U.S. AVERAGES

A report pointing to a decreased demand for manufactured goods in July, combined with the fresh spike in oil prices, provoked fears on Wall Street that the U.S. economy could be slowing down faster than expected.

After the report Tuesday that marked a drop in July existing home sales, the Department of Commerce announced a steep advance in the month's new home sales.

The airline sector is among the decliners in the early trading, declining 1.3%. Northwest (NWAC: chart) marked the worst performer, losing more than 5%.

Early in Wednesday’s session the Internet sector is also down on the fallout from Baidu's (BIDU: chart) earnings.

The oil service sector is higher by 1.2%, while the disk drive sector is showing a modest advance.

General Motors Corp. (GM: chart) added 2.5% to $34.35 on a report that the United Auto Workers Union is considering helping the world's No. 1 auto maker reduce costs.

Merck (MRK: chart) gained 1.4% to $27.96 after recording losses related to an unfavorable court verdict on its painkiller drug Vioxx.

Google (GOOG: chart) fell $2.16 to $277.42 after announcing that it expects to launch its instant-messaging service Wednesday to let users exchange text messages and make voice calls over their personal computers thus competing the messaging services provided by America Online, Yahoo! and Microsoft. Google Talk is about to enter a difficult battle on the instant-messaging services front as AOL's has already got about 41.6 million U.S. users, followed by Yahoo Messenger with 19.1 million users and MSN Messenger with 14.1 million users.

Ford Motor Co. (F: chart) is to announce a new restructuring plan soon to return its key North American vehicle operations to profitability, according to the company.

Anglo-Australian mining company BHP Billiton’s (BHP: chart) net profit jumped by almost 90% in fiscal 2005 due to strong market conditions, especially in China.

Regis (RGS: chart) posted a 10% increase in 4Q earnings and reiterated its full-year forecast.

ECONOMIC NEWS

U.S. durable goods orders plummeted 4.9% in July, the first decline in four months, according to the Commerce Department report Wednesday morning. Economists had forecasted orders to decline 1.5% in July. Durable orders in June were downwardly revised to a 1.9% rise from a 2.8% increase previously expected.

Sales of new U.S. homes rose 6.5% in July to a record seasonally adjusted annual rate of 1.41 million, the Commerce Department reported Wednesday. Economists had been looking for sales to decline slightly to a 1.33 million pace in July.

INTERNATIONAL MARKET NEWS

Asian markets ended higher as oil prices retreated from recent high levels. Tokyo's Nikkei-225 Index was up by 0.22% to 10,985.33, while Hong Kong's Hang Seng Stock Index gained 1.73% to 12,646.49. Korea's Kospi Index added 0.60% to 792.34, while Australia's All Ordinaries Index finished up 0.13% to 3539.70.

Tokyo closed higher Wednesday, reaching to a new four-year high for the third-straight session due to growing confidence in the country's economic recovery. The Nikkei 225 index added 0.24% percent, to 12,502.26 on the Tokyo Stock Exchange. The broader TOPIX gained 0.28% to 1,275.61.

European shares declined at mid-day Wednesday with mining and metals stocks leading the list of decliners after the results from BHP Billiton and a spike in oil prices. The German DAX 30 lost 0.3% to 4904, the French CAC 40 shed 0.2% to 4428 and the U.K.'s FTSE 100 index dropped 0.2% to 5292.

ENERGY, METALS AND CURRENCIES MARKETS