- Equity markets opened flat to lower this morning following generally soft economic data - Empire Manufacturing and industrial production numbers came in below estimates - though indices were back in positive territory and trending higher in mid-morning trading. CBS said it would acquire internet media firm CNET in a $1.8B deal, giving the old-media titan control of one of the top ten most popular internet sites. CNET was up almost 50% on the news, while CBS was slipping. Billionaire investor Carl Icahn has confirmed his intent to launch a proxy battle to remove YHOO's board of directors. In a letter to Yahoo Chairman Roy Bostock, Icahn said he is nominating 10 directors, including himself, following the company's "irrational" actions toward MSFT's takeover bid. ACAT+10% reported a Q4 profit, disproving analysts' expectations for a loss; the company also guided above estimates for the coming financial year providing a glimmer hope discretionary spending is holding up through the downturn. BII was up more than 8% after beating estimates and reporting positive same-store sales data. Shares of JCP managed to gain ground after the retailer reported negative same-store sales for its Q1 and noted it saw difficult conditions for the rest of the year. In other news, GM said that it had reached a deal with the UAW to end a month-long strike at a Michigan plant and a tentative deal for a new contract with the CAW. SINA was up more than 7% after guiding improved margins for the balance of the year and 2009 and receiving a round of price target boosts from various analysts.

- Commodities and related stocks have been the best performers in the first half of today's trade. IYM +1.5% XAU +3.3% OIH +3% Reports of another explosion along a Nigerian oil pipeline sent crude above $126 again early on. Front-month heating oil and gasoline are each up more than 1% as well. Metals are rallying, with gold, copper and silver all up 2% or more. Treasury prices have been drifting higher since the open of floor trade, helped by the weaker economic data. The 10-year yield has fallen back below 3.9% while the two-year is sub 2.5% with some steepening seen in the benchmark curve. That October Fed fund future prices in a 16% change the Fed hikes rates by mid-autumn.

- Currencies have been whipsawed by price action in US morning trading as a slew of economic data, central banker speak and geopolitical events have provided a session best characterized as "headline roulette." Overall, EUR/USD continues to consolidate within its May trading range. Earlier euro strength from better first quarter German and Euro Zone GDP data was tempered by softer-than-expected EU core CPI data. Dealers were noting that hourly resistance was seen at the 1.5550 level, with euro buy stops building above that area. The USD is showing more signs of decoupling from rising commodity prices: reports that a Nigerian fuel pipeline exploded in Lagos sent crude above $126 and spot gold higher by $20 per oz, but the EUR/USD unable to break above 1.5550 level.

- ECB commentary basically toned down Euro Zone GDP expectations and hopes for tamer inflation. Indirect verbal intervention continues as ECB's Papademos noted that the euro has established itself as a second world currency, but added he did not see an immediate rise in the euro's importance. In typical fashion, ECB hawk Weber noted that an interest rate hike "remains a possibility" to contain inflationary expectations. Dealers noted that the one euro official seem to be expressing heightened concerns over the credit crisis just as the overall market is trying ease. US commercial paper continues its recent declining trend as it fell another $20B w/w to $1.743T. It has not risen on a weekly basis since March 27.

- Commodity-related currencies were stronger near their best levels for the trading day with the Nigerian pipeline incident helping the cause. USD/CAD is holding above parity at 1.0010, while AUD/USD consolidated in the 0.9370 area.  European fixed-income endured a volatile session, but recovered from earlier lows, helped by the cautious Euro Zone GDP expectations for coming quarters. The ECB's Trichet noted that EU first-quarter GDP growth was in line with recent data but added that Q2 will be "less flattering."