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Rising volume swept away early losses that followed the Shanghai composite’s 6.5% drop. Finance firms and makers of mining, construction and farm equipment showed some of the best performances in early afternoon trading.

The Nasdaq composite was up 0.1%, the NYSE, 0.2% at 12:58 p.m. ET. The Nasdaq’s finance index led the gains, rising 1.0%.The S&P 500 rose 0.2%, the Dow eked up 0.1%. NYSE volume jumped 31%, Nasdaq vaulted 43% above Tuesday’s levels.

A steady buzz of mergers and acquisitions kept the market humming. Computer equipment retailer CDW Corp. () said late Tuesday it would be acquired by a private equity company for $7.3 billion. Cantor-Fitzgerald’s publicly owned trading operation ESpeed () announced it would buy the brokerage unit of New York bond trader BGC Partners for $1.3 billion deal.

Shares of Apple () jumped onto the Stocks On The Move list, rising 1.29 to 115.64. The move, on rising volume, followed the company’s release of its iPod Plus, a downloadable, rights-free music library supplied by EMI’s catalog of digital recordings.

The stock popped above short-term resistance at 115, and left it extended 20% above a 96.93 buy point on a pullback to the 50-day moving average line.

Handbag cobbler Coach () popped up 1.56 to 51.07. The stock has been consolidating since April, and below its 50-day moving average for more than four weeks. Today’s 4% jump pushed it back above its moving average, and 5% below its April 23 high.

Keystone Automotive () gapped down, reversing down 1.55 to 40.76. The distributor of aftermarket auto parts logged three days of high volume gains after reporting Q1 earnings rose 39%, 7% above analysts’ consensus. The stock could be building a handle on a 31-week cup-shaped base.

11 a.m. ET Update: Shanghai Market Blip Nicks U.S. Stocks

By ALAN R. ELLIOTT

U.S. stocks fell in early trading after Chinese regulators increased the cost of investing in the country’s stock markets. Most indexes were recovering to near their opening levels at 10:55 a.m. ET.

The NYSE composite was down 0.2%, the Nasdaq, 0.3%. Financial stocks continued their strong run begun Tuesday. The S&P 500 and the Dow were also both down 0.2%.

NYSE volume was off 4%. Nasdaq trading volume was 9% higher.

The Shanghai composite tumbled 6.5% after the Chinese government tripled a certain stock trading transaction cost. The move was aimed toward outside investment in the country’s stock markets, which some see nearing a strong correction.

It was the Shanghai market’s worst hit since a 9% dive on Feb. 27. Other foreign markets dipped less severely. Tokyo’s Nikkei 225 sank 0.5%. London’s FTSE 100 registered a 0.3% loss.

The Federal Open Market Committee will release the notes from its May 9 meeting today.

Losers led gainers in early trading on U.S. markets by 3-to-2 on the NYSE, 2-to-1 on the Nasdaq.

Trina Solar Limited () dropped 2.53, or 5%, to 46. The Chinese maker of solar modules fell further below its 50-day moving average. The stock is now 33% off its April 16 peak.

DXP Enterprises () gapped down and lost 2.98 to 49.11. The industrial pump and supplies maker priced a share offering at 47. Proceeds will go to pay down $35 million in debt. The additional $10 million will be used for general purposes, and possibly acquisitions. The stock had been recovering from a deep, 13-month correction. Shares remained above their 50-day moving average, but 8% below their recent high.

VeriFone Holdings () gapped down and lost 2.05, or 5%, to 35 on heavy trade. Late Tuesday, the maker of electronic payment devices delivered fiscal Q2 profit results, excluding charges, above views. But sales fell short of analysts’ estimates.

On the upside, dress shirt maker Phillips-Van Heusen () gapped up, adding 5.36 to 61.68. The company reported Tuesday its Q1 earnings rose 22%, 5% above views. Sales climbed 17%, 2% above estimates. Phillips raised its full-year earnings guidance by 2%. The 9% spike came in huge volume, triggering a breakout above a left-side buy point of 60.80 in a nine-week base.

Chicago-based power utility Excelon () jumped 1.82 to 75.47. The 3% move hoisted the stock off its 50-day moving average line. That left shares 5% below their May 8 high.

SINGAPORE (XFN-ASIA) - The US dollar stayed on the back foot in afternoon trading here, having crumbled earlier in the Asian session under a bullish outlook for sterling on expectations of higher interest rates in UK, which have kept the pound entrenched above the 2.00 usd mark.

At 3.51 pm here (0751 GMT), the dollar was at 118.64 yen, down from 118.67 yen in Sydney just over 3-1/2 hours earlier. The euro was at 1.3589 usd, up from 1.3584 usd in Sydney. Sterling was at 2.0081 usd, down from 2.0088 usd in Sydney.

In morning trading in Asia, sterling had risen to a high of 2.0089 usd.

OCBC Investment Research said in a daily note: “UK March CPI inflation rose a significantly stronger-than-expected 3.1 pct year-on-year, essentially sealing market expectations for another Bank of England rate hike next month.”

Dealers said all eyes would now focus on the Bank of England’s minutes of the April 4-5 meeting of its monetary policy committee, which are due to be released later today.

UBS said in a market note: “Concerns of increased pricing power and unhinged inflation expectations remain important for the monetary policy committee.”

It added: “Crucially, it is unclear whether the committee will want to surprise market expectations by holding policy rates unchanged even if, on its on forecast, inflation is below the target for most of next year and the year after.”

