Stocks finished mixed in a volatile session Wednesday as the market continued to digest Tuesday's statement from the Federal Reserve meeting on interest rates. The trade deficit swelled, coming in worse than expected.
The Dow Jones industrial average rose 59.79 points, or 0.61%, to 10,883.51. The broader Standard & Poor's 500 index reached its highest level in nearly four years, rising 5.31 points, or 0.42%, to 1,272.74. The tech-heavy Nasdaq composite index fell 2.41 points, or 0.11%, to 2,262.59.
Volatility in Wednesday's session may partly reflect activity related to the quarterly expiration of futures and options on Friday, according to Standard & Poor's MarketScope.
January West Texas Intermediate crude oil was down 52 cents at $60.85 a barrel following a Dept. of Energy report that crude oil inventories rose 900,000 barrels in the week ended Dec. 9. An American Petroleum Institute report said inventories fell 900,000.
There are a few economic reports coming Thursday. The November consumer price index (CPI) is expected to fall 0.4% in November, while the core index increases 0.2%. Energy prices are expected to finally post a sharp reversal following the strength in July through September, with gasoline prices expected to drop close to 14%, predicts Action Economics. "The November report should prove market-friendly, as it will support the Fed's view that inflation pressures remain contained," says Action Economics.
Other releases Thursday include weekly jobless claims, the Philly Fed index, the New York Fed index, and industrial production and capacity utilization.
In economic news Wednesday, the U.S. trade deficit widened again to a record $68.9 billion in October, from a revised $66.0 billion in September, reports Action Economics. Imports rose another 2.7% after a like-sized gain in September, with a boost from industrial supplies. Exports rebounded 1.7% following a 2.4% drop in September. The dollar fell on the news.
U.S. import prices dove 1.7% in November after a 0.3% increase in October (revised from -0.3%). Petroleum prices fell another 8.0% following a revised 1.0% decline. Excluding petroleum, import prices fell 0.2% and are up 2.6% on the year. Export prices fell 0.9%.
Among stocks on the move, Boeing (BA ) hit a new high and helped lift the Dow on news that the company's won a $10 billion aircraft order from Australian airline Qantas.
Apple Computer (AAPL ) was downgraded by Bear Stearns to peer perform from outperform on valuation.
Honeywell International (HON ) shares rose after the company issued a firm outlook. It sees $2.35-$2.50 2006 EPS including stock option expense on about $30 billion in sales.
The FDA received several new reports about patient deaths associated with short circuits in heart devices made by Guidant (GDT ), reports The New York Times.
Anteon International (ANT ) surged after the company agreed to be acquired by General Dynamics (GD ) in a deal valued at about $2.2 billion, including $100 million debt assumption, for $55.50 per share in cash.
In other deal news, FPL Group (FPL ), parent of Florida Power & Light, in advanced talks to buy Constellation Energy (CEG ) for more than $11 billion, according tos The New York Times.
In Europe, London's FTSE-100, Germany's DAX, and France's CAC-40 indexes finished mixed.
In Asia, Japan's Nikkei index plunged 314.28 points (1.99%) to 15,464.56 after the Tankan business sentiment survey disappointed and the dollar weakened against the yen. Exporters' revenues are hurt by yen strength since their products become less attractively priced in foreign markets, says Standard & Poor's MarketScope.
In Hong Kong, the Hang Seng index rose 33.64 points (0.23%) to 14,976.26 on hopes that the U.S. Federal Reserve's monetary tightening course is close to its end, says Standard & Poor's MarketScope.
Treasury prices rose, and yields fell, after the fresh record trade deficit, which may cut into fourth-quarter GDP growth forecasts, says Action Economics. Unwinding of import and export price pressures in November was also clearly evident after the storm and Boeing impacts dwindled -- pointing to likely tame results in this week's inflation reports, says Action Economics. The benchmark 10-year note yield fell to 4.45% from 4.52% Thursday.