dealingfloor.com

** US MARKETS **
Dow 0,84%; Nasdaq 1,34%; S&P 1,14%; Soxx -0,44%; Russel2k 2,01%; DJAIG 0,95%;
10yr Bond 0,06%; 10yr Yield 5,06%; Crude future 71,58; Gold 652,96

| Energy 3,11%| Materials 2,09%| ConsStaples 1,03%| Technology 1%| ConsDisc
0,93%| Financials 0,91%| Utilities 0,91%| Healthcare 0,8%| Telecom 0,7%|
Industrials 0,68%

** US HEADLINES **
- U.S. Stocks Rise the Most in a Month on GDP Report; Exxon, U.S. Steel Gain
- Canadian Stocks Post Best Gain in Two Years; Oil, Raw-Material Shares Jump
- Ford to Pay 10.6 Percent Yield in Exchange, Company’s Highest Ever in U.S.
- Treasuries May Decline as Inflation, Growth Reports Point to Rate Increase
- Enron Jurors Say They Focused on Glisan Testimony to Convict Skilling, Lay
- Crude Oil Rises to More Than $71 After Talks With Iran End in a Stalemate
- Gold Rises for Second Day as Some Investors See Recent Decline as Overdone

** US: IN PLAY TODAY **
With the Feds focus centered on inflation and investors also concerned about
rising prices, today’s Personal Income &Spending data at 14:30 CET will provide
the market with an update on inflation with the core PCE deflator. Investors
will also get a revision to the University of Michigan Sentiment just after the
market opens at around 15:50 CET. There are no notable earnings report on the
calendar.

** ASIAN MARKETS **
Nikkei 1,58%; Kospi 2,03%; HSI 0,94%; Taiwan 0,26%; China 1,13%; India 3,5%;
Thailand 1,74%; Australia 1,29%

** ASIAN HEADLINES **
- Japan’s Consumer Prices Rise a Sixth Month, Boosting Case for Higher Rates
- Asian Stocks Set for Biggest Gains in Three Weeks; Sony, BHP Billiton Rise
- Billionaire Icahn, Lichtenstein Prepare Hostile Takeover for KT&G Corp.
- China Citic Hires Bankers for IPO in Hong Kong of as Much as $2 Billion
- South Korea Posts Biggest Account Deficit Since 1997 on Higher Oil Costs
- Singapore Plans to Announce Winning Bidder for First Casino-Resort Today
- Allianz Plans to Open More Branches in India and China, Asia Chief Says
- Akhtar Says Pakistan Will Keep Interest Rates Unchanged to Quell Inflation
- Babcock & Brown Increases EPS Growth Forecast to 35 Percent; Shares Surge
- Kolon Engineering, Korea Builders Gain on Land Development, Economy’s Gain
- 5% of China’s oil production is out as a typhoon shut down platforms.
- Yen Drops as Finance Minister Tanigaki Says Japan’s Deflation `Persists’

** EUROPEAN MARKETS **
S&P future -0,01%; Bund future 0,14%; Crude future 71,58; €/$ 1,27755; Gold
652,96

** EUROPE: IN PLAY TODAY **

- Arcelor SA agreed to buy a controlling stake in Russia’s OAO Severstal, in a
13 billion-euro ($16.6 billion) transaction that will create the world’s biggest
steelmaker and fend off a hostile bid from Mittal Steel Co.
Arcelor gets an 89.6 percent stake in Severstal, other steel
and mining assets and 1.25 billion euros in cash from billionaire
Alexei Mordashov, the Luxembourg-based company said in a
statement today. Mordashov gets 295 million new Arcelor shares at
44 euros apiece, for a total stake of 32.2 percent stake.

- Allianz Plans to Open More Branches in India and China, Asia Chief Says

- Eni SpA: Chief Executive Officer Paolo Scaroni said
the board of Europe’s fourth-largest oil company is unlikely to
discuss the idea of a merger with Italy’s biggest electricity
producer, Enel SpA.

- Porsche AG: The carmaker expects to sell as many
as 8,000 Panamera model cars in North America in the first 12
months after its introduction, Boersen-Zeitung said, citing Peter
Schwarzenbauer, head of the carmaker’s North American business.

- Santander Central Hispano SA: Spain’s biggest bank,
and Total SA, the French oil company, are in discussions
about ending a shareholder pact giving them joint control of
Spanish oil company Compania Espanola de Petroleos SA.

- Total SA: Europe’s third-largest oil company may
face “tough measures” from the Russian government over
violations discovered by the nation’s scientists in the
development of an oil field in the Arctic.

** UPS & DOWNS **
+ TELEKOM AUSTRIA RAISED TO `BUY’ FROM `HOLD’ AT DEUTSCHE BANK
+ TURKISH EQUITIES RAISED TO `OVERWEIGHT’ AT CREDIT SUISSE
+ GOLDMAN PRICE ESTIMATE RAISED 2.9% TO $180 AT UBS
+ NUTRECO RAISED TO `OUTPERFORM’ VS. `IN-LINE’ AT GOLDMAN
+ UNILEVER RAISED TO `BUY’ FROM `HOLD’ AT DEUTSCHE BANK
+ VEOLIA ADDED TO JPMORGAN’S `ANALYST FOCUS LIST’
+ ASML RAISED TO `BUY’ FROM `HOLD’ AT CITIGROUP

