9:30AM London stocks were lower in early trading Friday on oil stocks.
The main index FTSE 100 in London was 15.1 points or 0.2% lower at 6,239.8 in mid-morning trade.

Decliners

BP led blue-chip fallers in London, shedding 1.7%, while BG Group was down 1.3% and Royal Dutch Shell B shares lost 0.9% on the lower oil price.

British Energy was down 0.9%, after it said that cracked pipes at two of its nuclear power stations were expected to have a significant impact on output for the financial year.

Copper prices once again hit mining stocks as Shanghai Futures Exchange contracts were lower across the board, increasing supply concerns. Kazakhmys fell 1.4%, BHP Billiton was lower by 1.2% and Anglo American lost 1.1%.

Some mid-cap companies were also dragged down by oil stocks with Dana Petroleum sliding 2.3% and Tullow Oil down 2%.

Advancers

ITV shares gained 1.1% after the Financial Times reported that RTL ias working with private equity backers on a possible 5 billion pounds offer for the commercial broadcaster.

Northern Foods put on 2.5% after ABN Amro upgraded the stock from hold to buy and raised its price target.

Ground preparation group Keller has issued another very bullish trading statement. Trading since the half year has been extremely good, it stated, culminating in an outstanding performance in October with orders up around 15% since the end of June. Keller advanced 6.45%.

Northern Foods made strong gains after ABN Amro turned buyer on the shares following interim figures earlier in the week. The Dutch broker also lifted its price target. Northern Foods gained 5.46%.


9:00AM U.S. stock futures declined after weak housing data.
U.S. stock futures declined Friday, following weaker-than-expected data on the housing market. Investors turned to profit taking after the Commerce Department said that new U.S. homes construction plunged 14.6% in October to the lowest level in six years, while building permits dropped 6.3%, a nine-year low. Economists had been expecting new home starts to fall 4.5% and building permits to decline 1%. At the same time, oil prices fell to their lowest level in more than a year. Crude oil slipped $1.01 to a 17-month low of $55.25 a barrel.

Disappointing results from Starbucks and the announcement by Hewlett-Packard of a formal SEC investigation also weighed on sentiment. Starbucks (SBUX: chart) dropped 6.1% after the coffee retailer reported a 5% decline in Q4 profit on a below-forecast 21% sales rise. Dow component Hewlett-Packard (HPQ: chart) lost 0.3% after the company said that the SEC had started a formal investigation into the spying scandal. In other earnings-related news, shares of Gap (GPS: chart) slipped 1.5% after the clothing chain reported an 11% profit drop and cut its full- year forecast. In merger-and-acquisition news, Johnson & Johnson (JNJ: chart) agreed to buy Conor Medsystems (CONR: chart) for $33.50 a share, or $1.4 billion. S&P 500 futures fell 4.10 points to 1,401.00 and Nasdaq 100 futures dropped 8.75 points to 1,801.50. Dow industrial futures shed 23 points to 12,327.

New U.S. homes construction slipped 14.6%.
The Department of Commerce released its report on housing starts and building permits in the month of October on Friday, showing that housing starts fell much more than economists had been expecting. The report showed that housing starts fell 14.6 percent to a seasonally adjusted annual rate of 1.486 million units in October from the revised September estimate of 1.740 million units. Economists had expected housing starts to fall to a 1.675 million unit rate. The decrease was partly due to a notable drop in housing starts in the South, which fell 26.4 percent to a 705,000 unit rate in October from a 958,000 unit rate in September. Housing starts in the Midwest and West also fell, offsetting a 31 percent increase in the Northeast. Building permits also dropped, falling 6.3 percent to a seasonally adjusted annual rate of 1.535 million units in October from the revised September rate of 1.638 million units. The drop in building permits may raise some concerns about the outlook for the housing market.


8:00AM Hewlett-Packard reported quadrupled q4 profit.
Hewlett-Packard Co. (HPQ: chart) said that Q4 earnings quadrupled but the SEC had ordered a formal probe of its boardroom spying scandal. HP earned $1.7 billion or 60 cents per share, compared with $416 million, or 14 cents per share last year, due to higher sales of laptop computers, printers and servers. Excluding one-time charges, the company’s profit rose 27% to $1.9 billion, or 68 cents per share from the same quarter last year, beating expectations of 64 cents per share on sales of $24.1 billion for the quarter. Fourth-quarter sales increased 7% to $24.6 billion, compared with $22.9 billion last year.

HP''s annual revenue surpassed $90 billion for the first time. For 2006, the company earned $6.2 billion, or $2.18 per share, compared with $2.4 billion, or 82 cents per share. Sales for the year were $91.7 billion, compared with last year''s total of $86.7 billion. The company projected Q1 earnings of 2007 to be between 55 cents and 57 cents per share, or between 60 cents and 62 cents per share excluding one-time charges, on revenue of between $24.1 billion to $24.3 billion. For 2007, earnings are expected to be between $2.28 and $2.33, or between $2.48 and $2.53 excluding one-time charges. Annual revenue is expected to be about $97 billion.

Shares of HP fell 53 cents to $39.60 in after-hours trading Thursday, as HP said in a regulatory filing that the SEC had started a formal investigation into the spying scandal.