Stocks finished in mixed mode on Wednesday as investors weighed economic reports, including one showing a higher revision in third-quarter economic growth and another indicating inflation pressures. Bond yields rose.
The Dow Jones industrial average fell 82.29 points to 10,805.87. The broader Standard & Poor's 500 index was down 8 points at 1,249.48. The tech-heavy Nasdaq composite index inched up 0.11 point at 2,232.82.
January West Texas Intermediate crude oil rose 82 cents to $57.32 a barrel. A much larger draw in crude inventories ultimately lifted crude prices, though a big build in heating oil stocks tempered the gains, reports Action Economics.
A few more economic reports are coming out Thursday. The headline November ISM index -- a guage of manufacturing activity -- is expected at a solid 58.0, from the stronger-than-expected reading of 59.1 in October. The strength in the November Empire State index, Philly Fed survey, and Chicago-PMI all support another robust reading, says Action Economics. The market will take a close look at the inflation related data, given recent strength, says Action Economics.
Thursday's release of October personal income is expected to rise 0.5%, while consumption increases 0.2%.
Also coming Thursday is weekly jobless claims and auto sales for November.
In economic news Wednesday, third-quarter gross domestic product (GDP) growth was revised higher to a 4.3% rate, from the advance reading of 3.8% -- a bit stronger than the consensus forecast. Consumption was revised to 4.2% from 3.9%. Business investment was revised up to 8.8% from 6.2%. Inventories were revised to show a $11.7 billion subtraction from negative $15 billion. Net exports offset however, and were revised lower to show a 0.25% subtraction from 0.8% contribution previously. The chain price index was cut slightly to 3.0% from 3.1%, while the core PCE price index was lowered to 1.2% from 1.3%.
The November Chicago PMI slowed to 61.7 after rising to a very robust 62.9 in October. Prices paid surged to a whopping 94.1 from 79.6. The employment index dipped to 50.3 from 51.3. New orders softened to 61.4 from 72.6.
The Fed's Beige Book reiterated that the economy "continued to expand from mid-October through mid-November," says Action Economics. The Fed said there were "persistent input price pressures." However, consumer prices remained "stable or experienced generally modest increases." There was nothing really surprising in the report, and as it is a summary of businessmens' views rather than Fed officials', says Action Economics.
Among companies in the news, UBS Financial reportedly downgraded Yahoo (YHOO) to neutral from buy on valuation.
Novellus Systems (NVLS) sees 15-17 cents fourth-quarter earnings per share on revenue of $305-$315 million. It sees fourth-quarter bookings up 5%-10%.
Microchip Technology (MCHP) reaffirmed third-quarter guidance of about 32 cents EPS on sales of $234 million. The chip maker says revenue growth in the current quarter is being led by the analog division, which is expected to grow about 20% sequentially and by more than 40% year-over-year.
In earnings news, Tiffany & Co. (TIF) reported third-quarter earnings per share of 16 cents, vs. 12 cents a year ago, on a 7% rise in U.S. retail same-store sales and 8.4% total sales rise. The luxury retailer maintained its forecast for 8%-10% fiscal year 2006 net sales growth and $1.55-$1.65 EPS. Its revenue fell short of some analysts' forecast, sending the stock lower.
In Europe, London's FTSE-100, Germany's DAX, and France's CAC-40 indexes finished lower. In Asia, Japan's Nikkei index fell 55.55 points to 14,872.15. The Hang Seng index slid 91.62 points to 14,937.14.
Treasury yields climbed on amid another round of welcome news on the economic front and some emerging jitters on inflation,
says Action Economics. The benchmark 10-year note yield rose to 4.50%.