Major stock indexes finished modestly lower Wednesday amid M&A news, mixed earnings reports, and a rebound in overseas markets. The Dow touching a new all-time intraday high before retreating. More year-end portfolio adjustments could be in store as traders await several key economic reports due Thursday, says Standard & Poor's Equity Research.
On Wednesday, the Dow Jones industrial average edged down 6.41 points, or 0.06%, to 12,464.91, after touching a new trading record of 12,498.47. The broader Standard & Poor's 500 index fell 2.02 points, or 0.14%, to 1,423.53. The tech-heavy Nasdaq composite slipped 1.94 points, or 0.08%, to 2,427.61.
However, NYSE breadth was positive, with 19 issues advancing for every 15 declining. Nasdaq breadth was 17-14 positive.
Among stocks in the news, Hewlett-Packard (HPQ) helped support the Dow, rising 2.3% after Bank of America affirmed a buy rating on the computer maker.
M&A activity was also in focus. Swedish mobile phone equipment maker Ericsson (ERICY) agreed to buy networking gear maker Redback Networks (RBAK) for $2.1 billion in cash.
Meanwhile, Harrah's Entertainment (HET) accepted a $17.1 billion buyout offer from Apollo Management and Texas Pacific Group.
The New York Stock Exchange (NYX) said its shareholders approved a planned $14.3 billion deal to acquire Paris-based financial market Euronext.
Shareholders in foodservice company Aramark (RMK) approved a $6.3 billion leveraged buyout bid from an investment group led by CEO Joseph Neubauer.
In earnings news, FedEx (FDX) was lower after reporting a 9% increase in second-quarter profit on weaker-than-expected revenue growth.
Darden Restaurants (DRI) was down after the casual-dining chain operator posted a 12% rise in second-quarter profit amid strong organic sales growth at its Olive Garden restaurants.
On the upside, Carmax (KMX) was sharply higher after the used-car retailer said its third-quarter profit nearly doubled.
Companies set to announce quarterly results after the bell include Bed Bath & Beyond (BBBY) and Nike (NKE).
Elsewhere, Pepsi Bottling Group (PBG), the biggest maker, seller, and distributor of Pepsi (PEP), beverages, was lower after issuing a 2007 profit outlook that missed analyst expectations.
On the economic front, the number of mortgage applications last week fell 10.2% on a seasonally adjusted basis, according to the U.S. Mortgage Bankers Association. Wednesday's docket was otherwise light for economic data, with reports due Thursday on on economic growth, jobless claims, leading indicators, and regional manufacturing activity.
In the energy markets, January West Texas Intermediate crude oil futures rose 26 cents to $63.72 per barrel after a weekly inventory report showed an unexpectedly large decline in crude supplies.
European markets finished mixed. In London, the FTSE-100 index slipped 5.3 points, or 0.09%, to 6,198.6. Germany's DAX index rose 33.4 points, or 0.51%, to 6,586.91. In Paris, the CAC 40 index added 29.66 points, or 0.54%, to 5,514.42.
Asian markets ended higher after Thailand's government reversed restrictions on foreign investment. In Japan, the Nikkei 225 index rebounded 234.16 points, or 1.4%, to 17,011.04. In Hong Kong, the Hang Seng index climbed 275.57 points, or 1.45%, to 19,240.12. Korea's Kospi index advanced 14.52 points, or 1.02%, to 1,442.28.
Treasury prices drifted lower ahead of Thursday's barrage of economic data. The 10-year note edged down in price to 100-07/32 for a yield of 4.6%, while the 30-year bond slipped to 96-13/32 for a yield of 4.73%. The latest economic reports suggest the Federal Reserve will not cut interest rates next quarter, says S&P.