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** US MARKETS **
Dow -0,24%; Nasdaq -0,65%; S&P -0,43%; Soxx -1,62%; Russel2k -0,55%; DJAIG
2,78%; 10yr Bond 0,24%; 10yr Yield 5,02%; Crude future 71,08; Gold 664,38

| Materials 0,15%| Telecom 0,1%| ConsStaples 0,07%| Energy 0,01%| Industrials
-0,39%| Financials -0,46%| Healthcare -0,54%| ConsDisc -0,62%| Technology
-0,83%| Utilities -1,45%

** US: HEADLINES **
- Dollar Rises in Asia Amid Concern Bird Flu May Be Spread by Human Contact
- Microsoft Adds Traffic Data, Site Collections to Map Service for Customers
- Crude Oil Falls on Speculation U.S. Gasoline Supplies Increased Last Week
- Bond Strategists: UBS Says 10-Year Treasuries to Extend Gain on Fed Policy
- Canadian Stocks Fall as Banks Slide Before Expected Interest-Rate Increase
- Bear Stearns Strategist Trahan Cuts 2006 S&P 500 Forecast by 11 Percent

** US: IN PLAY TODAY **
I nvestors will have April Durable Orders at 14:30 CET and New Home Sales at
16:00 ET to sift through. Also garnering some attention will be the Energy
Dept.s weekly oil inventory report at 16:30 ET, especially with crude oil back
above $71 a barrel fueling concerns heading into the summer driving season.

On the earnings front, retailers from the likes of AutoZone (AZO) and Dollar
Tree (DLTR) to Payless Shoe (PSS) and Williams-Sonoma (WSM) make up the bulk of
reports. Notable names posting quarterly results after the close include Network
Appliance (NTAP), Petco (PETC) and TiVo (TIVO).

** ASIAN MARKETS **
Nikkei 1,87%; Kospi -0,15%; HSI -1,19%; Taiwan 0,48%; China -1,85%; India 0,55%;
Thailand -2%; Australia 0,5%

** ASIAN HEADLINES **
- Bank of China Raises $9.73 Billion in Biggest IPO for 6 Years, Bankers Say
- Asian Stocks Decline, Led by Samsung Electronics and Hon Hai; BHP Advances
- Packer and Melco Plan $1 Billion Initial Public Offering for Macau Casino
- China’s Fuel-Price Increase Won’t Stem Oil Refining Losses, Sinopec Says
- Asian Currencies Fall as Indonesia Bird-Flu Probe Adds to Pandemic Concern
- ITC Fourth-Quarter Profit May Rise 33 Percent on Cigarette Sales, Hotels
- Bank of Japan Member Says Reserve Cut May Spur Interest Rate Speculation
- Pakistan Trade Deficit to Widen to `Around’ $10.5 Billion, Minister Says
- Copper in Shanghai Surges 4 Percent on Speculation Demand Exceeds Supply
- BHP, Rio Tinto Lead Rebound in Australian Stocks on Metal Price Increases

** EUROPEAN MARKETS **
S&P future 0,18%; Bund future 0,22%; Crude future 71,08; €/$ 1,2782; Gold 664,38

** EUROPE: IN PLAY TODAY **

- IFO Indicator is released in Germany at 10:00 CET

- BNP Paribas SA: Chief Executive Officer Baudouin
Prot said the return on equity at France’s largest bank by
market value is “very satisfying.” BNP Paribas reported on May
19 that its return on equity, a measure of profitability for
banks, was 20 percent for the first quarter.

- Buhrmann NV): The world’s biggest office-supplies
distributor agreed to buy Coastwide Laboratories Inc. for an
undisclosed price to expand its Corporate Express unit in the
U.S.

- Norsk Hydro ASA: Norway’s second-biggest oil
company and India’ ONGC Videsh Ltd. will get a combined 60
percent stake of Repsol YPF SA’s (REP SM) exploration rights at
six offshore blocks in Cuba. Repsol, Spain’s biggest oil
producer, will trim its holding in the project to 40 percent,
the Madrid-based company said after markets closed yesterday.

- OAO Lukoil: Russia’s biggest oil producer said
fiscal fourth-quarter net income rose 33 percent from a year
earlier to $1.6 billion, as it pumped more oil and the price of
crude climbed to records. That beat the $1.5 billion median
estimate of nine analysts surveyed by Bloomberg News.

- OMV AG and Verbund: The two Austrian
energy companies that announced plans to merge in a 13.1
billion-euro accord earlier this month, scrapped the deal
because of mounting political opposition, the government said.

- Vodafone Group Plc: The world’s biggest mobile
phone company may be active. Verizon Communications Inc., the No. 2 U.S.
telephone company, won’t be buying Vodafone Group’s stake in Verizon Wireless
anytime soon, Chief Financial Officer Doreen Toben said yesterday.

- Ahold reported 1Q sales of EU14.1 billion, analysts estimate EU14 billion.
Ahold said US sales hurt as energy costs impact consumers.

- Earnings reports of note: EDP-Energias de Portugal, GUS, Kelda, Omega Pharma,
Opap, Renewable Energy Corp, Scottish Power.

