Quiet trading for stocks Wednesday with the major market indices experiencing mild declines. The Dow ($INDU) gave up 15.14 points Wednesday to close at 12,192.45. The S&P 500 ($SPX) fell 3.44 points to 1,391.97. The NASDAQ ($COMPQ) declined 10.50 points to close at 2,374.64. Volume was lighter on the session with the NYSE trading 1.71 billion shares and the Naz turning over 2.00 billion shares. Market breadth was flat on the Big Board and negative by a 13-to-17 margin on the Naz.
The Beige Book report didn't create a change in stocks this afternoon with the data mostly in line with expectations. The 12 Fed districts reported that economic growth is moderate and it is slowing some in some districts. The report also stated that labor markets remain tight for skilled workers. Overall, the data did not point to a recession like some fear. Comments from former Fed Chairman Greenspan that the economic has a 33 percent chance of seeing a recession has been disconcerting.
Oil prices were a negative for stocks today with crude rising $1.13 a barrel to $61.82. The weekly inventory data showed a decline of 4.8 million barrels, which was more than expected. Distillates and gasoline reserves also continued to decline. Despite the fact there are concerns about a slowing in the global economy, oil prices have been able to hold above support at $60. Gains in crude pushed the Oil Services ($OSX) index higher by two percent.
Despite a decline in the Dow today, shares of Boeing (BA), Caterpillar (CAT) and Hewlett-Packard (HPQ) all saw gains of about one percent. At the same time, the housing sector got some good news from Toll Brothers (TOL). The home builder stated that it will work through its excess inventory within the next five months. As a result, TOL shares tacked on 1.5 percent.
Sub-prime lenders continued to suffer today with Accredited Home Lenders (LEND) shares falling 2.2 percent. However, this was well off the lows the stock saw earlier in the session when it was down nearly 9 percent. Shares of Freddie Mac (FRE) and Fannie Mae (FNM) continued to struggle today after negative comments about the two companies from Fed Chairman Bernanke on Tuesday.
The bulls have to be pleased that Tuesday's gains were not erased today. Volatility calmed down Wednesday and could stay that way until Friday's employment report data is released. So far, support for the Dow at 12,000 has held and this is a positive for the bulls.
Senior Staff Writer & Options Strategist
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