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[ThatHawaiiGuy]

MARKET REPORT + Talk
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Nasdaq and small cap stocks ended Wednesday's trading day lower as
investors reacted to a slowing U.S. economy that could continue to affect
earnings in the tech sector.

For the session, the Russell 2000 leading index of small cap stocks ended
lower by 4.7 points, or 1%, to 453.32, while the S&P 600 lost 1.77, or
0.9%, to 200.15. The Wilshire Small Cap 1750 deleted 7.54, or 1%, to 731.85.

There is a whole bull market out there that is getting overlooked due to
tech-sector weakness, said Frank Gretz, chief technical analyst at Shields
& Co. "It's important to realize that most everyone is looking for rally."

The tech-laden Nasdaq Composite Index, which tumbled 5.1% in Tuesday's
session, lost another 28.82 points, or 1.1%, to 2706.16, well off its lows
for the session. The Philadelphia Semiconductor Index of large cap chip
issues fell into the losing column once more in a choppy day of trading,
down 0.74 points, or 0.1%, to 576.38, after plunging 8% Tuesday.

Blue chip stocks for the most part stayed in positive territory with the
Dow Jones Industrial Average gaining 121.53, or 1.2%, to 10,629.11, while
the S&P 500 gained 5.68 points, or 0.4%, to 1341.77.

Earlier Wednesday, the Commerce Department said third-quarter Gross
Domestic Product rose 2.4%, a hair above analyst estimates of 2.2% but
lower than the initial 2.7% released last month.

"Wall Street responded in mixed fashion to the numbers," said Larry
Wachtel, market analyst for Prudential Securities Inc. "Half the Street
wanted it worse and the other half feared it would be worse."

Wachtel noted some analyst estimates were as low as 2% ­ or even lower.

"With the economy obviously cooling and fears of a hard landing, which
means recession, being brooded about, the fact that it was 2.4% shows that
we aren't going into the tank," Wachtel said.

The report on the total output government report also revealed inflation
remained in check during the third quarter at a revised 2.1%. It was
further proof the Federal Reserve's higher interest rates were slowing
economic growth.

"The thing that Wall Street is lusting for is a change in Fed policy,"
Wachtel added. "And the worse the economic numbers, the more likely the Fed
is to change at least its bias on Dec. 19."

With unemployment hovering around 4%, market watchers hope for a modest
rise in next week's unemployment report to assuage the Fed's inflationary
fears. A continued low-unemployment rate is viewed as a sure sign the Fed
won't ease rates anytime soon.

"If the unemployment rate rises from 3.9% to 4.1% or 4.2%, then there will
be a groundswell ahead of the Fed meeting," Wachtel said.

"If the unemployment rate stays at 3.9% ­ a 40-year low ­ and the price of
energy continues to rise as it has been, it's very hard for the Fed to then
say we're going to ease against this obvious inflationary threat."

Within small cap stocks, shares of NexMed Inc. (NASDAQ: NEXM) rose 12%
after the firm said phase III clinical results showed its Befar cream was
"significantly" more effective than a placebo in treating erectile
dysfunction. For the session, NexMed gained 1 point, or 11%, to 10 1/8.

Tut Systems Inc. (NASDAQ: TUTS) lost ground after Dain Rauscher Corp.
downgraded the stock, cut its price target and said the broadband provider
is unlikely to see substantial revenues from its Korea operations for the
next two quarters. Shares of Tut Systems dropped 6 7/16, or 37.6%, to close
at 10 11/16 on high volume of 6.23 million.

Genzyme Surgical Products (NASDAQ: GZSP) said it received U.S. Food & Drug
Administration approval to market its heart valve surgery product,
NextStitch. The news drove shares of the cardiovascular surgery products
firm up 5/8, or 8.5%, to 8.

In Canadian trading, the Toronto Stock Exchange headed lower, adding to
yesterday's 200-point loss. The TSE dropped 104.10 points, or 1.2%, to
8821.10, while the Canadian Venture Exchange lost 43.84, or 1.5%, to 2934.01.

In currency markets, the Canadian dollar slipped 0.4% to US$0.6487 from
US$0.6515, while in late New York trading, the euro was steady at US$0.8568.

In commodities news, energy futures gained after Tuesday losses, with
January crude oil futures adding 41 cents, or 1.2%, to $34.63, while
January natural gas slipped 3 cents, or 0.5%, to $6.18. February gold
dropped $3, or 1.1%, to $269.60.

Watch for more economic news this week. Tomorrow, look for the latest
personal-income data and weekly initial-unemployment claims, among others.
On Friday, construction spending weighs in.


Good God! Did any of you catch TALK (talk.com):

http://quote.yahoo.com/q?s=talk&d=v1

Now on my radar. Think there might just maybe have been just a smidgeon of manip here?

http://chart.yahoo.com/d?s=talk