U.S. MARKET AVERAGES

Stronger new home sales, rising consumer confidence, and better than expected orders for durable goods all pointed a positive start at the opening.

The market mild rally quickly faded as traders worried of the rising inflation and Fed’s desire to keep raising the interest rates in the wake of stronger economic data. Market averages at close did not reflect the strength in the economy and closed near unchanged.

Home builders stocks declined despite the better than expected new home sales in October of 1.42 million homes. Economists had forecasted 1.2 million October sales. Strength in the Western region supported the home sales in October. The Commerce Department revealed that new home sales advanced 13% in October to a seasonally-adjusted annual rate of 1.424 million units, reaching the biggest monthly increase in more than a decade.

The Commerce Department also reported that factory goods orders sharply rose in October, up $7.1 billion on five-year high of military aircraft demand.

In another economic report, the Conference Board revealed that its consumer confidence index came in at 98.9 for November, an increase from October's level of 85.2.

Sycamore Networks jumped to a new 52-week high after reversing a year-ago loss, releasing a better-than-expected profit in the first quarter. Express Scripts also reached a fresh peak of 5% on strong 2006 guidance. MetLife, Mellon Financial and Prudential are other noteworthy stocks reaching new highs.

American Woodmark's reached a new 52-week low, dropping 15% on earnings report. Education Realty Trust has also dropped to a new low on earnings-related news, falling more than 3% on guidance released late Monday.

Bonds slid, with the yield on the 10-year Treasury note rising to 4.48% from 4.41% late Tuesday.

MOVERS AND SHAKERS

Express Scripts Inc , pharmacy-benefits manager, projected 2006 earnings in the range of $3.10 to $3.22 a share, exceeding analyst estimates of $2.98 a share. Company’s shares rose 5.1%.

ViroPharma Inc., pharmaceutical company, said it plans to sell 7 million shares of its common stock in a public offering. The company intends to use the offering's proceeds for working capital and general corporate purposes, and it may also use a portion for its 6% subordinated convertible notes due March 2007. The stock fell 4.5%.

ECONOMIC NEWS

The Department of Commerce released its report on new home sales in the month of October on Tuesday, showing a significant increase in new home sales.

The report showed that new home sales rose 13 percent to a seasonally adjusted annual rate of 1.424 million units in October from an upwardly revised 1.260 million unit rate in September.

Economists had been expecting new home sales to fall to a 1.200 million unit rate compared to the 1.222 million unit rate originally reported in September.

The increase in new home sales reflected strong growth in both the Northeast and the West, with new home sales in each region increasing by more than 40 percent.

Tuesday morning, the Conference Board released its report on consumer confidence in the month of November, showing that its consumer confidence index rebounded after falling in the two previous months.

The report showed that the consumer confidence index rose rather sharply to a reading of 98.9 in November after falling to a reading of 85.2 in October. Economists had expected a more modest increase to a reading of 90.0.