Dealers said a test of the euro’s lifetime high of 1.3667 usd could be just days away.

“Euro-dollar looks set to follow through with a rise above its end-2004 high of 1.3661 usd,” DBS said in a market note.

“Even dollar-yen is looking at the downside after a token attempt to test higher, [to] the 120 yen level,” it said.

Singapore 3.51 pm (0751 GMT) vs Sydney 2.10 pm (0410 GMT)

US dollar

yen 118.64 down from 118.67

sfr 1.2057 down from 1.2073

Euro

usd 1.3589 up from 1.3584

yen 161.24 up from 161.19

sfr 1.6387 down from 1.6400

stg 0.6767 up from 0.6763

Sterling

usd 2.0081 down from 2.0088

yen 238.28 down from 238.31

sfr 2.4214 down from 2.4248

Australian dollar

usd 0.8366 down from 0.8367

stg 0.4166 up from 0.4164

yen 99.260 down from 99.270

singapore@xfn.com

Stock futures pointed to a weaker start Wednesday after strong gains on Tuesday. Nasdaq futures fell 7 points vs. fair value, the S&P 500 is down 5 points and the Dow 22 points lower.

Foreign stock markets were mixed. Hong Kong’s Hang Seng climbed 1.5%, while the Shanghai composite bounced 1.1%. The Nikkei reversed earlier gains and dropped 0.5% after Japanese Prime Minister Shinzo Abe announced his resignation.

European indexes were modestly lower.

No big economic reports are on tap today. But data on weekly energy inventories will be out at 10:30 a.m. ET.

Crude prices rose to a record close on Tuesday even after OPEC announced it would boost production.

The dollar continued its slide on continuing rate-cut expectations. The greenback hit a new record low against the euro.

Tech issues may come under pressure after Texas Instruments () tightened its Q3 sales outlook to $3.56 billion to $3.72 billion. Previously it pegged revenue between $3.49 billion and $3.79 billion. The world’s largest maker of cell phone chips also tightened earnings guidance. Shares fell 2% in the premarket.

Carrizo Oil & Gas () slipped 2.5% in pre-open trading after it priced an offering of 1.8 million shares at $41.40 each.

First Solar () rose 3% in the premarket after Goldman Sachs started coverage with a buy rating. Goldman also placed a six-month price target of $125 a share on the solar modules maker.

Mattel () edged lower in pre-market trading. A Senate panel will investigate the recent recalls regarding China-made toys. On Tuesday, China agreed to prohibit the use of lead in toys exported to the U.S., boosting Mattel shares.

LONDON: Standard Chartered said Thursday that it could lend as much as $7.15 billion to its Whistlejacket Capital structured investment vehicle, the seventh bank to rescue such an investment vehicle after investors shunned debt sold by the funds.

Standard Chartered will support the structured investment vehicle, known as an SIV, by buying short-term commercial paper. The lender, based in London, is offering the financing on condition that investors remove clauses that could force the SIV to close down.

Banks like HSBC and Citigroup have stepped in to support their SIVs after the collapse of the U.S. subprime mortgage market caused the prices of the funds assets to decline. SIVs, which use short-term borrowing to invest in longer-dated assets, cut their holdings by more than $100 billion from a peak of $400 billion last year, according to Moodys Investors Service.

“This is simply a backstop facility,” said Richard Meddings, finance director at Standard Chartered. “It is not clear to what extent it will get drawn.”

The new credit line should let Whistlejacket raise funds from “other third parties,” Meddings said, without providing additional details.

Standard Chartered will take an additional $70 million charge in 2007 linked to Whistlejacket, on top of the $46 million write-down it announced in December, Meddings said.

The bank will take on Whistlejackets assets and liabilities if the commercial paper facility is used. The assets represent about 2 percent of Standard Chartereds balance sheet, Meddings said. Standard Chartered does not expect the commercial paper facility to have a material impact on 2008 earnings.

“This is relatively minor for Standard Chartered, but shows it isnt immune from the troubles in the broader market,” said Simon Maughan at MF Global Securities in London.

Whistlejackets assets fell to $7.15 billion from $18.2 billion at the end of August after the SIV sold holdings to repay maturing debt.

LONDON (Thomson Financial) - The UK Treasury should review Chancellor of the Exchequer Gordon Brown’s self imposed ‘golden rule’ and consider how to make it less dependent on the dating of the economic cycle, the Treasury Select Committee said in a review of this year’s Budget.

The golden rule, which has been in place since Labour came to power in 1997, states that the government can only borrow to invest over the course of the economic cycle and not to finance current spending on things like salaries. The rule came under scrutiny, however, when Brown changed the forecast start date of the latest economic cycle to 1997, two years earlier than previously thought.

“We reiterate our recommendation that the government review the golden rule and consider how to make it more forward-looking and its application less dependent on the dating of the economic cycle,” the Committee said.

The report said the output gap, which is used in decisions on the timings of economic cycles, has become more difficult to forecast due to the difficulty in estimating the level of inward migration into the UK.

“Migration of uncertain magnitude and the greater stability of the economy may reduce the value of the concept of the output gap as a tool of economic analysis,” it said.

“We recommend that the government examine the impact of these factors on the role which the concept of the output gap should play in Treasury forecasting and analysis,” it said.

The Treasury Committee is an all-party group appointed by the House of Commons to examine the expenditure, administration, and policy of the Treasury.

jessica.mortimer@thomson.com

jkm/slj

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