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Wobbly Wednesday
Major stock gauges end little changed as investors weigh GM, falling oil prices, bond rally.
November 16, 2005: 5:54 PM EST
By Alexandra Twin, CNN/Money staff writer

NEW YORK (CNN/Money) - Stocks were mixed Wednesday as a 6 percent slide in General Motors and a rise in oil prices overshadowed a bond market rally and other positive news on the day.

As of 5:30 p.m. ET, Nasdaq and S&P futures pointed to modest declines at the open Thursday.

The Dow Jones industrial average (down 11.68 to 10,674.76, Charts) lost 0.1 percent. The S&P 500 (up 2.20 to 1,231.21, Charts) index gained 0.2 percent and the Nasdaq composite (up 1.19 to 2,187.93, Charts) closed almost unchanged.

Volume was light, with money going into other asset classes.

Treasury prices rallied, sending yields lower, and the dollar gained versus other major currencies. Oil prices gained, and gold and other precious metals rallied too.

The low trading volume signaled that investors weren't willing to step in near the top of the market's recent range, said Chris Johnson, market strategist at Schaeffer's Investment Research. He said the market has been unable to push past about 1,240 on the Standard & Poor's 500 index as of late.

"The market has been once bitten, twice shy," Johnson said. "We're near the top of this range, and there's no fundamental news to boost us higher."

After the close, Applied Materials (Research) reported quarterly earnings and revenue that fell from a year ago and also issued a current-quarter earnings forecast that is short of estimates.

Thursday brings reads on housing starts, building permits, industrial production and capacity utilization as well as the Philadelphia Fed, a regional read on manufacturing.

Wednesday's market

Stocks had spent the early morning in neutral territory as investors welcomed the mild read on consumer prices. But the tone turned more negative near midday, amid higher oil prices and weakness in select sectors.

On a broader level, investors are caught between competing influences, said Tim Heekin, head of stock trading at Thomas Weisel Partners.

The positives include oil prices that are well off their record highs and hopes that the holiday shopping season will turn out better than expected, he said. The negatives include the reality of a slight pickup in inflation and higher interest rates.

Among standout stock movers, shares of General Motors (down $1.32 to $21.29, Research) slid another 5.8 percent amid ongoing worries about the health of the company's profits and ongoing speculation that it might declare bankruptcy.

Oil prices jumped after the weekly oil inventory report showed smaller-than-expected stockpiles of crude oil and gasoline.

U.S. light crude oil for December jumped 90 cents to settle at $57.88 a barrel on the New York Mercantile Exchange.

Treasury prices rose, lowering the yield on the 10-year note to about 4.47 percent from 4.56 percent late Tuesday. Bond prices and yields move in opposite directions.

The dollar rallied versus the euro and yen.

COMEX gold rallied $10.10 to settle at $479.10 an ounce.

What moved?

The rise in oil prices gave a boost to oil stocks. Transocean (up $2.46 to $59.94, Research) and Baker Hughes (up $1.60 to $54.07, Research) were among the components boosting the Philadelphia Oil Services (Charts) index by close to 3 percent.

Internet stocks were higher. Google (up $5.35 to $398.15, Research) rose after introducing Google Base, its new publishing feature. Yahoo! (up $2.39 to $40.04, Research) jumped too.

Financial stocks slipped after the CEO of American Express (down $0.85 to $50.08, Research), speaking at a Merrill Lynch conference, said that some analysts were being too optimistic about its short-term earnings growth potential. Shares of the Dow component sank 1.7 percent.

Fellow Dow components Pfizer (down $0.52 to $21.37, Research) and McDonald's (down $0.51 to $32.80, Research) also declined.

Also on the downside, networking issues slipped. Adaptec (down $0.25 to $4.45, Research) and Avaya (down $0.37 to $11.04, Research) were among the issues pulling down the Amex Networking (down 2.16 to 226.52, Charts) index.

Tyco International (up $1.10 to $28.50, Research) gained 4 percent and topped the New York Stock Exchange's most-active list after reporting higher quarterly earnings that beat estimates. Tyco also reported flat quarterly revenue that missed estimates and issued a current-quarter earnings per share forecast that is shy of expectations.

Abercrombie & Fitch (up $4.70 to $61.59, Research) shares gained 8.3 percent after reporting improved earnings and revenue late Tuesday that topped estimates. The clothing retailer also boosted its forecast for the full year.

Gilead Sciences (up $3.99 to $55.63, Research) jumped 7.7 percent on news that it had settled a dispute with Roche, its German partner in production of Tamiflu, a drug thought to be the best defense against a potential outbreak of a human version of bird flu.

Market breadth was negative. On the New York Stock Exchange, losers edged winners by a narrow margin as 1.58 billion shares changed hands. On the Nasdaq, decliners topped advancers three to two on volume of 1.72 billion shares.

Prices paid by consumers increased 0.2 percent in October, after rising 1.2 percent in September, which was the biggest increase in 25 years. Wall Street economists expected an unchanged reading.

The so-called "core" CPI, which strips out often volatile food and energy, was up 0.2 percent, in line with forecasts. The core gained 0.1 percent in September. (Full Story)

In other news, the Senate Banking Committee recommended that Ben Bernanke, the Federal Reserve chairman nominee, be confirmed. He is widely expected to be approved by the full Senate, probably in a vote early next year.  Top of page

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