The markets took investors on a rollercoaster ride Wednesday, as rising oil ended chances of a broad based rally after a string of strong earnings. The Dow Jones Industrial Average lost 20.40 points (-0.15%), Standard & Poor's 500 index increased 2.71 points (+0.18%), and the Nasdaq finished strong, up 28.76 points (1.04%). Volume on the NYSE was somewhat high at 1.42 billion shares, and decliners and advancers nearly matched 1:1.
Several pieces of economic data hit the headlines, starting with housing starts. The Commerce Department announced housing starts had slipped 10%, even more disappointing than economists predicted. The levels were the lowest in 14 years (full story). CPI was in-line with forecasts, and the core CPI, which does not include food and energy, increased 2.1%for the year (full story). The Fed usually likes the number to be under 2%. The Fed's beige book was released in the afternoon, reporting manufacturing and service sectors were experiencing weakening growth because of the housing slump and credit turmoil. The US 10-year jumped up 24/32, pushing yields down 4.55%.
Sectors echoed the mixed results from the day as half finished positive and half ended negative. Tech (1.5%) had the strongest day. After the bell Tuesday, Yahoo, Intel, and IBM all reported. IBM (-3.2%) beat estimates, but said sales of servers and hardware decreased (full story). Yahoo (+8.0%) and Intel (+4.9%) both posted solid quarters and were the catalysts to the NQ's strong performance Wednesday (full Yahoo and Intel stories). Also, JP Morgan (+2.8%) and Coke (+2.3%) reported Wednesday morning and both topped estimates (full JP Morgan and Coke stories). Finally, United Technologies (-3.6%) did beat estimates, but fell because of its disappointing outlook for 2008 (full story).
EBay (+5.2%) reported right after the bell and swung a loss, however shares were up on the strong guidance issued by the company (full story). Tomorrow should be busy as well with Jobless Claims (8:30 AM), Leading Indicators (10:00 AM), and the Philadelphia Fed Survey (12:00 PM) all expected to be released. In addition, Bank of America, AMD, Capital One, Google, Nokia, Pfizer, and many more companies are set to report their last fiscal quarters. Expect more volatility ahead.
Commentary: What's Causing the Pop 'n Drop Pattern in Global Markets? • Major Indexes Continue To Meet Overhead Resistance
Stocks to watch: IBM, YHOO, INTC, JPM, KO, UTX, EBAY