U.S. MARKET AVERAGES

The three major averages have extended early losses to trade in the negative territory with the Nasdaq being the most conspicuous decliner, falling by 1%. Recently selling activity has resumed, but as a whole the market has been nervous throughout the session, lacking leadership and weighing rising crude oil prices. Other drags on the market sentiment were tech stocks Apple Computer and Intel. The first released disappointing quarterly revenue which raised concerns about corporate profits and the second was downgraded by analysts. Among the few bright spots of today are Pfizer, which climbed after a British judge ruled to protect the company's patent on the cholesterol drug Lipitor, and Harley-Davidson, which released better-than-anticipated Q3 results.

On the economic news front, Greenspan delivered a speech early Wednesday, but it did not prove enough to instill confidence in a stock market that's dropped sharply since the start of the fourth quarter. He pointed that due to a remarkable increase in the flexibility of the U.S. economy, it succeeded in recovering from shocks, such as stock market crashes, credit crunches, terrorism, and hurricanes and the steep rise in spot and futures prices for oil and natural gas.The Fed Reserve Chairman did not comment specifically on interest rates increases, but his comments suggested that the strong U.S. economy could handle them.

The drug sector is the most notable gainer of the day, boosted by Pfizer (PFE: chart), which rose on news of a positive patent ruling by a British court.

The computer hardware sector is declining in early trading, largely due to a decline in Apple Computer Inc (AAPL: chart).The disk drive sector fell steadily throughout the session and is now down about 2.3%. SanDisk (SNDK: chart) is the worst performer in the group, dropping by 7.6%. Retail, housing and gaming stocks are other notable decliners. Energy service sector is currently down 1.2% on profit taking. Consumer Discretionary has fallen by 1.1% on concerns about a slowdown in discretionary spending.

Very few notable stocks are reaching new 52-week highs on Wednesday, though Titan International (TWI: chart) has moved to a new peak on its receipt of a takeover offer.

A large number of stocks are setting new 52-week lows, including Krispy Kreme (KKD: chart), posting a 20% decline. Pier 1 Imports (PIR: chart) and ribune Co. (TRB: chart) are other stocks reaching new lows. Dow components American Express (AXP: chart) and SBC (SBC: chart) have also set new nadirs.

Bonds fell for a second session, with the yield on the 10-year Treasury note rising to 4.42% from 4.39% late Tuesday.

MOVERS AND SHAKERS

Apple (AAPL: chart) reported yesterday fiscal fourth-quarter profit that rose four times as a result of increasing sales of iPod music players and Macintosh PC's, but revenue was behind expectations. In the quarter ended September 24, Apple earned $430 million, or 50 cents a share, on $3.69 billion in sales, compared to a-year-earlier period, when it earned $106 million, or 13 cents a share, on sales of $2.35 billion. Apple dropped 3.4%.

Advanced Micro Devices (AMD: chart) posted a higher-than-expected third-quarter profit, but the company’s stock dropped 11.8% due in part to concerns over valuation. Advanced Micro said that net income rose 73% to $76 million, or 18 cents a share, up from $44 million, or 12 cents, in the same period for 2004. Revenue rose 23% to $1.52 billion.

Motorcycle maker Harley-Davidson (HDI: chart) exceeded analysts forecasts with almost 16% year-over-year increase in third-quarter profits. The company posted third-quarter earnings of $265 million, or 96 cents a share, up from $229 million, or 77 cents a share, in the same period for 2004. Revenue increased in the three months ended September 25 to $1.43 billion from $1.3 billion in 2004. The Milwaukee-based company’s stock added 1.3%.

Chip maker Intel (INTC: chart) dropped 2.2% after the company was downgraded at Prudential to “underweight” from “neutral”. The broker cited problems that may hurt revenue and margins. Prudential also cut its sector rating on chips to “unfavorable”.

Bed, Bath & Beyond (BBBY: chart) was downgraded at CS First Boston to “neutral” from “outperform”. The company is down 2.2%.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks closed mostly down after the Nikkei fell off a four-year intraday high to close down 0.7%, reflecting consumer confidence decline in September and a decision of the Bank of Japan to leave monetary policy unchanged. Across the region, South Korea’s Kospi tumbled 2.2% on tech shares sell-off after LG Philips released lowered earnings outlook. Shares in Hong Hong dropped 2.2%, while in Australia gained 0.8%.

European markets fell across the region on mixed corporate news and crude oil prices, keeping above $63 a barrel. The German DAX 30 lost 0.3%, the French CAC 40 slipped 0.1%, and London’s FTSE 100 shed 0.3%. The euro slightly advanced against the dollar to trade at $1.2027.

ENERGY, METALS, CURRENCIES

Oil prices hover near $64 a barrel on IEA’s global demand outlook and winter supply concerns. Light sweet crude for November delivery gained 47 cents to trade at $64 a barrel on the Nymex.

In European trading gold prices declined from recent highs. In London gold December contract closed at $475.60 per troy ounce, down from $476.05. In Hong Kong gold fell 30 cents to $478.25. Silver closed at $7.83, down from $7.85.

In European trading the U.S. dollar lost ground against its major counterparts after a 17-month high against the yen. The dollar’s decline came ahead of U.S. trade figures Thursday and after Fed Reserve Chairman’s speech. The euro was quoted at $1.2024, up from $1.9993. The dollar changed hands at 114.40 yen, down from 114.42. The British pound was trading at $1.7518, up from $1.7457.