2008.09.03 Briefing\'s Daily Market Updates

4:25 pm : Wednesday marked a choppy session for Wall Street, with the major indices settling in mixed fashion following a late-session recovery effort. The trading action came as traders digested volatile crude prices, a better-than-expected manufacturing reading and the Fed's Beige Book.

In the end, the Dow rose 0.1%, while the S&P 500 and Nasdaq fell 0.2% and 0.7%, respectively. The Nasdaq's underperformance was largely due to some warnings out of the tech sector.

The tech sector fell 1.7%. Shares of Corning (GLW 17.04, -2.46) were pummeled after the company issued a third quarter earnings warning due to lower-than-expected LCD glass shipments. The company cited an industry inventory glut. Semiconductor stocks fell 4.2%, after Corning's outlook raised demand concerns about LCD TVs, monitors and notebook computers. In addition, several semiconductor companies presented at the Citigroup Global Tech Conference.

Financials ( +1.4%) were an area of strength. Bond insurer Ambac Financial (ABK 8.61, +1.54) confirmed that it received regulatory approval from the Commissioner of Insurance of the State of Wisconsin to capitalize and restart Connie Lee Insurance, which will provide insurance for the municipal bond market. Lehman Brothers (LEH 16.85, +0.72) was once again in focus, with continued speculation that the struggling bank will be taken over or receive a capital infusion.

The consumer discretionary (+0.5%) sector outperformed, benefiting from a 1.6% rise in retail stocks. Staples (SPLS 25.17, +0.40) reported a 16% year-over-year drop in its second quarter earnings per share, which matched Wall Street's forecast. Meanwhile, shares of General Motors (GM 11.36, +0.71) rose 6.7% after the automaker posted a smaller-than-expected decline in August sales.

In other corporate news, Coca-Cola (KO 51.67, -0.29) is buying a Chinese juice company in a deal valued at roughly $2.4 billion.

Shares of ConAgra (CAG 19.62, -1.84) fell 8.6% after the food company gave an earnings warning due to underperformance in its consumer business.

In economic news, factory orders remain surprisingly strong, with the fifth straight month of positive growth. July factory orders rose 1.3% (consensus +1.0%). Excluding transportation, orders rose 1.0%. In addition, unfilled orders were up 0.7%, marking the 29th increase in the last 30 months, and indicating that manufacturing sector will remain busy. Orders in June were revised higher to 2.1% from 1.7%.

The Fed's Beige Book -- a collection of anecdotal economic reports from the 12 Federal Reserve districts -- showed an economic slowdown in most districts. At the same time, most districts continued to report price pressures due to the elevated costs of energy, food and other commodities. Wage pricing pressures were moderate, as the sluggish economic environment has allowed businesses to limit their salary increases.

Crude oil prices traded in a volatile manner, falling as much as 2.3% before recovering to settle the day with a 0.3% loss at $109.42 per barrel. Commodities as a whole fell 0.5%.DJ30 +15.96 NASDAQ -15.51 NQ100 -0.9% R2K +0.5% SP400 -0.2% SP500 -2.60 NASDAQ Adv/Vol/Dec 1477/2.13 bln/1302 NYSE Adv/Vol/Dec 1614/1.21 bln/1491

3:30 pm : Stocks recover some losses as the financial sector (+1.0%) rallies to session highs. The buying interest in financials is mostly broad-based, although the thrifts & mortgages (+2.7%) group is garnering a good deal of interest.

The Dow and S&P 500 post a modest loss. The Nasdaq is trailing, as semiconductors (-4.5%) remain under pressure.

The Dollar Index (unch) gave up its early gains, but its advance over the previous few sessions has sent it into positive territory for the year, up 1.8%. If the Dollar Index posts a gain in 2008, it would mark the first yearly gain in three years after falling 8.3% in both 2007 and 2006.

DJ30 -18.48 NASDAQ -19.54 SP500 -6.08 NASDAQ Adv/Vol/Dec 1440/1.72 bln/1334 NYSE Adv/Vol/Dec 1425/885 mln/1629