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Merger talk dominates US as global stocks tread water

The 1.1% inflation figure for December was nearly double the 0.6 percent in November and edges inflation closer to the European Central Bank's target of 2.0 percent as a fragile economic recovery continues

Megamerger buzz returned to Wall Street Friday as global stocks treaded water, while shares of Time Warner and Reynolds American both surged on news of possible takeover deals.

The takeover talk came as investors mulled the European Central Bank's reticence Thursday about future monetary stimulus moves, with equity markets in Paris and Frankfurt finishing essentially flat.

US stocks also ended little changed, but the session in New York was rocked by some big movements in individual shares due to news of large potential takeovers and surprise earnings results from blue-chip companies.

Time Warner soared 7.8 percent as the Wall Street Journal reported that telecom giant AT&T was in advanced talks to acquire the entertainment group. AT&T fell 3.1 percent.

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The talks, subsequently confirmed by AFP, come as media companies face challenges from the decline of conventional cable television as more consumers turn to streaming on mobile technology.

Analysts believe an AT&T purchase of Time Warner also could spark other megadeals involving large media companies. Shares of Disney, 21st Century Fox and Netflix all rose Friday.

Tobacco giant Reynolds American shot up 13.8 percent after British American Tobacco launched a $47 billion bid to buy the 58 percent of the company it does not yet own. British American Tobacco dropped 2.9 percent in London.

On the earnings front, Microsoft jumped 4.3 percent to top its December 1999 record high after it's earnings of $4.7 billion in net profit beat expectations due to rising demand for its offerings in the internet cloud.

Dow member McDonald's advanced 3.0 percent after reporting better-than-expected earnings as strong comparable sales growth in Britain, Japan and some other overseas markets offset slowing growth in the US.

The results were another sign of progress in McDonald's turnaround under Steve Easterbrook, who was named chief executive in January 2015.

The euro stayed under pressure after Thursday's ECB meeting at which the central bank kept interest rates unchanged.

Analyst Kathy Lien of BK Asset Management said the single currency's retreat was a bit surprising given that there was "nothing exceedingly dovish" in ECB chief Mario Draghi's commentary.

"Yet the lack of emphasis on the positive gave investors the green light to continue driving the currency lower," she said.

- Key figures around 2100 GMT -

New York - Dow: DOWN 0.1 percent at 18,145.71 (close)

New York - S&P 500: DOWN less than 0.1 percent at 2,141.16 (close)

New York - Nasdaq: UP 0.3 percent to 5,257.40 (close)

London - FTSE 100: DOWN 0.1 percent at 7,020.47 (close)

Frankfurt - DAX 30: UP 0.1 percent at 10,710.73 (close)

Paris - CAC 40: DOWN 0.1 percent at 4,536.07 (close)

EURO STOXX 50: UP less than 0.1 percent at 3,077.65

Tokyo - Nikkei 225: DOWN 0.3 percent at 17,184.59 (close)

Hong Kong - Hang Seng: UP 0.3 percent at 23,374.40 (Thursday close)

Shanghai - Composite: UP 0.21 percent at 3,090.94 (close)

Euro/dollar: DOWN at $1.0880 from $1.0928 Thursday

Dollar/yen: DOWN at 103.83 yen from 103.99 yen

Pound/dollar: DOWN at $1.2227 from $1.2254

Euro/pound: DOWN at 88.98 pence from 89.18 pence

Oil - West Texas Intermediate: UP 22 cents at $50.85 per barrel

Oil - Brent North Sea: UP 40 cents at $51.78 per barrel