U.S. MARKET AVERAGES

Market averages were sensitive to oil and earnings.

Market averages for the most part traded in the positive are but with little conviction and support from the volume. Program trading drove most of the trading during day. Oil price remained volatile during the day as traders responded to the oil inventory data released by the government. The initial reaction of the traders to sell was soon overcome as traders reconsidered the small fall in the distillate inventories. At close, oil prices and stocks in the sector rose by a modest amount.

U.S. dollar has risen close to 12% against Euro for the year and continued its climb against Euro and Japanese Yen for the day. Talk of higher interest rates in the U.S. has only strengthened the case for the U.S. dollar. However the twin deficit, budget and trade deficit may come back to haunt the dollar.


The gold sector has extended gains of the week and for the day up 1.8%. However, the sector remains comfortably within a recent trading range. Bank and broker/dealer stocks are showing modest gains as well.

The disk drive sector which has recently been volatile, is continuing falling and is now showing decline of 1.3%. The housing space is easing lower, extending Tuesday's sell off.

King Pharmaceuticals (KG: chart) has jumped to a new 52-week high on quarterly results. Pixar (PIXR: chart) and Hansen Natural (HANS: chart) have reached new peaks on the back of strong earnings reports.

In contrast, Marvel Entertainment (MVL: chart) has dropped sharply to a new 52-week low on earnings release EchoStar (DISH: chart), which has been falling since mid-September is setting a fresh nadir, additionally dragged by disappointing quarterly results.

PepsiCo reduced its year-end forecast and announced it will restructure some operations to cut costs. PepsiCo said the changes will cost $65 million to $85 million before taxes, or 3 cents per share.

Federated Department Stores Inc., operator of the Macy's and Bloomingdale's department store chains, rose 5% after it reaffirmed its financial forecast for the fourth quarter and reported that its third-quarter profit climbed more than fivefold from last year, aided by a large gain from an asset sale.

Pixar Animation Studios Inc. (PIXR: chart) reported Tuesday a rise in quarterly profit and revenue above Wall Street expectations. Its shares jumped 11% at the close.

American International Group Inc. (AIG: chart), the world's largest insurer by market value, said it will delay the release of its third-quarter results until November 14, giving it time to correct errors.

MOVERS AND SHAKERS

The comic book licensor Marvel Entertainment (MVL: chart) posted a 29% decrease in third-quarter net income and projected a sharp profit drop, within a range of $0.37-$0.52 a share, in 2006. The company’s stock lost almost 24%.

The insurer AIG (AIG: chart) announced it will have to review its financial results again and will delay its 10-Q filing by five days, after finding errors that resulted in a $500 million understatement of third-quarter results. AIG will restate results for the years ended December 31, 2004, 2003 and 2002, along with selected data for 2001 and 2000 and quarterly financial results for 2004 and the first two quarters of 2005. The company’s stock fell 1.4%.

The animation studio Pixar (PIXR: chart) reported quarterly earnings that came above the estimates, resulted from a higher gain from its film library. The company’s stock soared 6.3%.

Home Depot (HD: chart) was upgraded by the financial broker Piper Jaffray. The company’s stock was up 1%.

ECONOMIC NEWS

Crude oil inventories advanced again in the latest week, according to government data released Wednesday, continuing a recent streak of gains. Stocks of gasoline climbed as well.