Wednesday Wrap - Dow -1.62%, S&P -1.59%, NQ -1.33%

by: Roy Mehta

Stocks lost more ground Monday as investors ran to safer assets. The Dow Jones Industrial Average lost 211.1 points (-1.6%), Standard & Poor's 500 index fell 22.9 points (-1.6%), and the Nasdaq decreased 34.66 points (-1.33%). Volume on the NYSE was light before the holiday at 1.35 billion shares, and decliners controlled advancers by a ratio of 2:1.

The US 10-year Treasury was up 23/32 in price, pushing yields down to 4.01%. During the trading session, yields touched 3.98%, the lowest in two years. Crude hit an all-time high of $99.29 Tuesday night, but profit takers pushed the price down to finish $0.38 lower to $97.65, despite crude inventories coming in lighter than expected. The Labor Department said initial job claims fell by 11,000 last week, in-line with estimates. The University of Michigan announced its consumer sentiment fell to 76.1, which was better than expected. Leading indicators also came in better than expected at 0.5%. Also, Reuters reported that Treasury Secretary Henry Paulson said he sees home default rates increasing in 2008, helping to push the market down (full story).

No sectors were spared from Wednesday's fall, as all finished negative including utilities (-0.53%). Several retailers reported earnings Wednesday. Abercrombie & Fitch (+2.7%) reported a 15% increase in quarterly earnings and talked about international expansion (full story). Gap (-6.1%) lost ground after reporting flat sales and a disappointing outlook for the year (full story). Limited (+2.4%) was up despite posting a 48% drop in earnings and issuing a soft guidance (full story). Whole Foods (-0.5%) reported a 15% drop in its fiscal fourth-quarter earnings because of its acquisition of Wild Oats, but matched estimates excluding the charges (full story). Also, Deere (+4.9%) reported net income jumped 52% because of strong overseas demand (full story).

No significant economic news will be released in the next two days. Have a great Thanksgiving.

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