- Stocks opened on a positive note this morning helped by strength in the European bourses and a slight pullback in oil prices. The pullback in energy was short lived as crude has risen back above $142 following weekly DOE inventory data and a high ranking Pentagon official reiterated the US stance that Iran is still on the path to nuclear weapons. The ADP jobs report certainly has not helped the overall feel after showing the largest a loss of nearly 80K jobs with the service sector is showing its first decline since 2002. Healthcare stocks HUM+2.3%, CI+4% and WLP+4% were rising in the pre-market after UNH cut is guidance for the coming quarter and the full year, but were trading off their highs mid morning. UNH noted that it has been experiencing greater-than-expected pressure on premium yields due to an intensely competitive commercial business environment. BBI is up more than 10% this morning after withdrawing its $1B takover offer for CC-13.5%; Circuit City's CEO noted that the retailer is continuing to explore strategic alternatives. In other M&A news, the Wall Street Journal is reporting Microsoft is talking with other media companies, including News Corp and Time Warner, about forming a group to break up YHOO+7% for mutual benefit. Coal stocks BTU-6%, ACI-9% and MEE-10% are taking a hit after reports circulated that scheduled coal deliveries in Europe have fallen as much as 13%, marking the steepest one-day drop in three years. APOL+24% is helping education names CECO+3.5%, COCO+3.3% and DV+13% rise after beating earnings after the close yesterday. Discount chain FDO+12% is thriving in difficult times, guiding higher this morning for the coming quarter and the year. FDO's CEO sounded a cautionary note on the earnings conference call, saying that he expects the benefit stemming from stimulus checks to be brief and his concern regarding the economic pressures faced by customers in coming year.

- The USD drifted lower during the New York morning, hitting fresh 10-week lows against the Euro as the pair trended above the 1.5850 level. The GBP recovered from earlier losses following UK Construction PMI data that confirmed further housing sector woes for jolly old England. However, the GBP/USD pair continues hold below its 200-day moving average at 1.9977. The dollar is being hampered by the softer employment report, while dealers are preparing for a slew of economic data scheduled for Thursday, primarily the US non-farm payroll report. The ECB is also expected to render its long-hearlded interest rate increase to combat inflationary expectation on Thursday.

- Tomorrow's data will highlight the recent debate among analysts over the question of whether central banks should focus their primary energy on issues of economic growth or on inflationary concerns. Various comments from European officials have indirectly addressed this question ahead of the ECB rate decision. German Finance Ministry Steinbrueck said that the ECB should consider implications of any interest rate increase, while the the EU's Almunia noted the euro is "overvalued." French Finance Minister Lagarde said the dollar's decline affects Euro Zone economies, while President Bush reiterated his supports for a strong USD policy. The BoE's Bean noted that financial market dislocation has more room to run and that the bank may have difficulty achieving its inflation target.