U.S. MARKET AVERAGES

Hectic day of deals.

It was a day of four deals reported by IBM Corp, Segate Technologies, Google Inc and Allergan Inc. Steady pace of deals have been reported in the market for the last three quarters as companies rising earnings are reinvesting profits to expand markets.

Commerce Department lowered the read on the third quarter gross domestic product to 4.1% from 4.3%. Healthy growth in the economy was another report that market has received during this week. After better than expected inflation at wholesale level and stronger than expected housing market reported yesterday, market digested another round of news on GDP and rise in nation’s stockpile of oil and gas.

Positive earnings news from FedEx, Factset Research and Joy Global Inc. supported mild rally in the broader market and tech averages. Weakness in General Motors persisted on the news that Tracinda Corp, investment arm controlled by investor Kirk Kerkorian reduced its holdings of the stock by 20%. General Motors (GM: chart) dropped by 80 cents to $19.10.


MOVERS AND SHAKERS

Seagate Technology (STX: chart) agreed to offer $1.9 billion of its shares for rival hard disk maker Maxtor Corp (MXO: chart) in a deal expected to lift earnings by 20% in the first year after completion. Seagate said it expects revenue attrition, but sees $300 million in annual operating expenses from greater scale, reduced supply chain costs, and combined R&D efforts. Seagate also reaffirmed December and fiscal 2006 guidance. Maxtor’s shares climbed 48%.

Shipping company FedEx Corp reported second-quarter 33% jump in profit of $1.53 per share vs. $1.15 a year ago on 10% revenue growth, easily beating its own and Wall Street''s expectations. The strong quarterly results are due to higher demand for its services and lower advertising costs. The stock rose 3.2%.

Family Dollar Stores (FDO: chart) reported Q1 profit of $51.4 million, or 32 cents a share, from $54.4 million, or 32 cents, a year ago, beating estimates of 31 cents a share. Earnings per share remained flat despite the decline in net income because there were fewer shares outstanding. Sales advanced to $1.51 billion from $1.38 billion in last year''s first quarter. The discount retailer forecast Q2 earnings of 45 cents to 50 cents a share and full-year earnings at $1.30 to $1.39 a share. Company’s shares rose 3.8%.

GSI Group Inc (GSIG: chart) , a supplier of precision motion components, lasers and laser systems said that it authorized a stock repurchase program of up to 1.5 million shares. GSI shares rose 2.9%.

Nike Inc. (NKE: chart) , footwear and apparel company, reported Q2 profit rise of 15%, or $1.14 a share, up from 97 cents in the year-ago period on 10% revenue growth, beating estimates by 11 cents a share, but the company also reported a sharp slowdown in orders scheduled for future delivery. The stock dropped 5.2%.
ECONOMIC NEWS

Crude oil inventories recorded another build in the latest week, according to government statistics released Wednesday, but stocks of gasoline and distillate fuel oil experienced a draw down.

The Department of Energy''s Energy Information Administration revealed that crude oil inventories rose by 1.3 million barrels for the week ended December 16, climbing to 322.5 million barrels from the prior week''s level of 321.2 million barrels. This followed an advance of 900,000 barrels in the previous week. Oil inventories were 12.4% higher than their levels of the same time last year.

Gasoline inventories also posted a week-over-week decline of 300,000 barrels, the government said, compared to the previous week''s 1.8-million-barrel advance. Gasoline stocks were 4.8% below their levels of last year. Inventories of distillate fuel oil fell by 2.8 million barrels in the most recent week.

Wednesday morning, the Department of Commerce released its final report on third quarter gross domestic product, showing that GDP growth was downwardly revised. The downward revision came as a surprise to economists.

The report showed that third quarter GDP rose at an annual rate of 4.1 percent, down from the previous estimate of 4.3 percent, although still above the 3.3 percent growth seen in the second quarter. Economists had expected third quarter GDP growth to be unrevised.

The Commerce Dept. said that the lower than previously reported growth reflected a downward revision to consumer spending for durable goods as well as several other smaller downward revisions that were partly offset by an upward revision to exports of services.

Despite the downward revision, the third quarter GDP growth remained the strongest rate of growth since the first quarter of 2004. The growth reflected strong consumer spending, equipment and software spending, federal government spending, and residential fixed investment.

However, the report also showed that the index of consumer prices excluding food and energy rose 1.4 percent in the third quarter, an upward revision from the previous estimate of 1.2 percent growth. The price growth still remained below the 1.7 percent increase seen in the second quarter.