11:30AM Energy stocks weighed. Tech shares gained on Apple iPhone.
U.S. stock market averages traded down, pressured by further weakness in the oil and gas sector after a petroleum report showed larger-than-expected increases in U.S. gasoline and distillate inventories. ConocoPhillips (COP) dropped 2.5% and Chevron Corp. (CVX) slipped 1.7%. Chevron released a profit warning for the fourth quarter, blaming lower commodity prices. However, declines on the Dow were limited by sharp gains in Alcoa Inc. (AA), which kicked-off the Q4 earnings reporting season by posting 60% profit jump, exceeding analyst estimates. Alcoa shares rose 4%.

On a positive note, tech stocks rose for a second day in a row, boosted by the introduction of Apple Inc.'s (AAPL) new media-playing cell phone. Apple shares were up 4.6%, rising to an all-time intraday high after several brokerages raised their price targets on the stock. Shares of its tech rival Nokia (NOK) slipped 2.4%. In late morning trading, the Dow Jones industrial average fell 24.35, or 0.20%, to 12,392.25. The Standard & Poor's 500 index was down 2.85, or 0.20%, at 1,409.26, and the Nasdaq composite index was off 2.09, or 0.09%, at 2,144.74. Bonds fell following a report that the U.S. trade deficit narrowed in November. The yield on the benchmark 10-year Treasury note rose to 4.69% from 4.66% late Tuesday.

Wholesale inventories rose 1.3% in November.
The Department of Commerce released its report on wholesale trade in the month of November on Wednesday, showing that wholesale inventories increased by much more than economists had been expecting. The report showed that wholesale inventories rose 1.3 percent in November following a downwardly revised 0.4 percent increase in October. Economists had expected inventories to increase by 0.5 percent compared to the 0.8 percent increase originally reported for the previous month. The bigger than expected increase in wholesale inventories was partly due to a 2.8 percent increase in inventories of non-durable goods, which came amid a 13 percent increase in inventories of farm product raw materials. The report also showed that wholesales rebounded by 1.0 percent in November after falling 0.4 percent in October. The increase came as wholesale sales of durable goods rose 1.2 percent, while wholesale sales of non-durable goods rose 0.7 percent. Subsequently, the Commerce Department said that the inventories/sales ratio edged up to 1.20 in November from 1.19 in October. The ratio came in at 1.17 in November of 2005.


10:30AM NY – 9:30PM Mumbai The Sensex shed 1.5% in a fifth straight day of losses.
The Sensex on BSE finished 204.17 points, or 1.5%, lower at 13,362.16, the lowest close since December 20th, 2006. The market-breadth was weak as 1,699 shares declined on BSE, 942 rose and only 45 shares were unchanged. For every advancer, there were almost two decliners. Of the 30 stocks in the Sensex only two advanced, while the rest declined. The turnover on BSE was Rs 3,632 crore, lower than Rs 5,167 crore on Tuesday. On NSE, the turnover was Rs 8,572.23 crore, compared to Rs 8,806.52 crore on Tuesday.

Economic news

New York Stock Exchange will buy 20% of the National Stock Exchange of India, together with Goldman Sachs and two other private equity funds for $490 million. The agreement was signed on Wednesday, valuing largest bourse in the country at about $2.5 billion.

Vodafone Group intends to become a key player in the mobile market in India. Wednesday, Vodafone would submit a formal bid to buy Hutchison Essar, the fourth-largest carrier in the country, Chief Executive Arun Sarin stated after meeting Trade Minister Kamal Nath. Following Vodafone, rival bidder Essar Group started on Wednesday due diligence, while another potential suitor Reliance Communications would begin the process Thursday.

Domestic car sales advanced 23% in December from a year earlier, the Society of Indian Automobile Manufacturers announced on Wednesday.

Trading highlights

New issue Shree Ashtavinayak was the most-active stock on BSE today with a turnover of Rs 364 crore followed by Pyramid Saimira and Reliance Communications.

Advancers

There were only two prominent advancers on BSE on Wednesday. Wipro gained 2.2% to Rs 594 and Satyam Computer edged 0.03% higher to Rs 467.90.

Shree Ashtavinayak Cine Vision ended at Rs 226.50 on its debut on Wednesday, topping its issue price of Rs 160. IFCI surged 21.6% to Rs 16.40 in the wake of its, along with other shareholders, selling of part of their holdings in the National Stock Exchange to NYSE Group and other foreign investors.

Decliners

Power equipment maker BHEL led the decliners, down 4.5% to Rs 2,146. Banks were under heavy selling pressure. ICICI Bank, with a 9.3% weight in the Sensex, shed 3% to Rs 883. State Bank of India plunged 3.3% to Rs 1,135. HDFC Bank declined 1.5% to Rs 998. HDFC Bank starts Q3 results tomorrow.

Oil leader ONGC declined 3% to Rs 890 and Cairn India shed almost 3% to Rs 133.55 on a high volume of 75.7 lakh shares traded on BSE. Telecoms were also badly hit with Reliance Communications leading the decliners in the sector, down 3.5% to Rs 408 in spite of 1.4 million new mobile subscribers in December 2006. Bharti Airtel lost 2% to Rs 611.

Although Wipro and Satyam Computer gained, TCS was down 1.7% to Rs 1,234 and Infosys also edged 0.2% lower to Rs 2,185.70. Infosys starts the Q3 earnings season tomorrow. The guidance is of between 4.1% - 7.3% growth in Q3 consolidated net profit of the company.

Cement stocks, managed to recover from the intra-day lows. Gujarat Ambuja Cements closed 0.3% down at Rs 139, off its low of Rs 136.10. Grasim shed 0.6% to Rs 2,809, off its low of Rs 2,757.50. Index heavy, Reliance Industries lost 0.7% to Rs 1,271.50.