Stocks were falling as investors remain worried about high borrowing costs in the eurozone.
NEW YORK (TheStreet) -- Stocks were trading lower as investors remained fixated on eurozone worries despite some better than expected economic data in the U.S.
The Dow Jones Industrial Average was down 107 points, or 0.9%, to 11,989. The S&P 500 was down 10 points higher, or 0.8%, at 1248. The Nasdaq was off 19 points, or 0.7% below fair value, at 2668.
The Consumer price index edged down 0.1% in October, a welcome surprise given that economists expected the level to sit tight after increasing 0.3% in September. Excluding food and energy, inflation rose 0.1%, in line with expectations.
Signs of easing inflation may give the Federal Reserve more leeway to further stimulate the economy if needed. Market participants often meet the possibility with enthusiasm but as David Semmens, economist with Standard Chartered Bank, notes, "this is Fed friendly data but is going to do little to sway the market one way or the other right now given the focus on Europe."
Italy's Mario Monti formed a new government on Wednesday, bringing the country closer to stemming the debt crisis and staving off a potential default. However, investors are hoping that Italy will show much more political willpower than a shift in its leadership. Monti will be sworn in as the interim prime minister at 11 a.m. E.T.
Yield on Italian 10-year bonds topped 7% earlier, although they were last falling by 1.4% to 6.97%. The European Central Bank was rumored by traders to have stepped in Wednesday to attempt to stop a selloff in European sovereign debt. Such an intervention is known only to provide short-term stability in the markets.
The euro was down 0.35% versus the dollar at $1.348. London's FTSE was losing 0.48% and Germany's DAX was slipping by 0.86%. Overnight, Asian stocks fell for a second day. Japan's Nikkei Average lost 0.92% and Hong Kong's Hang Seng closed down 2%.
Market sentiment has been torn between the uncertain outlook in Europe and signs of economic improvement in the U.S. On Tuesday, economic reports helped lift stocks. The Dow, which was up three of the last four trading sessions, tacked on 17 points amid light trading volumes.
Industrial production rose 0.7% in October, higher than the 0.4% increase expected according to a report from the Federal Reserve. September's figure was revised from a 0.2% gain to a 0.1% decline. Capacity utilization came in at 77.8%, slightly higher than forecasted and up from 77.4% in the prior month.
In corporate news, Target(:TGT) was gaining 3.2% after its third-quarter profit topped estimates. The discount retailer earned $555 or 82 cents per share, compared to the forecasted 74 cents per share by analysts, as it expanded its food selection and offered a discount to cardholders.
Abercrombie & Fitch(:ANF) was tumbling 10.8% after reporting third-quarter earnings of 57 cents a share, below the average analyst estimate of 71 cents a share.
Dell(:DELL) was losing 2.4% after it beat third-quarter earnings estimates but failed to meet analysts' expectations on revenue. Dell, the world's third-largest PC maker, reported adjusted earnings of 54 cents a share on revenue of $15.4 billion. Analysts were expecting earnings of 47 cents on revenue of $15.7 billion.
Citigroup(:C) was slipping by 1.3%. The bank is preparing to eliminate 900 jobs in its securities and banking division, or about 5% of the unit's worldwide staff, according to the The Wall Street Journal.
Apple(:AAPL) appointed Art Levinson as its new chairman, a role held by Steve Jobs before his death last month. Levinson, the chairman of Genentech, has been a co-lead of Apple's board since 2005, but will now serve as non-executive chairman. Apple also said Walt Disney(:DIS) CEO Robert Iger will join its board. Shares were down 0.34% to $388.83.
American Airlines parent AMR(:AMR) was losing 2.1% after failing to reach a cost-saving agreement with its pilots. The lack of a deal raises the possibility that AMR will file for bankruptcy.
Gold for December delivery was down $17 to trade at $1765 an ounce on Monday. In other commodities, the December crude oil contract edged down 22 cents to trade at $99.15 a barrel.
The dollar was strengthening against a basket of currencies, with the dollar index rising 0.2%. In the bond market, 10-year Treasuries were gaining 3/32, diluting the yield to 2.04%.
-- Written by Chao Deng in New York.