U.S. MARKET AVERAGES

Market traded weak in the morning hours as record October trade deficit put the equity market and dollar under pressure. However weakness in the oil, copper, gold and silver gave support to the falling averages. Energy stock rose as oil fell. Sharp rise in shares of Boeing (BA) helped market to regain momentum in the large cap stocks. Dow Jones Industrial Average gained in the session as shares of Honeywell soared 4.5%. The reaffirmed the 2006 revenue and earnings guidance in line with Wall Street expectations.

Nasadaq took hit in today’s session on double downgrade for Apple Computer (AAPL) stock. Shares of Apple fell as much as 6% before recovering to a loss of 3% on downgrades from Bear Stearns and Bank of America on valuation consideration. Shares of Electronic Arts (ERTS) came also under pressure on the report that November hardware sales were up 9.5% and software sales were down 18%. Shares of other game makers including Take Two Interactive (TTWO) and THQ Inc (THQI) were down.

Another month another trade deficit, except that this time it was approaching record level. Commerce Department reported October trade deficit of $68.9 billion on back of 2.7% rise in import and 1.7% rise in import. It seems that at this rate the annual deficit will cross $725 billion in 2005 and approach $1 trillion in 2006.

Suntech Power Holdings Co. Ltd (STP) priced 26.4 million shares at $15 and saw its shares rise close to $21 before close. Chinese based solar technology company is the second IPO to be priced this year in the solar technology field after SunPower Corp (SPWR) priced its IPO less than a month ago.

Falling bond market yield supported rise in housing and consumer stocks. Share of D R Horton (DRI), Toll Bros (TOL), Lennar (LEN) and Hovnanian (HOV) rose as yield on 10-year dropped to 4.44%.

MOVERS AND SHAKERS

Apple Computer (AAPL) was downgraded to peer perform from outperform by Bear Stearns on valuation and maintaining estimates. Bear Stearns said the valuation reflects much of the near-term optimism and is 7% above its year-end 2006 fair value. The stock fell 3.4%.

Arena Pharmaceuticals Inc. ((ARNA) said it had seen positive results from its Phase IIb clinical trial for APD356, its drug candidate for the treatment of obesity. Arena said APD356 was generally well-tolerated at all doses investigated in the trial and there were no apparent effects on heart valves or pulmonary artery pressures. Company’s shares rose 23%.

SciClone Pharmaceuticals (SCLN) reported mixed results in trials of its Zadaxin drug. SciClone said it and Sigma-Tau S.p.A. have found from interim results from a Phase 2 trial that Zadaxin with dacarbazine chemotherapy showed a dose-dependent response for patients with advanced-stage malignant melanoma. But SciClone said the first Phase III trial of the drug with pegylated interferon alpha didn''t show a statistically significant benefit compared with pegylated interferon alone in treating Hepatitis C. Company’s shares slid 39.2%.

Baidu.com (BIDU), Internet search provider, said it will release a total of up to 3 million outstanding ordinary shares from lock-up restrictions, effective Dec. 19, thus allowing the sale and transfer of shares by shareholders who were subject to the restrictions as of Dec. 2. The stock fell 5%.

ECONOMIC NEWS

Crude oil inventories ticked higher in the most recent week, according to government data released Wednesday, adding to a rebound recorded in the previous period. Stocks of gasoline also moved higher.

The Department of Energy''s Energy Information Administration revealed that crude oil inventories rose by 900,000 barrels for the week ended December 9, climbing to 321.2 million barrels from the prior week''s level of 320.3 million barrels. This followed an advance of 2.7 million barrels in the previous week. Oil inventories were 11.7% higher than their levels of the same time last year.

Gasoline inventories posted a week-over-week advance of 1.8 million barrels, the government said, compared to the previous week''s 2.7-million-barrel climb. Gasoline stocks were 4.1% below their levels of last year. Inventories of distillate fuel oil ticked down by 100,000 barrels as well in the most recent week.

Wednesday morning, the Department of Labor release its report on import and export prices in the month of November, with a steep drop in prices for petroleum imports contributing to a notable decline in import prices.

The report showed that import prices fell 1.7 percent in November following a 0.3 percent increase in October. Economists had been expecting a much more modest decrease of about 0.5 percent.

The decrease in import prices was largely due to a significant decline in prices for petroleum imports, which fell 8 percent in November after falling 1 percent in October. Excluding petroleum imports, total import prices fell by a more modest 0.2 percent.

The report also showed that export prices fell 0.9 percent in November following a 0.7 percent increase in October. Prices for agricultural exports fell for the third time in the past four months, falling by 0.3 percent.

The U.S. trade deficit unexpectedly widened in October, according to a report from the Department of Commerce, reaching a new record high. The wider deficit came as an increase in imports outpaced an increase in exports.