Stocks close modestly lower, with all major averages down 0.3%-0.4% and ending well off session lows after a late-day rally. Wall Street absorbed mixed economic and earnings reports and remains hestitant to extend the recent rally without more positive signs.
The Federal Reserve's Beige Book report proved more upbeat than its June release. The Fed's snapshot of economic conditions issued Wednesday found that most of the Fed's 12 regions indicated either that the recession was easing or that economic activity had "begun to stabilize, albeit at a low level," the AP reported.
Earlier, stocks extended morning weakness following a worse-than-expected 2.5% decrease in durable-goods orders in June. It was the first decrease in the past three months. Orders rose a revised 1.3% in May, down from the prior estimate of a 1.8% increase. Notably, excluding a 12.8% fall for transportation equipment, durable orders rose 1.1% in June.
Oil futures tumbled nearly 6% to end below $64 a barrel Wednesday after the government reported a much bigger-than-expected buildup in U.S. crude inventories. September closed down $3.88, or 5.8%, to $63.35 a barrel. Weakness continued in after-hours though to a milder degree. On Globex, September crude futures were last down 0.8% to $62.87 a barrel.
The Energy Information Administration reported that crude supplies rose by 5.1 million barrels last week, much more than the 1.1 million barrels expected by analysts surveyed by Platts. Also, ConocoPhillips (
) says it earned $0.87 per share in Q2, above estimates for $0.85. Sales were $35.4 billion, below Thomson Reuters estimates for $39.08 billion.
In company news, Yahoo (
) shares are lower and Microsoft (
) is modestly firmer as the companies confirmed earlier reports they signed a search deal. Microsoft will now power Yahoo! search while Yahoo! will become the exclusive worldwide relationship sales force for both companies' premium search advertisers.
A report on Briefing.com cites an analyst at Kaufman as saying the search deal is already priced into the shares of Yahoo, perhaps some evidence for why the stock shifted lower this morning.