** EUROPE: UPS & DOWNS **
+ REPSOL RAISED TO `OVERWEIGHT’ AT MORGAN STANLEY
+ LOGITECH RAISED TO `BUY’ FROM `NEUTRAL’ AT UBS
+ OMV RAISED TO `HOLD’ FROM `SELL’ AT CITIGROUP
+ TNT PRICE ESTIMATE RAISED 13% TO EU34 AT CREDIT SUISSE
+ VEDIOR RAISED TO `OUTPERFORM’ VS `NEUTRAL’ AT CREDIT SUISSE

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** US MARKETS **
Dow -0,17%; Nasdaq -0,96%; S&P -0,39%; Soxx -4,19%; Russel2k -1,01%; DJAIG
0,87%; 10yr Bond 0,03%; 10yr Yield 5,03%; Crude future 70,22; Gold 653

| Utilities 0,82%| ConsStaples 0,24%| Industrials -0,19%| Financials -0,24%|
Energy -0,38%| Healthcare -0,45%| Technology -0,7%| ConsDisc -0,8%| Telecom
-0,82%| Materials -1,91%

** US HEADLINES **
- Deutsche Boerse Offers $11.1 Billion for Euronext Exchange, Tops NYSE Bid
- Hellman & Friedman May Buy London-Based Gartmore Investment, People Say
- Fannie Mae’s Federal Regulator to Censure Company Directors, People Say
- Ford Credit to Pay Highest-Ever Bond Yields to Conserve Cash in Debt Swap
- U.S. Notes May Advance as Investors Seek Safety on Worldwide Stocks Slump
- Dollar May Advance on Speculation Traders Are Seeking Safety of Treasuries
- Google, Seeking to Lure Brand Advertisers, Will Sell Video Advertisments

** US: IN PLAY TODAY **
Even in the absence of notable economic data, investors will
remain focused on any and all inflation indicators to set the tone of trading
for the day. On the earnings front, Toll Brothers (TOL) and Tech Data (TECD) are
among the biggest names reporting before the bell while Medtronic (MDT) and
Computer Sciences (CSC) head a limited list of names posting quarterly results
after the close.

** ASIAN MARKETS **
Nikkei -1,34%; Kospi -0,87%; HSI -0,04%; Taiwan -1,36%; China -0,68%; India
0,42%; Thailand -0,29%; Australia -0,25%

** ASIAN HEADLINES **
- Asian Stocks Fall to Two-Month Low on Rate Concern; Canon, Hyundai Slide
- Mitsubishi UFJ Shares Fall on Forecast Profit to Slip 37 Percent This Year
- Toyota Says It Plans to Start Making Camry Sedans in China to Raise Sales
- Indian Stocks, Still Expensive, May Extend Three-Day, 14 Percent Plunge
- Coles Myer Plans $750 Million Share Buyback to Boost Returns; Stock Rises
- China Social Welfare Fund Completes Its $1.3 Billion Investment in ICBC
- Australian Uranium-Explorer Shares May Face Meltdown After Initial Offers
- Unilever Indonesia to Buy Makers of Vanilla Tea, Food, Finance Chief Says

Markets across the region are still weak following yesterday’s slide, but the
underlying tone does not seem as negative. Although broader markets were down,
it looks as we are seeing some signs of bargain hunting/short covering,
particularly in oils and commodities.

BBG Pan Asia/Pacific -0.3%
BBG Pan Asian Sectors BBG Pan Asian top/bottom 15
Pharm + 2.3% CHINA PETROL + 4.0% RESONA HOLDI -4.0%
Oil servs + 1.3% CHINA PETROL + 3.9% TELECOM NEW -4.1%
Oil&Gas Pr + 1.2% EISAI CO LTD + 3.7% PUBLISHING & -4.1%
Telecoms + 0.5% COLES MYER L + 3.0% POSCO -4.3%
Semis + 0.5% RAKUTEN INC + 2.6% SMC CORP -4.9%
Airlines -0.2% SHIZUOKA BAN + 2.4% MATSUS ELEC -5.0%
Financials -0.9% INDIAN OIL C + 2.2% MITSUBISHI U -5.5%
Computers -1.0% WIPRO LTD + 2.2% KEYENCE CORP -6.1%
Banks -1.2% MALAYAN BANK + 1.9% SOMPO JAPAN -6.4%

** EUROPEAN MARKETS **
S&P future 0,24%; Bund future 0,45%; Crude future 70,22; €/$ 1,28625; Gold 653

** EUROPE: IN PLAY TODAY **
- Cap Gemini SA : Societe Generale, France’s
third-biggest lender, increased its stake in Europe’s largest
computer-services company to about 7.7 percent, overtaking
Chairman Serge Kampf as the company’s biggest shareholder.

- Dexia SA: The world’s biggest lender to local
government is scheduled to release first-quarter results at 3
p.m. Brussels time.

- Societe Television Francaise 1: The owner of
France’s most-watched television channel said first-quarter
earnings rose 22 percent from a year earlier to 74.5 million
euros as pay-TV venture Television par Satellite had a profit.
That beat the median estimate of 65.5 million euros from six
analysts surveyed by Bloomberg News.

- STMicroelectronics NV: Europe’s top semiconductor
maker is scheduled to hold its annual investors’ day in London.

- Deutsche Boerse AG bid 8.62 billion euros ($11.1 billion) in cash and shares
for Euronext NV, topping a rival offer by NYSE Group Inc. as it seeks to create
Europe’s biggest stock market and expand in derivatives.
The offer for Paris-based Euronext, operator of four European stock exchanges,
values the company at 76.6 euros a share. The bid tops a 71 euro offer made
yesterday by the New York Stock Exchange, and is 13 percent higher than
yesterday’s closing price for Euronext.

- Royal Philips Electronics NV agreed to buy the U.K.’s Avent Holdings Ltd. for
460 million pounds ($868 million) to add baby soothers and bottle warmers to the
appliances division.

