U.S. MARKET AVERAGES

Throughout the morning session stock averages have kept trading within a narrow range, just below the flat line, as markets haven’t succeeded in continuing yesterday’s rally, fuelled by the announcement of Ben Bernanke’s nomination to succeed Fed Reserve Chairman Alan Greenspan. Disappointing fourth-quarter guidance from semiconductor Texas Instruments weighed on the market sentiment, adding to investors’ concerns about a slowing economy and lower corproate earnings. The 7.5% decline of the stock caused broad-based selling across the tech sector.

Tech stocks have extended intraday lows with the disk drive space currently down about 1.5%. Computer hardware and Internet stocks are also posting losses. The retail space has further declined.

The gold sector is among the day's best performers with a gain of 2.8%. Energy and transportation stocks have come off earlier highs. The oil service space is now higher by less than 1%.

Among the gaining stocks, JDA Software (JDAS: chart) is rallying 9% on earnings report, breaking to a new 52-week high. W.R. Berkley (BER: chart) was also helped to reach a fresh peak by earnings news. Arch Coal (ACI: chart) is extending its earnings-inspired advance and adding to its high.

A number of stocks have fallen to new 52-week lows on earnings news. Altera (ALTR: chart) and Lexmark (LXK: chart), PRIMEDIA (PRM: chart) have dropped on lowered guidance.

The Conference Board revealed that its index of consumer confidence dropped to 85 in October, compared to the 87.5 recorded for September. But the decline came with little surprise and on account of high energy prices. The economists were generally expecting the index to bounce back from September's slide to a level of about 89.

Information on existing home sales was also released. For September, the measure came in unchanged from August's revised rate of 7.28 million units. Economists had expected a dip to a rate around 7.25 million units.

In corporate news, an investor group led by Merrill Lynch (MER: chart) is said to be interested in acquiring bankrupt Refco's futures brokerage.

MOVERS AND SHAKERS

Texas Instruments (TXN: chart) posted a 12% increase in third-quarter net income, but announced a fourth-quarter sales prediction that disappointed some investors and revealed a demand issue. The company’s stock lost 7.5%.

Chemical giant DuPont (DD: chart) reported a third-quarter loss of $82 million and narrowed fourth-quarter earnings forecast. The company said this third-quarter loss came largely due to tax and hurricane-related charges. DuPont earned $331 million in the same period a year ago. The company’s stock is up 4%.

Dow component Intel Corp. (INTC: chart) announced it will postpone the launch of one of its chips for the corporate server market to work on the design. The company’s stock fell 0.4%.

Ameritrade (AMTD: chart) may have to fix earnings for several past periods because of some hedging transactions the company made in 2003. Ameritrade’s stock dropped 0.6%.

Northrop Grumman (NOC: chart) said its third-quarter earnings fell slightly below a year-ago positions, citing damages from the recent hurricanes. The company expects earnings from continuing operations in 2006 to reach $4.10-$4.30 a share on sales of about $32 billion. Northrop is likely to be active today.

ECONOMIC NEWS

Consumer confidence continued to deteriorate in the month of October, according to a report from the Conference Board, surprising economists who had expected some improvement following a steep drop in September.

The Conference Board said that its consumer confidence index fell to 85.0 in October from an upwardly revised 87.5 in September. Economists had been expecting the index to increase to 89.0 compared to the 86.6 originally reported for September.

Lynn Franco, Director of the Conference Board Consumer Research Center said, “Much of the decline in confidence over the past two months can be attributed to the recent hurricanes, pump shock and a weakening labor market.”

The report showed that the drop by the consumer confidence index came as the present situation index fell to 108.2 in October from 110.4 in September while the expectations index decreased to 69.5 in October from 72.3 last month.