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Mid-Day Update: Stocks Higher as Investors Focus on Positive Employment, Manufacturing Reports

Here's where markets stand at mid-day:

-NYSE up 25.38 (+0.33%) to 7,824.21

-DJIA up 34.29 (+0.30%) to 11,491.76

-S&P 500 up 5.97 (+0.48%) to 1,241.22

-Nasdaq up 18.25 (+0.7%) to 2,635.38

GLOBAL SENTIMENT

Hang Seng down 1.33%

Nikkei up 0.01%

FTSE down 0.02%

MID-DAY NYSE INDEX WATCH

NYSE Energy down 0.03% at 12,078.17

NYSE Financial up 0.51% at 4,869.96

NYSE Health Care up 0.08% at 6,524.81

NYSE Arca Tech 100 up 0.75% at 1,085.20

UPSIDE MOVERS

(+) BAC (+2.6%) gaining on report of loan settlement; downgraded.

(+) DSCO (+12%) secures fast track for SBIR grant to develop Aerosolized KL4 Surfacant.

(+) MGM (+4.1%) among early actives.

(+) NVAX (+0.8%) gets FDA OK to launch Phase 1 RSV vaccine trial.

(+) FDX (+1.9%) disappoints with results, guidance.

DOWNSIDE MOVERS

(-) ARYX (-35.9%) warns on dwindling cash.

MARKET DIRECTION

Stocks have bounced out of the red and are logging moderate gains at mid-day as investors seem to shrug off disappointing results from FedEx ( FDX ) and a decline in housing permits to focus on encouraging signs on the employment and manufacturing front.

Housing starts rose 3.9% to a seasonally adjusted annualized rate of 555,000 in November, the Commerce Department reported. However, that was 5.8% below the year-earlier period. The November rate matched forecasts from analysts polled by MarketWatch. Housing starts for October were revised higher to a rate of 534,000 from a prior estimate of 519,000. Permits for new construction fell 4% to an annualized rate of 530,000 in November, marking the lowest level since April 2009.

Initial jobless benefits claims fell 3,000 to a seasonally adjusted 420,000 last week, marking the third decline in the past four weeks, and surprising the majority of economists, who were looking for a small rise. The four-week average of new claims also fell, down 5,250 to 422,750. This is the lowest level since the week ended Aug. 2, 2008.

Also this morning, the Philadelphia Fed's manufacturing survey unexpectedly improved in December, climbing to 24.3 compared with 22.5 in November. Economists polled by MarketWatch expected a drop to 17.5.

In mid-day corporate news:

General Mills ( GIS ) is higher in regular-session trading after reporting an adjusted Q2 EPS of $0.77, or a penny shy of the Street. Revenues climbed 1% from a year-ago and the company reaffirmed its EPS guidance of $2.46 to $2.48 per share, excluding a tax benefit. The Street view is $2.48 per share.

Nokia ( NOK ) ADRs are lower after the mobile phone maker filed 13 additional patent infringement complaints against Apple ( AAPL ) in the Netherlands, the U.K. and Germany, Bloomberg reported. The new complaints make the total number of claims Nokia has against Apple at 37 in what has become a long-running dispute over smartphone technology. Apple's iPhone is a top seller in Europe.

Meanwhile, Discover Financial Services ( DFS ) is down in the regular session after it reported a $350 million profit. Still, net revenue (on an adjusted basis) declined 8%, versus a year ago, to $1.6 billion. Discover's results show a troubling trend for the credit card industry, which is seeing declining loan balances, The Wall Street Journal reported.

Johnson & Johnson (JNJ) shares are down after a Bloomberg report that the health care products company was cited by U.S. health regulators for violations at one of its plants where it stopped making over-the-counter drugs earlier this year. The U.S. Food and Drug Administration visited the plant from Oct. 27 to Dec. 9 and released an inspection report late yesterday. The report has been the latest in a string of production issues for J&J over the last 12 months.

Also, Bank of America (BAC) shares are higher as the bank reportedly appeals a bankruptcy court ruling that said it had to pay Lehman Brothers Holdings $590 million over deposits BofA seized during Lehman's bankruptcy. "The bank has established a substantial possibility of success on appeal," the bank said in its filing, accordign to Bloomberg.

Roche (RHBBY) ADRs are down after U.S. health regulators said the company's best-selling Avastin drug should not be used to treat breast cancer, Bloomberg reported. The statement comes after recent studies that showed the drug did not yield benefits. The FDA is reportedly in the process of rescinding Avastin's accelerated approval for the treatment of breast tumors.

BP plc (BP) ADRs are trending higher after falling the most in about four months in London trading. The moves come after the British oil major was sued by the Obama administration yesterday on claims the company--along with four other firms--violated environmental laws in the largest U.S. oil spill. Already, BP has put $20 billion into an escrow account to pay claims from individuals affected by the accident. It has also set aside $40 billion to pay for cleanup costs.

FedEx ( FDX ) shares are up around 2% in mid-day trade, which is a reversal of its pre-bell and opening loss, after investors looked past its earnings miss for fiscal Q2 and focused instead on inline guidance for Q3 and raised guidance for FY 2011.

Commodities are down as February gold contracts are down $18, or 1.29%, to $1,368 an ounce while January crude oil contacts are down 0.36%, or $0.32, at $88.27 a barrel.

In energy ETFs, the United States Oil Fund (USO) is down 0.05% to $37.97 and the United States Natural Gas fund (UNG) is down 4.3% to $5.57.

In precious metal ETFs, the SPDR Gold Trust (GLD) is down 0.66% to $133.81. Market Vectors Gold Miners (GDX) is down 1.59% to $60.02. iShares Silver Trust (SLV) is down 0.14% to $28.04.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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