- BP Plc, the world’s third-biggest maker of solar cells, expects Asian sales to
accelerate as 1 billion people seek access to electricity and developed nations
such as Japan target lower fuel imports.
Sales in the Asian market may grow 50 percent a year by
2016, from a maximum of 30 percent now, driven by increased
demand in China, South Korea and Japan, Mark Twidell, BP Solar’s
director for Asia, said without giving a value estimate. BP
expects global solar manufacturing revenue to double by 2008
from almost $500 million in 2005.

** EUROPE: UPS & DOWNS **
+ CREDIT SUISSE RAISES EUROPEAN DRUG STOCKS TO `BENCHMARK’
+ ZURICH FINANCIAL RAISED TO `BUY’ FROM `HOLD’ AT ING
+ LAND SECURITIES RAISED TO `BUY’ FROM `NEUTRAL’ AT MERRILL
+ ASML RAISED TO `NEUTRAL’ FROM `SELL’ AT MERRILL LYNCH
+ PORSCHE RAISED TO `OVERWEIGHT’ AT MORGAN STANLEY
+ RANDSTAD RAISED TO `BUY’ FROM `NEUTRAL’ AT UBS
+ OUTOKUMPU RAISED TO `NEUTRAL’ FROM `REDUCE’ AT UBS

- CREDIT SUISSE LOWERS EUROPEAN AUTO STOCKS TO `BENCHMARK’
- CREDIT SUISSE CUTS EUROPE CAPITAL GOODS STOCKS TO `BENCHMARK’

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** US MARKETS **
Dow 0,14%; Nasdaq 0,62%; S&P 0,41%; Soxx 3,22%; Russel2k 0,57%; DJAIG -2,27%;
10yr Bond 0,06%; 10yr Yield 5,06%; Crude future 68,53; Gold 657,6

| Telecom 1,35%| Utilities 0,85%| ConsDisc 0,76%| Energy 0,66%| Technology
0,58%| Industrials 0,46%| Financials 0,45%| Materials 0,29%| ConsStaples 0,06%|
Healthcare -0,43%

** US HEADLINES **
- NYSE to Submit $21 Billion Euronext Merger Proposal Today, Telegraph Says
- Bush Bond Market Favors Companies, Homeowners; Clinton Rewarded Traders
- Dollar Posts Gain Against Euro on Speculation of Increase in Interest Rate
- U.S. Stocks Rebound, Trimming Worst 2-Week Drop Since 2003; Goldman Gains
- Sony’s `Da Vinci Code’ Makes $77 Million in Debut, Exceeding Estimates
- Commodities, Led by Metals, Post Their Biggest Weekly Decline in 25 Years
- Crude Oil Drops After Iran Signals More Access for UN Nuclear Inspectors

** US: IN PLAY TODAY **
Today’s macro calendar is empty and only two notable names are reporting
earnings: Lowe’s Cos (LOW) and Campbell Soup (CPB).

** ASIAN MARKETS **
Nikkei -1,71%; Kospi -2,37%; HSI -1,16%; Taiwan -1,92%; China 0,33%; India
-4,48%; Thailand -2%; Australia -1,49%

** ASIAN HEADLINES **
- Asian Stocks Fall; PetroChina, BHP Billiton Fall on Cheaper Oil, Metals
- Yen May Advance as Japanese Growth, Inflation Push Interest Rates Higher
- China May Raise Banks’ Reserve Ratio as Part of Effort to Curb Loan Growth
- Jollibee Says China Expansion Is Held Back by Higher Rents and Redesign
- State Bank of India to Raise $400 Million in Debt Sale to Expand Overseas
- Mitsubishi UFJ, Mizuho to Post Fourth-Quarter Profit as Bad Loans Decline
- Thailand Posts Biggest Trade Deficit in 10 Months on Costlier Oil Imports
- Hong Kong’s Economic Growth Probably Accelerated in First Quarter on Trade
- Japan Stocks May Trail Asia as Commodity Costs, Stronger Yen Hurt Profit

** EUROPEAN MARKETS **
S&P future -0,01%; Bund future 0,21%; Crude future 68,1; €/$ 1,2724; Gold 644,2

** EUROPE: IN PLAY TODAY **
- DaimlerChrysler AG: The carmaker may face a $640
million fine to settle a U.S. government investigation of alleged
bribery, the magazine Der Spiegel said, citing unidentified
people at the company.

- Xstrata Plc: The company’s hostile C$16.1 billion
($14.3 billion) for Falconbridge Ltd. “undervalues” the
Canadian miner, whose profit is soaring on higher metal prices,
Falconbridge Chief Executive Officer Derek Pannell said.

- NYSE Group Inc. is close to making a bid to merge with Euronext NV, Europe’s
second-largest stock exchange, to create a transatlantic securities market,
three people with direct knowledge of the situation said.Just now NYSE announced
its offer to buy Euronext for 0.98 new shares and EUR 21.32 in cash.

- Credit Agricole SA is considering making a bid for Alliance & Leicester Plc,
the U.K.’s eighth- largest bank, French daily Le Figaro reported, without citing
anyone.

