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Mid-Day Update: Stocks Higher; Consumer Sentiment, Personal Income Data Support

Here's where markets stand at mid-day:

-NYSE up 50.94 (+0.61%) to 8,392.60

-DJIA up 58.65 (+0.47%) to 12,461.41

-S&P 500 up 5.99 (+0.45%) to 1,331.68

-Nasdaq up 14.64 (+0.53%) to 2,797.54

GLOBAL SENTIMENT

Nikkei down 0.4%

Hang Seng up 1%

Shanghai Composite down 0.9%

FTSE-100 up 1.1%

MID-DAY NYSE INDEX WATCH

NYSE Energy down 5.28% at 13,635.66

NYSE Financial up 0.72% at 5,008.04

NYSE Health Care up 7.63% at 7,344.95

NYSE Arca Tech 100 up 0.57% at 1,178.47

UPSIDE MOVERS

(+) MRVL (+10.3%) continues evening rebound that followed guidance; earnings disappointed.

(+) RUE (+14.3%) continues upside move after earnings beat, upbeat guidance.

(+) BWC (+4.9%) upgraded.

(+) AATI (+54.7%) continued gain after deal on Thursday.

(+) SDRL (+1.5%) down despite earnings beat.

(+) HPQ (+0.8%) initiated with Neutral coverage.

DOWNSIDE MOVERS

(-) ESRX (-1.3%) to accelerate buyback.

(-) BCSI (-0.9%) downgraded this morning after disappointing earnings late Thursday.

(-) OVTI (-5.4%) continues evening drop that followed mixed guidance.

(-) ITRI (-6.4%) downgraded.

(-) MHS (-12.1%) discloses Blue Cross Blue Shield Move to Transition PBM Coverage.

(-) WY (-5.6%) downgraded.

MARKET DIRECTION

Stocks are firmly higher in mid-session trading ahead of the Memorial Day holiday weekend. New data showing that domestic incomes are rising and consumer sentiment improving provided some support.

The latest economic data showed incomes rising domestically in what is expected to be light trading ahead of the three-day holiday weekend. Europe is providing lift after the Group of Eight leaders pledged that a strengthening global economy would lead to debt reductions.

The Commerce Department said ahead of the regular session this morning that both personal income and spending rose 0.4% in April, in line with economists' forecast. But higher food and gas prices accounted for most of the spending increase.

Also, the Thomson Reuters/University of Michigan index of consumer sentiment gained in May, rising to 74.3 from 69.8 in April, according to reports. Economists surveyed by MarketWatch had expected a final May reading of 72.5, compared with an estimate earlier in the month of 72.4.

But April pending home sales fell 11.6%, the National Association of Realtors said. The pending home sales index reading of 81.9 in April came after a downwardly revised 92.6 in March, from an initial reading of 94.1. The big drop came after two monthly gains, and the NAR cited unusual weather and economic softness.

Fitch Ratings revised its outlook Friday on Japan's sovereign debt to negative from stable, citing rising government indebtedness, lack of policy direction in addressing its aging population problem, and as yet unknown costs related to reconstruction efforts following the devastating tsunami and earthquake in March. The ratings agency retained Japan's long-term local currency rating at AA, while it also noted that Japan's government debt reached 210% of gross domestic product at the end of 2010, the highest of any nation it tracks.

In company news:

Medco ( MHS ) is sharply lower after it said in an SEC filing it was notified that the Blue Cross Blue Shield Association intends to transition its mail order and specialty pharmacy benefit coverage for the Federal Employee Program ( FEP ) to an alternate provider, effective January 1, 2012. Due to the Dec. 31, 2011 transition date, the expiration of this contract will not have any impact on Medco's 2011 financial results.

The FEP contract generates nearly $3 billion in annual net revenues, including approximately 9.8 million mail order prescriptions, and represents less than ten (10%) percent of the company's estimated 2011 earnings.

Sony is lower after Tessera ( TSRA ) sued SNE in California state court, alleging breach of contract due to non-payment of royalties, Reuters reports. "Under our agreement with Sony, we have the right to examine and audit Sony's records regarding amounts due, as we typically have with all our licensees," said Chief Executive Robert Young.

CVS Caremark ( CVS ) is higher after it announced that it has been awarded a three-year contract to provide integrated pharmacy benefit services for the Blue Cross and Blue Shield Government-wide Service Benefit Plan, also known as the Federal Employee Program ( FEP ), based on the best overall value.

The company will continue to provide FEP's clinical programs and retail pharmacy benefit management services and also provide mail order pharmacy services and specialty pharmacy services to FEP's more than 5 million federal employees, retirees and dependents.

Take-Two Interactive (TTWO) shares are down as activist investor Carl Icahn is said to have cut his stake in the video game maker to 8.43%, according to a Reuters report citing a regulatory filing dated May 26. That is down from 13.7% two months ago.

Research In Motion (RIMM) slips after a class action suit was filed against the company. RIMM said it intends to vigorously defend against a purported class action lawsuit filed against the company and certain of its officers in the United States District Court for the Southern District of New York.

The lawsuit alleges that during the period from December 16, 2010 through April 28, 2011, the company and certain of its officers made materially false and misleading statements regarding the company's financial condition and business prospects, and seeks unspecified damages on behalf of an alleged class of purchasers of the company's common shares during this period.

Shares of Citigroup ( C ) are higher while The Wall Street Journal reports that the bank is arguing in a New York bankruptcy court that it is entitled to retain a $1 billion deposit it received from the collapsed Lehman Brothers investment bank. Citigroup said it is entitled to keep the money because when Lehman collapsed, it had "urgently requested" that Citi keep settling foreign exchange trades to "avoid catastrophic losses" to Lehman and its customers, the report said.

In earnings news:

--Seadrill (SDRL) reports Q1 revenue of $1.110 bln, about flat with Q4 levels of $1.169 bln. Earnings were $1.84. The Street view was $1.03 bln in revenue and earnings of $0.67 per share.

--Gordmans Stores (GMAN) reports Q1 EPS of $0.38 on sales of $117.7 million. The Street view is for EPS of $0.36 on sales of $120.47 million. For the fiscal year ending January 28, 2012, management now expects net sales to be between $553 and $557 million, which reflects the current comparable store sales trend. On that basis, diluted earnings per share are projected to be in the range of $1.18 to $1.23. The Street view is for EPS of $1.34 on sales of $$571 million.

Commodities are up. August gold contracts are up $14.90, to $1520.20 an ounce while July crude oil contacts are up 0.22% to $100.45 a barrel.

In energy ETFs, the United States Oil Fund (USO) is down 0.03% to $39.59 and the United States Natural Gas fund (UNG) is up 3.87%, to $11.53.

In precious metal ETFs, the SPDR Gold Trust (GLD) is up 1.03% at $149.74. Market Vectors Gold Miners (GDX) is up 1.3% to $57.85. iShares Silver Trust (SLV) is up 0.68% to $36.76.

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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