11:30AM Market turned higher on weaker economic data.
The Dow hit an all-time intraday high, as stocks recovered Wednesday after a weaker-than-expected data on business activity helped ease concerns about inflation and interest-rate hikes. The ISM's services sector index slipped to a weaker-than-expected 52.9 in September from 57.0 in August. A government report surprisingly showed a rise in crude oil inventories, sending light sweet crude down 79 cents to $57.89 a barrel.

The Dow was boosted by a 3.4% gain by General Motors (GM: chart), with the auto maker moving higher after Bear Stearns upgraded its rating on the stock to Peer Perform from Underperform. Gains by IBM (IBM: chart), up 1.3% and Microsoft (MSFT: chart), up 1.3%, also helped the blue chip index higher.

In late morning trading Wednesday, the Dow rose 57.87, or 2.17%, to 11,785.21. The blue chips traded up to 11,786.49; that is now its all-time high. The Standard & Poor's 500 index was up 2.31, or 0.17%, at 1,336.42 and the Nasdaq composite index rose 14.33, or 0.64%, at 2,257.98. Bonds rose sharply, with the yield on the benchmark 10-year Treasury note falling to 4.51% from 4.62% late Tuesday.


Crude and gasoline supplies rose.
Crude oil inventories climbed in the most recent week, according to government statistics released Wednesday. This broke a recent streak of declines. Meanwhile, gasoline stockpiles also saw an increase in the week, continuing a recent string of gains. The Department of Energy's Energy Information Administration said that crude oil inventories rose 3.3 million barrels in the week ended September 29. Specifically, the measure rose to 328.1 million barrels from the previous week's level of 324.8 million barrels. This followed a draw down of 100,000 barrels posted in the previous week. Oil inventories for the September 29 week were 6.7% higher than last year. Meanwhile, gasoline inventories showed a week-over-week increase 1.2 million barrels. This added to a recent string of gains. In the previous week, gasoline stockpiles rose by 6.3 barrels. The level of gasoline inventories was 9.6% above last year. Distillate fuel oil had an inventory increase of 200,000 barrels for the week ended September 29. This followed an advance of 2.6 million barrels reported in the previous week.

New factory orders slipped in August.
Wednesday morning, the Department of Commerce released its report on new orders for manufactured goods in the month of August. The report showed that orders fell less than economists had expected. The report showed that new orders for manufactured goods fell slightly to $403.60 billion in August from $403.63 billion in July. The modest decrease came after orders fell 1.0 percent in the previous month. Economists had been expecting orders to fall 0.2 percent. The modest decrease in factory orders came as new orders for durable goods and new orders for non-durable goods both fell slightly but came in nearly unchanged. The drop in durable goods orders was revised from the previously published 0.5 percent decrease. The report also showed that shipments of manufactured goods rose 1.1 percent in August following a 0.1 percent decrease in July. At the same time, inventories of manufactured goods rose 0.4 percent in August after rising 0.8 percent in July. Subsequently, the inventories-to-shipments ratio came in at 1.17 in August, unchanged from the previous month.

Business activity slowed in September.
The Institute for Supply Management released its report on business activity in the service sector in the month of September on Wednesday, showing that the pace of growth in the sector slowed more than economists had been expecting. The report showed that the index of activity in the sector fell to 52.9 in September from 57.0 in August. While a reading above 50 indicates growth in the sector, economists had been expecting a more modest decline to a reading of 56.0. The slowdown in the pace of growth in the sector came in spite of an acceleration in the pace of new orders growth, with the new orders index rising to 57.2 in September from 52.1 in August. The pace of employment expansion also accelerated in September, with the employment index rising to 53.6 from 51.4 in the previous month. The report also showed a notable deceleration in the pace of price growth, as the prices index fell to 56.7 in September from 72.4 in August.


10:30AM The Sensex sheds 162 points Wednesday in volatile trading.
The Sensex on BSE lost 162.38 points, or 1.3%, to close at 12,204.01. The market-breadth was weak tracking a sharp decline in blue-chips. For 1,421 shares that declined, 1,039 rose and 67 shares remained unchanged. Decliners outpaced advancers by 4 to 1. The turnover on BSE was Rs 3,416 crore, compared to Tuesday Rs 3,092 crore. The turnover on NSE was Rs 7,284.91 crore.

Decliners

IT shares led the decliners on sales. TCS lost 2.6% to Rs 988, Satyam Computer shed 2.4% to Rs 802, Wipro lost 2.2% to Rs 507.80, and Infosys shed 0.5% to Rs 1,807. Infosys unveils second-quarter results on 11 October 2006.

Banks declined on profit-taking. HDFC Bank lost 3% to Rs 893 and SBI shed 1.6% to Rs 1,016. ICICI Bank shed 0.08% to Rs 695.90. Housing finance large-cap HDFC shed 2%, to Rs 1,445.

Reliance Industries lost 1.1% to Rs 1,147. Reliance Industries on Sunday reduced retail price of petrol and diesel by a rupee, following a drop in global crude oil price. A sharp decline in oil price pulled ONGC down 2.3% to Rs 1,132. BHEL lost nearly 3% to Rs 2,300, and Bharti Airtel dipped 1.3% to Rs 460. Separately, Reliance Energy said that 20 lakh customers in Mumbai will be charged 31.5% more for electricity as of October 1st.

Steel shares declined on worries that rising steel production in China will lead to dumping of Chinese steel. SAIL lost 3% to Rs 75.80 and Tata Steel sank 2% to Rs 523. The latest data showed, that Chinese steel output advanced 17.6% between January-August 2006 to 272.50 million tones.

Advancers

Select shares not part of the Sensex stocks soared. Phoenix Mills closed at Rs 790.10, Bright Brothers at Rs 47.45, Rama Newsprint Rs 55.20, MIRC Electronics Rs 27.90, Lakshmi Precision Screws Rs 68.30, Eicher Motors Rs 336.60 and SPIC at Rs 20.95.

Bajaj Auto gained 1.7%, to Rs 3,085. The stock advanced for the second day in a row after reporting a healthy 38% growth in vehicle sales in September 2006. Tata Motors advanced 1.1%, to Rs 880. The company on Tuesday reported 24% growth in vehicle sales for September 2006. Eicher Motors jumped 10% to Rs 336.60.

Construction shares gained led by 2% rise in IVRCL Infrastructure to Rs 266.30, Nagarjuna Construction rose 1.2% to Rs 168, Era Construction advanced 1.2% to Rs 328.78 and Madhucon Projects edged up nearly 1% to Rs 257. Newly listed Atlanta jumped 8% to Rs 207.45. The stock gained on a high volume of 59.7 lakh shares on BSE.

Other news

Finance Minister P Chidambaram today said more funds would be allocated for reinvestment in oil sector as softening international oil prices would reduce the subsidy burden.