** EUROPE: UPS & DOWNS **
+ LUKOIL RAISED TO `BUY’ FROM `HOLD’ AT CITIGROUP
+ QIAGEN PRICE EST. RAISED TO $16.25 VS $14.90 AT MORGAN STANLEY
+ ERSTE RAISED TO `OVERWEIGHT’ FROM `NEUTRAL’ AT HSBC
+ BNP PRICE ESTIMATE RAISED TO EU88 FROM EU83 AT CITIGROUP

- BELGACOM PRICE ESTIMATE CUT TO EU27 FROM EU28 AT HSBC
- ZURICH FINANCIAL PRICE EST. CUT TO SF330 VS SF345 AT CITIGROUP
- SABMILLER PRICE EST. CUT TO 1,130P FROM 1,220P AT UBS

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** US MARKETS **
Dow -0,69%; Nasdaq -0,7%; S&P -0,67%; Soxx -0,89%; Russel2k -1,02%; DJAIG
-0,49%; 10yr Bond 0,06%; 10yr Yield 5,06%; Crude future 69,78; Gold 684,94

| Utilities 0,15%| ConsDisc -0,09%| Telecom -0,36%| Healthcare -0,47%|
Technology -0,52%| ConsStaples -0,56%| Financials -0,84%| Materials -1,09%|
Industrials -1,1%| Energy -1,22%

** US HEADLINES **
- Kohn May Strengthen Fed’s Credibility as Investors Fear Faster Inflation
- U.S. House Approves Plan to Recover $10 Billion From Exxon, Oil Producers
- Legg Mason, Teva, Federated Remind Investors Deals Are Hard to Make Work
- Dell’s Decision to Use Chips From Advanced Micro Devices Is Blow to Intel
- Dollar Is Heading for Weekly Advance as Fed May Keep Raising Interest Rate
- Treasuries Set for Winning Week on Speculation Fed Not Yet Done With Rates
- Crude Oil May Fall on Signs U.S. Gasoline Supply Sufficient to Meet Demand
- Texans End Love Affair With Pickup Trucks, SUVs After Gasoline Prices Jump

** US AFTER HOURS **
- Dell (+3%) reported Q1 earnings of $0.33 per share, in line with the
Reuters Estimates consensus of $0.33. Total revenues rose 6.2% year/year to
$14.22 bln vs. the $14.21 bln consensus. Co reports Q1 gross margin of 17.4% vs.
17.6% street expectation. Co also announced it will introduce new AMD Opteron
processors in multi-processor servers by year end (AMD + 12.8% after hours).
Management said it will no longer offer specific earnings or revenue guidance,
but sees Q2 results “similar” to Q1. Reuters Q2 consensus for EPS and revs is
$0.34 and $14.36 bln,

** ASIAN MARKETS **
Nikkei 0,42%; Kospi 0,41%; HSI 0,32%; Taiwan 0,57%; China 2,3%; India 0,31%;
Thailand -0,22%; Australia -0,15%

** ASIAN HEADLINES **
- Japan Economy Grows at Faster-Than-Expected 1.9 Percent Pace on Investment
- Asian Stocks Head for Biggest Weekly Decline in a Year on U.S. Inflation
- Bank of Japan Keeps Interest Rates Close to Zero Percent; Choice Unanimous
- Indonesia Debt Rating Raised by Moody’s on Government Finance Improvement
- India May Pay General Electric, Suppliers $40 Billion for Nuclear Reactors
- PetroChina May Benefit as Higher Natural Gas Sales, Prices Increase Profit
- Hyundai, Kia Will Boost Hedging to Protect Currency Losses as Won Rallies
- Alumina’s Chief Marlay Expects Profit to Double as Disruptions Hurt Supply
- Henry Sy Builds His Biggest Philippines Mall, Betting Tourists Will Come
- Ping An, China Life Shares Climb as Developing Middle Class Buys Insurance

** EUROPEAN MARKETS **
S&P future 0,29%; Bund future 0,16%; Crude future 69,78; €/$ 1,28295; Gold
684,94

** IN PLAY TODAY **

- German Producer Prices Rise 6.1 Percent, Biggest Advance Since June 1982

- British Airways Plc, Europe’s third- largest airline, said fourth-quarter
profit surged on increased business passenger travel from London’s Heathrow
airport. Net income increased to 80 million pounds ($151 million), or 7
pence a share, in the three months ended March 31 from 1 million
pounds, or 0.1 pence, a year earlier, the London-based company said
in a statement today. Profit beat the 11 million-pound median
estimate of eight analysts surveyed by Bloomberg.

- BNP Paribas SA, France’s largest bank by market value, said first-quarter
profit rose 17 percent after revenue from investment banking increased and
acquisitions in the U.S. lifted earnings from consumer lending abroad.
Net income advanced to 2.01 billion euros ($2.58 billion) from
1.72 billion euros in the same period a year earlier, the Paris-
based said in an e-mailed statement today. Profit beat the 1.62
billion-euro median estimate of 11 analysts surveyed by Bloomberg.
Revenue rose 22 percent to 6.82 billion euros, slower than costs.

- Associated British Foods Offers to Buy Illovo Sugar for $560 Million

- Rio May Win 15 Percent Price Gain for Lump Iron Ore, Credit Suisse Says

- SAP AG: Co-founder and supervisory board chairman
Hasso Plattner is willing to consider any merger or buyout offers
for the world’s largest maker of business management software,
Financial Times Deutschland reported. Potential buyers include
International Business Machines Corp., Microsoft Corp. and Google
Inc., Plattner said in an interview with the newspaper.

