U.S. stocks slip; oil-inventory data are mixed

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U.S. stocks slipped Wednesday, led by consumer and energy sectors, as preliminary oil-inventory data were mixed.

After slipping in and out of the red, the Dow Jones Industrial Average (INDU) was down 11 points, or 0.1 percent, to 10,534 in recent trading. Microsoft Corp. (MSFT) was the Dow’s worst performer, off 1.1 percent. Several financial components were also weak, including Bank of America Corp. (BAC) and American Express Co. (AXP). Bank of America fell 0.6 percent, and American Express declined 0.8 percent.

The Nasdaq Composite Index (COMP) dropped 0.3 percent. The Standard & Poor’s 500 Index (SPX) slipped 0.3 percent. The consumer-discretionary sector was the S&P 500’s worst-performing category, while energy and financials weren’t far behind.

Energy companies lagged as traders weighed mixed oil-inventory reports. U.S. crude inventories fell last week by slightly less than analysts expected, according to data released Wednesday by the U.S. Department of Energy. It was the fourth decline in a row.

However, after the market closed Tuesday, the American Petroleum Institute reported a 1.7-million-barrel increase in U.S. oil inventories in the week ended Dec. 25. The price of oil rose recently to slightly more than $79 a barrel.

The financial sector’s decliners followed a Wall Street Journal report on GMAC Financial Services, which reminded investors of the sector’s remaining troubles. The Journal report said GMAC is close to getting $3.5 billion in fresh government aid, on top of the $12.5 billion in support it has already received.

In other markets, the dollar strengthened against both the euro and the yen. Treasurys showed little change, with the 10-year note up 1/32 recently at 3.799 percent.

The market opened lower Wednesday, though its early losses were checked after data on Chicago-area manufacturing came in better than expected. Manufacturing activity in the Federal Reserve Bank of Kansas City’s district expanded in December, but at a slower pace than November, the regional Fed said Wednesday.

Much of the week’s economic data, including Tuesday’s housing and consumer-confidence reports, should be considered in the context of the broader economy, said Greg Walker, managing director of J.P. Morgan’s private bank.

"There’s some seasonal elements to some of the data. Especially with such a choppy year, that seasonal element can be magnified," Walker said. "There’s going to be a little more noise in the data, and one shouldn’t react so much to the noise as to the trend" of gradually stabilizing employment and economic recovery.

The latest action comes after stocks fell slightly Tuesday, snapping a six-session winning streak despite data that showed the highest level of consumer confidence since December 2007 and the slowest year-on-year house-price decline in two years. However, volume was particularly light, and traders cautioned against interpreting much from the market’s moves Tuesday.

Trading volume is expected to be even lighter for the rest of the week ahead of the New Year’s Day holiday Friday.

Among stocks in focus, Aetna Inc. (AET) shares fell 2 percent after the health insurer said it will take a fourth-quarter charge of about $60 million to $65 million. The charge is to account for previously announced job cuts and real estate consolidations, as well as workforce reductions in the first quarter of 2010.

Still to come Wednesday is the final U.S. government auction of the year, $32 billion in 7-year notes.


(c) 2009, MarketWatch.com Inc. Source: McClatchy-Tribune Information Services.