Stocks finished mixed Wednesday, as crude oil prices spiked up by more than a dollar, and traders looked for direction. Stocks on the New York Stock Exchange were positive by a ratio of 17-to-16, while the Nasdaq was 17-to-12 negative.
The Dow Jones industrial average gained 16.88 points, or 0.16%, to 10,473.09. The broader Standard & Poor's 500 index was up 1.23 points, or 0.10%, to 1,216.89. The tech-heavy Nasdaq composite index fell by 1.02 points, or 0.05%, to 2,115.40.
The price of November NYMEX crude oil settled up $1.28 at $66.35 a barrel following the weekly energy inventory data. The oil report showed a 2.4 million barrel draw in oil supplies from last week, vs. market expectations of a 1 million barrel draw. Gasoline supplies surged far beyond expectations, showing a 4.4 million barrel boost in supply rather than the 2.5 million barrel decline that was expected. Nevertheless, gasoline futures climbed by 8% as the inventory report was judged to be unreflective of the impact from Rita and Katrina.
"The data is bearish [for energy traders] overall," says Action Economics, "though sources remain unconvinced of the ability of refineries to come back on line quickly, and expect product prices to remain firm."
In economic news, August durable goods orders bounced up 3.3%, after a 5.3% drop in July. Nondefense capital goods orders, excluding aircraft, rose by 3.6%, shipments rose by 1.7%, and the transportation sector also recovered after July's losses. Economist expectations had been for a durable goods orders increase of only 1.0%. "The data are stronger than expected, but the monthly volatility in the data will mute their market impact," says Action Economics.
In deal news, NRG Energy (NRG) is in advanced talks to acquire electricity wholesaler Texas Genco from a private equity group for at least $5 billion, according to the Wall Street Journal.
General Motors shares moved higher after news that the Canadian Auto Workers union reached a tentative three-year agreement with the company. The agreement prevented the potential walk-out of the 17,000 union members that work at GM.
DaimlerChrysler sent shares higher after news that the auto giant would cut at least 5,000 jobs at its Mercedes unit, in an effort to cut costs.
PayChex (PAYX), the human-resources services concern, announced first-quarter earnings Wednesday. The company saw net income of 30 cents a share, vs. 23 cents a share during the same period a year ago, on a 17% rise in revenue. This beat median earnings estimates by 2 cents a share.
Treasury yields finished lower Wednesday after oil prices surged higher. The strong durable goods orders sparked some defensive trading, says Action Economics, but the trend was reversed following the day's two-year note auction. The yield on the ten-year note finished at 4.26%.
European stock markets finished higher Wednesday. London's Financial Times-Stock Exchange 100 index was up 47.50 points, or 0.87%, at 5,494.80.
Germany's DAX index gained 82.86 points, or 1.67%, moving to 5,048.74. In Paris, the CAC 40 index rose 52.83 points, or 1.16%,to 4,599.63.
Asian markets finished higher on Wednesday. In Japan, the Nikkei 225 index rose 125.87 points, or 0.95%, to 13,435.91.
Hong Kong's Hang Seng index gained 31.58 points, or 0.21%, to 15,221.46.