** EUROPE: UPS & DOWNS **

+ ABB RAISED TO `OVERWEIGHT’ FROM `NEUTRAL’ AT JPMORGAN
+ SOCIETE GENERALE RAISED TO `BUY’ FROM `HOLD’ AT DEUTSCHE
+ BT GROUP PRICE ESTIMATE RAISED TO 280P FROM 235P AT LEHMAN
+ LOGICACMG PRICE EST. RAISED TO 180P VS 170P AT MORGAN STANLEY
+ BAE SYSTEMS RAISED TO `BUY’ FROM `NEUTRAL’ AT MERRILL LYNCH
+ DEUTSCHE BOERSE RAISED TO `BUY’ AT UBS
+ THYSSENKRUPP PRICE ESTIMATE RAISED TO EU34 FROM EU30 AT UBS
+ STATOIL RAISED TO `EQUAL-WEIGHT’ FROM `UNDERWEIGHT’ AT LEHMAN
+ BP RAISED TO `EQUAL-WEIGHT’ FROM `UNDERWEIGHT’ AT LEHMAN
+ HENKEL RAISED TO `OVERWEIGHT’ FROM `NEUTRAL’ AT HSBC :HEN3 GY
+ FORTIS RAISED TO `BUY’ FROM `NEUTRAL’ AT MERRILL LYNCH
+ HVB PRICE ESTIMATE RAISED 76% TO EU36 AT JPMORGAN

- MAN AG LOWERED TO `NEUTRAL’ FROM `OVERWEIGHT’ AT HSBC
- ZURICH FINANCIAL PRICE EST. CUT TO SF315 FROM SF345 AT UBS
- SABMILLER PRICE ESTIMATE CUT TO 1060P FROM 1090P AT LEHMAN

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** EUROPEAN MARKETS **
S&P future 0,41%; Bund future 0,15%; Crude future 68,37; €/$ 1,27535; Gold
680,91

** IN PLAY TODAY **

-French bank Societe Generale SA said Thursday that improving
financial markets helped lift first-quarter net profit 20% from a year ago.
Net profit rose to EUR1.47 billion during the period from EUR1.23 billion,
while revenue increased to EUR5.78 billion from EUR4.75 billion. Both sets of
figures were better than expected. Analysts polled by Dow Jones Newswires gave
an average net profit forecast of EUR1.24 billion, and put revenue at EUR5.26
billion. SocGen said financial conditions were very favorable in the
first-quarter, which was characterized by strong economic growth in the U.S. and
a recovery in Europe.

-Belgian-Dutch financial services group Fortis NV Thursday reported a
smaller-than-expected drop in first-quarter net profit amid strong results at
its banking division. Fortis, based in both Brussels and Utrecht, said
first-quarter net profit fell to EUR1.33 billion. That compared with EUR1.51
billion a year earlier when the figure was flattered by EUR443 million in gains.
The profit for the latest quarter exceeded analysts’ forecasts of around
EUR1.01 billion.

- BT Group Plc, the U.K.’s biggest phone company, said fiscal fourth-quarter
profit fell 11 percent as demand for fixed-line voice services waned.
Net income in the three months to March 31 fell to 391 million pounds ($737
million), or 4.6 pence a share, from 440 million pounds, or 5.1 pence, a year
earlier, London-based BT said in a statement today. Sales in the quarter climbed
6.5 percent to 5.13 billion pounds from a restated year-earlier figure, helped
by broadband sales and acquisitions. Analysts had expected net income of 414
million pounds on sales of 5.11 billion pounds in the quarter, according to the
median estimates of six analysts surveyed by Bloomberg News.

- Zurich Financial Services AG said first-quarter profit rose,
helped by a reorganization in its U.K. life business.
Net income increased to $785 million, or 6.88 Swiss francs,
from $779 million, or 6.19 francs, a year earlier, the Zurich-based
company said in a statement. Profit surpassed the $726 million
median estimate of nine analysts surveyed by Bloomberg News.
Operating profit rose to $1.34 billion from $1.03 billion.

- Eni SpA said it was raided by European Union regulators in a probe into
whether commercial policies at some gas companies on the continent are
competitive, the Rome-based company said in a statement as markets were closing

- Air France-KLM Group said fourth-quarter profit fell 30 percent as oil costs
surged. Net income fell to 7 million euros ($8.9 million) from a
restated 10 million euros a year earlier, said Chief Financial
Officer Philippe Calavia today. Profit lagged the median estimate
of 154 million euros by seven analysts surveyed by Bloomberg. Sales
rose 13 percent to 5.2 billion euros.

- Other earnings report of note today: Lanxess, Portugal Telecom and Technip.

** UPS & DOWNS **
+ VIVENDI PRICE ESTIMATE RAISED TO EU33.5 FROM EU32.5 AT UBS
+ BRITISH LAND PRICE ESTIMATE RAISED TO 1500P FROM 1450P AT UBS
+ HSBC SHARES INCREASED TO `EQUAL WEIGHT’ AT MORGAN STANLEY
+ RBOS RAISED TO `HOLD’ FROM `SELL’ AT ABN AMRO
+ DEUTSCHE POST RAISED TO `OVERWEIGHT’ AT HSBC
+ SOLARWORLD RAISED TO `BUY’ FROM `HOLD’ AT CITIGROUP
+ VINCI PRICE EST. RAISED TO EU96.3 VS EU89.05 AT MORGAN STANLEY

- CREDIT AGRICOLE LOWERED TO `HOLD’ FROM `BUY’ AT DEUTSCHE BANK

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** US MARKETS **
Dow -1,88%; Nasdaq -1,5%; S&P -1,68%; Soxx -1,15%; Russel2k -1,58%; DJAIG
-0,77%; 10yr Bond 0%; 10yr Yield 5,15%; Crude future 68,37; Gold 680,91

| Technology -1,05%| Healthcare -1,11%| ConsStaples -1,12%| ConsDisc -1,32%|
Utilities -1,73%| Financials -2,01%| Industrials -2,02%| Telecom -2,33%| Energy
-2,63%| Materials -2,66%

** US HEADLINES **
- U.S. Stocks Slide the Most Since January on Propsect Fed Will Raise Rates
- Canadian Stocks Drop for a Sixth Straight Day, Led by Commodities Shares
- Burger King Raises $425 Million in Public Offering of U.S. Fast-Food Chain
- Harvard’s Endowment Raises Infosys Stake to Biggest Overseas Stockholding
- Treasuries May Decline for Second Day as Traders Bet Fed Will Raise Rates

** US AFTER HOURS **
Companies reporting after hours include Intuit (INTU unch), Gymboree (GYMB,
+0.5%), BEA Systems (BEAS, +3%) and Petsmart (PETM, unch).

