Worries about the economy

NEW YORK (CNNMoney.com) -- Stocks inched lower near midday Wednesday as a pair of weaker-than-expected economic reports overshadowed the session's positive corporate news and slide in oil prices.

The Dow Jones industrial average (down 27.29 to 12,054.64, Charts) lost 0.2 percent more than 2-1/2 hours into the session. The blue-chip barometer has closed at record highs in 13 of the previous 21 sessions.

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The broader S&P 500 (down 3.40 to 1,374.54, Charts) index lost 0.3 percent. The tech-fueled Nasdaq composite (down 8.32 to 2,358.39, Charts) lost nearly 0.4 percent. Both indexes hit more than 5-1/2 year highs last week.

Stocks rose at the open Wednesday, as investor welcomed falling oil prices and some merger news. But the market lost some steam following the release of the morning economic reports.

The ISM manufacturing report showed a surprise dip in October.

Released at around the same time, another report showed that construction spending fell 0.3 percent in September, a bigger dip than what economists were expecting.

An earlier report from ADP Employer Services showed that employers added around 128,000 jobs to their payrolls in October, providing an optimistic sign for Friday's widely-watched government employment release.

But after several days of weak economic news, investors opted to focus on the negative, particularly after the market's recent run, said Timothy Ghriskey, chief investment officer at Solaris Asset Management.

"We've seen a number of reports showing a weaker economy and I think that's why we've seen the market selloff over the last few days, despite strong earnings, lower oil prices and some merger news today," Ghriskey said.

However, he said that any pullback would be healthy in light of the market's recent run, and stocks should be able to recharge going forward.

In corporate news, Time Warner (down $0.06 to $19.95, Charts) reported quarterly sales and earnings that rose from a year ago, but were shy of forecasts. The parent of CNNMoney also reaffirmed its profit outlook for the full year. Shares were barely lower at midday after falling 2 percent in the morning.

Shares of MasterCard (up $12.05 to $86.15, Charts), the credit card association, rallied 15 percent in active NYSE trading after reporting quarterly earnings and sales that surged from a year earlier and beat estimates.

Garmin (down $7.64 to $45.77, Charts), a maker of navigational devices, slumped over 14 percent in active Nasdaq trading after reporting quarterly revenue that rose from a year ago, but missed analysts' expectations. The company also reported higher quarterly earnings that met estimates.

In possible merger news, drugstore CVS and Caremark, a pharmacy benefits manager, said that they were in talks to form a so-called merger of equals. Shares of CVS (down $2.52 to $28.86, Charts) slumped nearly 6 percent, while Caremark (up $1.21 to $50.44, Charts) rose 3.5 percent.

In the printing services industry, R.R. Donnelley & Sons (down $0.06 to $33.80, Charts) said it will buy rival Banta (up $7.92 to $52.20, Charts) for $1.3 billion in cash.

Market breadth was negative. On the New York Stock Exchange, losers edged winners eight to seven on volume of 750 million shares. On the Nasdaq, decliners beat advancers three to two on volume of 860 million shares.

Stocks were mixed Tuesday after disappointing reads on consumer confidence and manufacturing in the Midwest sparked worries about the economy. But the declines were modest at the end of an otherwise strong month - and an unusually strong October - on Wall Street.

U.S. light crude oil for December delivery fell 68 cents to $58.05 a barrel on the New York Mercantile Exchange. The price of oil was volatile after the release of a mixed weekly oil inventories report.

Treasury prices rose, lowering the yield on the 10-year note to 4.57 percent from around 4.61 percent late Tuesday. Bond prices and yields move in opposite directions.

In currency trading, the dollar edged higher versus the euro and the yen.

COMEX gold for December delivery added $9.70 to $616.50 an ounce.

Beware choppy waters ahead

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