Slowdown, Economists Say
- Dollar May Decline on Concern U.S. Growth Will Trail Both Europe and Japan
- Wal-Mart’s Same-Store sales Rise 2.3 Percent; `Paycheck Cycle’ Pronounced
- U.S. Stocks Gain for First Week in Three on Gross Domestic Product Report
- U.S. 10-Year Treasuries Hold Last Week’s Gains on Signs Economy May Cool
- FedEx to Purchase Watkins for $780 Million, Expanding Canada-U.S. Traffic

** US MARKET ARE CLOSED FOR MEMORIAL DAY **

** ASIAN MARKETS **
Nikkei -0.34%; Kospi 0.51%; HSI 0.51%; Taiwan -0.01%; China 1.67%; India 1.07%;
Thailand -0.04%; Australia 1.1%

** ASIAN HEADLINES **
- Asian Stocks Advance, Paced by Sony and Hyundai Motor; BHP Billiton Climbs
- Hankyu Offers $3.5 Billion for Osaka Competitor Hanshin Electric Railway
- General Electric, China Sign Agreement to Develop Clean Energy Technology
- Japan’s April Retail Sales Fell as Wet and Cool Weather Deterred Shoppers
- Shaukat Aziz Says Pakistan Economy May Expand as Much as 8 Percent a Year
- South Korea to Ease Telecom Regulations, Communications Minister Rho Says
- Ctrip May Buy Companies in Asia as More Chinese Citizens to Travel Abroad
- CapitaLand, Keppel Land Shares Drop After Groups Lose Singapore Casino Bid
- Sanyo Plans to Double Sales at Battery Unit to $8.9 Billion in Four Years
- China Stocks Withstand Emerging-Market Slump, May Rise on Domestic Demand

** EUROPEAN MARKETS **
S&P future -0.03%; Bund future -0.08%; Crude future 71.29; €/$ 1.27455; Gold
650.1

** IN PLAY TODAY **
- Arcelor shareholders are attempting to block the plan to buy OAO Severstal and
thwart Mittal Steel’s bid by forming a group with a 20% stake in Arcelor (The
Business).

- Lafarge is set to exceed cost cutting targets it announced back in February
according to the company’s CEO (le Journal des Finances).

- Volkswagen’s could spend up to E1bln as it plans to reduce its workforce (Der
Spiegel). In other news, the automaker will have to recall 362,000 Jettas and
New Beetles for brake-light failures.

-SAP’s CEO confirmed his company had held preliminary merger talks with
Microsoft, even though the talks never became formal and many clients preferred
to see the 2 companies remain separate (Les Echos).

- Deutsche Telekom may bid 25bln for BT Group (Times). The deal however is not
likely to go through as board members of the German company would be against it
(Telegraph).

- Repsol’s Chairman described his company’s presence in Latin America as “too
heavy” and the company will begin dispersing assets there and focus its growth
plans on other areas (El Pais).

- ABN Amro completed its E600m stock buyback program. The bank purchased 25.4m
shares at an average price of E23.24 a piece.

- Logitech International is targeting a 15% in revenue growth annually for the
next 4 years, excluding acquisitions, according to the group’s Chairman (NZZ am
Sonntag).

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