** IN PLAY TODAY **
On the economic front initial claims will kick things off at 14:30 CET
while the April Leading Indicators report is scheduled for 16:00 CET. Closing
out an important week of economic data at 18:00 CET with the latest read on
regional manufacturing will be The Philadelphia Fed Index.

With regard to the diminishing number of companies left on the earnings
calendar, Advance Auto Parts (AAP), Barnes &Noble (BKS), and Sears Holdings
(SHLD) are scheduled to report before the bell. After the close, Dell (DELL)
will be the headliner followed by reports from Aeropostale (ARO), Autodesk
(ADSK), Cost Plus (CPWM), Nordstrom (JWN) and Marvell Technology Group (MRVL).

** ASIAN MARKETS **
Nikkei -1,28%; Kospi -2,65%; HSI -2%; Taiwan -1,16%; China -1,28%; India -4,67%;
Thailand -2,26%; Australia -1,7%

** ASIAN HEADLINES **
- Asian Stocks Decline Most in a Year on U.S. Inflation; Sony, Samsung Drop
- China Ends a Yearlong Ban on IPOs, Testing World’s Best-Performing Market
- Bank of China Share Sale Brings Out the Gambler in Hong Kong Investors
- Global Copper Consumers Seek More Talks With LME on Price Rally, Trading
- Microsoft, Chunghwa Telecom to Develop Joint Telephone Operating System
- Mandelson Says European Union-Asean Trade Agreement Is Possible By 2009
- South Korea Plans to Relax Rules on Investment to Help Curb Currency Gains

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** EUROPEAN MARKETS **
S&P future 0,06%; Bund future -0,04%; Crude future 69,6; €/$ 1,287525; Gold
703,4

** IN PLAY TODAY **

- Credit Agricole posted a 53% rise in 1Q net income to E1.39bln (E1.09bln
expected). 1Q assets under management rose by 37.7% to E593bln (net income for
the division up 30.1% to E377m). Securities unit Calyon posted a 59% surge in
net income to E479m.

- Compagnie Generale de Geophysique, Eutelsat Communications will be added to
the Stoxx 600 Index on June 19, Havas will be removed.

- Mittal Steel was granted approval by regulators in four different countries
for its plan to purchase rival Arcelor.

- Vivendi posted 1Q net income of E707m (E560m expected) due to a rise in
customer numbers at its mobile phone unit. Ex-item profit came in at E592m
(E568m expected). The group announced that the board rejected any calls to split
the company. Average growth from operations expected in range of 8% to 10%
annually.

- Alstom reported FY net income of E178m (E192m expected, net loss of E628m last
year), the 1st annual profit since 2001 after sales rose and over 11,500 job
cuts. The company plans to make “selective acquisitions” in 2007/08.

- Telekom Austria reported a 39% rise in 1Q profit to E154m (E145m expected) on
revenue up 16% to E1.16bln. Wireless sales rose by 31% to E688m. The company
confirmed its FY targets, FY net and operating profit expected to rise by 20%
while FY sales expected to rise by 5%.

- Xstrata offered to buy Falconbridge for C$20bln, or C$52.50 a share, topping
Inco’s offer of C$51.17 per share. The group would pay C$16.1bln for all the
shares it doesn’t already own, as it currently holds 19.8% of the company.

- Berkshire Hathaway purchased 57.6m shares of Tesco for $328.7m according to a
regulatory filling.

- J Sainsbury expected to report a surge in 2H net income from the 9/1638m
reported last year as the food retailer increased sales and market share by
slashing prices on key items.

- Gamesa Corporacion Tecnologica posted a severe drop in 1Q net income to E25m
from E54.4m reported same time last year.

- Hagemeyer will be added to the Stoxx 600 Index on June 19, while Oce will be
removed.

- Novartis’ two experimental heart drugs Rasilez and Exforge lowered blood
pressure in two separate medical studies.

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** US MARKETS **
Dow -0,08%; Nasdaq -0,42%; S&P -0,19%; Soxx -0,56%; Russel2k -0,02%; DJAIG
0,64%; 10yr Bond 0%; 10yr Yield 5,11%; Crude future 69,6; Gold 703,4

| Healthcare 0,38%| ConsStaples 0,3%| Energy 0,25%| Telecom 0,06%| Industrials
-0,02%| Financials -0,12%| Materials -0,2%| Utilities -0,41%| ConsDisc -0,79%|
Technology -1,04%

** US HEADLINES **
- Bernanke Embraces Greenspan Legacy of Opposition to Hedge-Fund Regulation
- General Electric Exceeds Its Own $20 Billion `Environmental’ Product Goals
- Treasuries May Rise as Consumer Prices Report to Support Rate Pause by Fed
- Dollar Drops Against Yen as Government Report May Show Inflation in Check
- Gold Surges Above $700 an Ounce as Funds Seek Hedge Against Weaker Dollar
- 0il Trades Below $70 as EU Prepares Plan to Resolve Iran Nuclear Dispute

** US AFTER HOURS **
- Hewlett-Packard (+3.5% after hours) posted 2Q/Apr EPS $0.54 ex-item ($0.49
expected) on revenue up 5% YoY to $22.6bln ($22.6bln). HP expects that 3Q
revenue will be approximately $21.75bln and FY revenue $91bln (inline with
consensus). 3Q EPS ex-item is seen at $0.45-0.48, FY EPS should reach
$2.04-2.08.

