Daily Market Summary 11/28/06

[Portfolio Crafter]

End of Day Market Summary Tuesday 11/28/2006
by Portfolio Crafter
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Stocks closed higher on as investors digested a spate of economic data and remarks from Federal Reserve Chairman Ben Bernanke and came back to the market following yesterday’s sharp losses. However, worries about the economy and a run up in oil prices kept investors on edge.

Today, the Dow Jones industrial average closed up 14.74 or 0.12% to 12,136.45, the broader S&P 500 index closed up 4.82 or 0.35% to 1,386.72, and the Nasdaq composite index closed up 6.69 or 0.28% to 2,412.61.

Market breadth was positive. On the New York Stock Exchange, winners beat losers by more than 21 to 11 on volume of 1.59 billion shares. On the Nasdaq, advancers topped decliners by a narrow margin of 15 to 14 on volume of 1.99 billion shares.

Market woes started with weak reports on manufacturing, housing and consumer confidence. While the economic news was fairly negative, the flip side of that is that it increases speculation that the Federal Reserve will cut interest rates eventually. Hawkish comments from Federal Reserve chairman Ben Bernanke added fuel to fire. He said that the economy is roughly slowing at the pace the central bank had expected, reflecting the slowdown in the housing market. He also said inflation has moderated of late, due in part to the decline in oil and gas prices. However, the level of the "core" inflation, has remained "uncomfortably high."

While the median price of existing homes sold in October fell for the third month in a row. The overall existing home sales rose to a 6.24 million unit rate, against the expected fall to a 6.14 million unit rate. The consumer confidence fell to 102.9 in November, missing the expectations of economists, who thought it would rise to 106. Additionally, orders for durable goods sank 8.3% in October, against the expected drop by 5%. These report raised concerns about a broadening of the economic slowdown, suggesting that businesses may be increasingly cautious, reducing their demand for equipment and software."

Shares of Boeing closed up $0.57 to $87.94, on news that it has received a $5.7 billion order from Air Berlin for 85 jets to be delivered between 2007 and 2014. Air Berlin, said it would order 60 Boeing 737-800 jets. Adding that 25 additional planes would be for its subsidiary DBA, which it bought in August.

Stock of Palm Inc. fell 7.7% to $14.19 after the company slashed its fiscal second-quarter forecast, citing the delayed U.S. rollout of one of the newest versions of its Treo line of handheld smartphones. The Treo 750, which is already selling in Europe, has not been certified in time to sell in the U.S. this quarter.

Shares of Nokia Inc. closed down 1% at $20.09 after it cut its operating margin forecast for the next two years, predicting slower growth in the global phone market. It lowered its overall operating margin outlook to 15%, from a forecast of 17% set in December 2005. This reflects the company's rising exposure to the infrastructure market after the merger of its network unit with Siemens.

Stock of Scottish Power closed down $0.02 to $57.58, after Spain's Iberdrola said that it will buy it for $22.5 billion in cash and shares to create Europe's third-biggest utility and a world leader in renewable energy. The price is slightly below that expected by some analysts. Rumors had suggested the bid could be for as much as £12 billion, so the fact that the actual figure falls short will prove frustrating to investors.

U.S. light crude oil for January delivery rose 67 cents to $60.99 a barrel on the New York Mercantile Exchange. The rise is on speculation that the OPEC could cut output further in a bid to stabilize prices close to $60 a barrel.

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