U.S. MARKET AVERAGES
U.S. stock averages opened slightly higher but without a significant market driver, the major averages failed to sustain the advance. Apparently the market lacks vigor as it has been in an exhausting rally for a month already. The three major averages are currently posting modest losses only, hurt by an increase in oil prices.
The only significant data expected Wednesday was news on oil inventories and a mid-quarter business update from Texas Instruments after the close of regular trading.
On the back of higher oil prices, currently about $60.50 a barrel, energy stocks advanced. The natural gas and oil service sectors rose a little less than 1%.
The housing sector moved lower, falling by 1% despite data from the Mortgage Bankers Association that showed an increase in mortgage loan application volume in the most recent week. Airline stocks also moved to the downside, reflecting rising oil prices.
Hurco (
HURC: chart) sharply advanced after it reported a significant rise in fourth-quarter earnings. The stock rose nearly 20%.
PW Eagle (
PWEI: chart) sharply moved to the downside after it completed an $18.75 million private equity placement. The stock fell 9%.
In corporate news,
Microsoft Corp (
MSFT: chart) was ordered to separate its instant messaging service from its Windows software and allow rival products on its system in South Korea after losing an antitrust case. Microsoft Corp. rose 3 cents to $27.72 after Chairman Bill Gates said the company plans to add 3,000 jobs in India over the next three to four years, nearly doubling its work force in the country.
In the first hour of trading, the Dow Jones industrial average rose 4.64, or 0.04%. The Standard & Poor''s 500 index rose 1.15, or 0.09%, and the Nasdaq composite index rose 3.37, or 0.15%.
Bonds rose, with the yield on the 10-year Treasury note falling to 4.44% from 4.48% late Tuesday.
MOVERS AND SHAKERS
Cisco Systems (
CSCO: chart) reaffirmed its long-term growth forecast. Consequently, J.P. Morgan upgraded the company from neutral to overweight. The stock rose 2.4%.
SigmaTel (
SGTL: chart) was downgraded to peer perform from outperform on evidence that the company's fourth-quarter is tracking toward the low end of expectations and even lower due to increased competition, weaker demand, and market pressure from Apple. Company’s shares dropped 8.4%.
SimpleTech Inc (
STEC: chart), memory chip maker, cut its fourth-quarter revenue forecast and said earnings per share will come below its previous outlook. The company sees its revenue in the range of $60 million to $63 million, compared with its previous outlook of $70 million. The stock slid 9.7%.
ECONOMIC NEWS
Coming back from the previous week's sharp declines,
crude oil inventories advanced in the latest week, according to government data released Wednesday. Stocks of gasoline also moved higher.
The Department of Energy's Energy Information Administration revealed that crude oil inventories rose by 2.7 million barrels for the week ended December 2, climbing to 320.3 million barrels from the prior week's level of 317.6 million barrels. This followed a decline of 4.2 million barrels in the previous week. Oil inventories were 11.1% higher than their levels of the same time last year.
Gasoline inventories also posted a week-over-week advance of 2.7 million barrels, the government said, compared to the previous week's 500,000-barrel slide. Gasoline stocks were 4.3% below their levels of last year. Inventories of distillate fuel oil rose by 2.7 million barrels as well in the most recent week.
INTERNATIONAL MARKET NEWS
Asian-Pacific benchmarks closed higher, supported by U.S. markets gains overnight. The Nikkei helped the upside momentum, recovering from yesterday’s losses and rising 0.4% ahead of economic data Friday. Across the region Indonesian Jakarta Composite surged 2.5%, Hong Kong’s Hang Seng rose 1%, while South Korea’s Kospi gained 0.3%, reaching a new high on tech stocks.