- Applied Materials (-3.3% after hours) announced 2Q/Apr EPS of $0.26, 3 cents
higher than the consensus, on sales up 20.8% YoY to $2.25bln. Expects 3Q sales
and orders to rise 5-10% from 2Q, EPS should reach $0.28-0.30.

** IN PLAY TODAY **
All eyes will be on the April CPI report (14:30 CET), which will provide
investors with the latest read on inflation at the consumer level. The EIAs
weekly oil inventories report at 16:30 ET should also garner some attention,
especially with the beginning of the summer driving season less than two weeks
away.

On the earnings front, retailers top the list again before the bell. Notable
names include Ross Stores (ROST), Talbots (TLB) and Zale (ZLC). After the close,
BEA Systems (BEAS), Foot Locker (FL), Intuit (INTU), Longs Drug (LDG), PETsMART
(PETM), and Gymboree (GYMB) are among the more recognizable companies reporting
quarterly results.

** ASIAN MARKETS **
Nikkei 0,92%; Kospi 1,39%; HSI 0,57%; Taiwan 0,66%; China 0,74%; India 1,88%;
Thailand -0,23%; Australia -0,03%

** ASIAN HEADLINES **
- Singapore Raises 2006 Growth Forecast After Economy Expands by 6.8 Percent
- Asian Stocks Snap Six-Day Losing Streak; Canon, Hyundai Motor Lead Advance
- China’s Steelmakers Say ThyssenKrupp’s Price Agreement Won’t Set Benchmark
- Honda Plans to Spend $1.46 Billion to Expand in North America and Japan
- China’s Factory Production Growth Eases as Output of Cars and Cement Slows
- Investment in China Property, Roads, Factories Probably Rose 29.1 Percent
- Philippines Posts Biggest Budget Surplus in Nine Years as Spending Trimmed
- SINGAPORE’S 1Q GDP EXPANDS AT ANNUAL 6.8% PACE
- CHINA APRIL INDUSTRIAL OUTPUT RISES 16.6% FROM YEAR AGO

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** HEADLINES **
- German Investor Confidence May Have Fallen for Fourth Month as Oil Soared
- Dollar Slides on Concern Central Banks Are Reducing Holdings of Currency
- Metal Rally May Resume as Sell-Off Fails to Dissuade Investors, Producers
- U.K. House Prices Increased for a Sixth Month in April, RICS Survey Shows
- Crude Oil Posts Biggest Three-Day Drop Since February as Demand May Slow

** IN PLAY TODAY **
- ZEW is due to be released at 11:00 CET (estimate 60);

- European Aeronautic, Defence & Space Co., the parent of planemaker Airbus,
said first-quarter earnings rose a greater-than-expected 26 percent and
predicted higher full- year profit on increased aircraft deliveries.
Net income climbed to 516 million euros ($661 million), or 65
cents a share, from 410 million euros, or 52 cents, a year earlier,
the company said in a statement today. The profit beat analysts’
median estimate of 426 million euros. Sales climbed 30 percent to
9.1 billion euros.

- NYSE Group Inc., which owns the New York Stock Exchange, and Euronext NV, the
owner of five European securities exchanges, may merge to form a company with a
primary listing in the U.S., the Wall Street Journal reported, citing
unidentified people familiar with the matter.

- Vestas Wind Systems A/S, The world’s largest wind-
turbine maker may report a first-quarter pretax loss of 9.8
million kroner, according to a survey of analysts by SME Direkt.
A figure for the year earlier period wasn’t given.

- Deutsche Post AG, Europe’s largest postal service
plans to release first-quarter results. The company will probably
report an 11 percent increase in profit, according to analysts.

- Following the oil slide over the past few days, airliners and chemicals
companies may be among those who benefit as they are among the most sensitive
companies to energy cost.

** UPS & DOWNS **
+ ADECCO RAISED TO `BUY’ FROM `HOLD’ AT CITIGROUP
+ HOCHTIEF RAISED TO `BUY’ FROM `NEUTRAL’ AT UBS
+ XSTRATA PRICE EST. RAISED TO 3000P FROM 2200P AT CITIGROUP
+ RIO TINTO PRICE EST. RAISED TO 4200P VS 3400P AT CITIGROUP
+ BNP PRICE ESTIMATE RAISED TO EU83 FROM EU80 AT CITIGROUP
+ BHP PRICE ESTIMATE RAISED TO 1540P FROM 1200P AT CITIGROUP
+ ANGLO AMERICAN PRICE EST. RAISED 20% TO 3000P AT CITIGROUP
+ AEGON PRICE EST. RAISED TO EU15 FROM EU13.2 AT CREDIT SUISSE

- RWE PRICE ESTIMATE CUT TO EU71 FROM EU76 AT HSBC
- TARGET CUT TO `NEUTRAL’ FROM `BUY’ AT MERRILL LYNCH
- BELGACOM PRICE EST. CUT TO EU27 FROM EU29 AT CREDIT SUISSE

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