Problems with compiling aa simple & statement

I'm having problems with the following simple line of code and was wondering if I could get a little insight as to what the problem may be..

My code..

My variables SystemStatus is declared as a unsigned int.

And MODEFAIL_BITS is equal to 0x0110.

Here is the simple line of cdoe.. The casts to UINT16 were added to try to solve the problem but were in vain.

if ((UINT16)SystemStatus & (UINT16)MODEFAIL_BITS)
{
   ..Print out some stuff and set a flag.
}

This compiles to the following.

; SOURCE LINE # 2776
015C E500        E     MOV     A,SystemStatus+01H
015E 5410              ANL     A,#010H
0160 FF                MOV     R7,A
0161 7401              MOV     A,#01H
0163 4F                ORL     A,R7
0164 603B              JZ      ?C0394

Which gives the wrong answer.. In my particular case

SystemStatus is 0x4000
MODEFAIL_BITS is 0x0110

The answer I get is 0x0100.. Looking at the
assembly code I can see why I get that answer.. but looking at my C code I can;t see why I'm getting that assembly code..

Any ideas or suggestions are greatly appreciated...
Thanks..