11:00AM U.S. stock averages traded mixed ahead of Fed Reserve’s decision.
The three major market averages were mixed in early trading hours, awaiting the Fed Reserve’s interest-rate decision. The Dow traded higher largely due to a significant advance by shares of Boeing (BA: chart). The aerospace giant was up 4.5% after the company reported Q4 earnings that came in well above analyst estimates. The company also raised its full year 2007 earnings guidance to between $4.55 and $4.75 per share.

The tech-heavy Nasdaq moved to the downside due to weakness among technology stocks amid disappointing quarterly results. Networking stocks posted considerable weakness, with Juniper Networks (JNPR: chart) helping to lead the sector lower after the company did not report earnings for the third straight quarter due to a stock-options investigation. The stock dropped 7%. Disk drive stocks also came under pressure, with share of SanDisk (SNDK: chart) down 8.1% after reporting a Q4 loss versus a year ago profit. In midmorning trading, the Dow Jones industrial average was up 12.98, or 0.10%, at 12,536.29. The Standard & Poor''s 500 index was down 1.89, or 0.13%, at 1,426.93 and the Nasdaq composite index was down 9.70, or 0.40%, at 2,438.94. Bonds rose moderately following the flurry of economic data, with the yield on the benchmark 10-year Treasury note falling to 4.87% from 4.88% late Tuesday.

Construction spending fell 0.4% in December.
The Department of Commerce released its report on construction spending in the month of December on Wednesday, showing that spending unexpectedly fell compared to an upwardly revised reading for the previous month. The report showed that construction spending fell 0.4 percent in December following a revised 0.1 percent increase in November. Economists had expected spending to come in unchanged compared to the 0.2 percent decrease that was originally reported for the previous month. The decrease in construction spending came as a drop in spending on private construction more than offset an increase in spending on public construction. The report showed that private construction fell 0.8 percent in December, as a 1.6 percent decrease in residential construction spending more than offset a 0.9 percent increase in non-residential construction spending. At the same time, spending on public construction rose 0.6 percent, benefiting from a 1.8 percent increase in education construction spending. Highway construction spending fell 1.1 percent.


10:30AM NY-7:00PM Mumbai Sensex declines in volatile trade, Tata Steel plummets.
The Sensex on BSE finished 121.04 points, or 0.85%, lower to 14,090.92. The index traded in a range of 223 points for the day in a volatile session. The market-breadth was negative. As 1,706 shares declined, 939 advanced and 43 remained unchanged. Of the 30 stocks in the Sensex, 19 declined while the rest advanced. The turnover on BSE was Rs 5,099 crore, higher than Rs 3,703 crore on Monday. On NSE, the turnover was Rs 10,330.87 crore, compared to Rs 8418.37 crore on Monday.

Economic news

Government of India revised upwards its fiscal 2006 GDP growth estimate to 9.0% from an earlier estimate of 8.4%. Manufacturing output growth was revised to 9.1% from 9.0% and farm output was revised to 6.0% compared to 3.9% for the same period a year ago.

Standard & Poor’s upgraded India long-term sovereign credit rating on Tuesday to investment grade. The bank issued a stable outlook for the rating. India became the 13th country rated by S&P to have emerged from non-investment grade to investment grade.

The Reserve Bank of India lifted its key short-term lending rate on Wednesday to its highest level in nearly four years on inflation worries. The main lending rate, known as the repo rate, was raised to 7.50% from 7.25%, but the Reserve Bank kept its reverse repo rate unchanged at 6.0%.

Trading highlights

Tata Steel Ltd. won the auction for U.K. Corus Group Plc for 6.2 billion pounds, or $12 billion, making the deal the largest acquisition by an Indian company. Tata topped the deal proposed by CSN of Brazil in a three-month race. In its final bid, Tata has offered Corus investors 608 pence per share in cash, compared to a final bid of 603 pence from CSN.

Most-active

Tata Steel was the most-active stock with a turnover of Rs 279.20 crore followed by Shree Ashtavinayak and Pyramid Saimira.

Decliners

Tata Steel led the decliners in the Sensex, as it plummeted 11.10% to Rs 461.80. Tata Steel reported 41.1% growth in Q3 net profit to Rs 1,063.75 crore, on 21.4% growth in net sales to Rs 4,469.98 crore. Other prominent decliners included Hindalco shedding 3.24% to Rs 174.85, Hindustan Lever dipping 3% to Rs 207.45 and Wipro losing 2.66% to Rs 614. Tata Motors also lost 2.5% to Rs 878.

Index heavy Reliance Industries declined 1.52% to Rs 1,360.75. ACC and Grasim dipped 2% each to Rs 1,020 and Rs 2,770, respectively. L&T lost 1.5% to Rs 1,587, ICICI Bank sagged 1.5% to Rs 940. ONGC finished 1% lower to Rs 903. ONGC announced its Q3 net profit rose 20%, topping forecasts of 6% rise in net profit.

Advancers

Gujarat Ambuja Cements led the advancers, adding 1.78% to Rs 137. Reliance Energy gained 1.60% to Rs 514 as the company announced it has secured power projects worth about Rs 4,150 crore in Haryana and Uttar Pradesh. ITC rose 0.93% to Rs 174, after reporting 33.6% growth in net profit in Q3 to Rs 717.40 crore, from Rs 536.83 crore during the year ago period. HDFC Bank and Satyam rallied nearly 2% each. HDFC Bank finished at Rs 1,078, while Satyam advanced to Rs 472.