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A market that looked like it was having one of the strongest days of the year on great earnings and economic news stalled on a late oil-price surge. The

Nasdaq Composite's

inability to break through resistance around 2110 provided fodder for the bears.

The Comp had raced the highest as technology shares were among the strongest performers in Wednesday's morning rally. After quickly rising to as high as 2112, a 1.6% gain on the day, the rally hit a ceiling and leveled off. When higher oil hit, some big names sold off and the Nasdaq sank to 2090 before closing at 2099.68, still a 1% increase for the day.

The story was similar although more muted for the

Dow Jones Industrial Average


S&P 500

, where retailers caught a bid from the $11 billion


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merger with



. Sears rose 17% and Kmart gained 8% as did

May Department Stores

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(DDS) - Get Dillard's, Inc. Class A Report

rose 6%.

The Dow climbed to 10,602.85 before finishing at 10,549.57 with a 0.6% gain. The S&P closed with a 0.6% gain too, at 1181.94, down from a high of 1188.46.

With high volume and advancers outnumbering decliners 2-to-1 on both the Nasdaq and

New York Stock Exchange

, Wednesday's resistance levels likely will be tested again soon. The oil-infused afternoon downturn wasn't the final word as the indices got off the mat to finish above their lows.

Below the surface, some sectors held up better than others. For example,


(HPQ) - Get HP Inc. Report

stronger-than-expected earnings fueled an early rise in PC makers that wasn't sustained once investors took a closer look at HP. The company traded as high as $21.32 before slumping to close at $20.20, still a gain of almost 3%.


(DELL) - Get Dell Technologies Inc Class C Report

traded up to $40.97 then slumped to $40.20, a 0.5% loss.


(AAPL) - Get Apple Inc. Report

, which finished about flat, and


(IBM) - Get International Business Machines Corporation Report

, closing with a gain of 0.6%, showed similar patterns.

Biotech shares such as


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Biogen Idec


also took a big, late tumble, closing well below their highs for the day. Also,


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fell more than 5% on nearly nine times its average daily volume after an

exclusive report by's

Adam Feuerstein about patient deaths during a clinical trial of the firm's experimental MDS drug, Revlimid.

Other tech sectors held up much better.

Network Appliance

(NTAP) - Get NetApp, Inc. Report

reported a blowout quarter and stayed higher all day to finish with a gain of 18% -- right where it opened.



gained almost 5%, with little change in the afternoon.

Semiconductors also held up better.


(INTC) - Get Intel Corporation Report

finished at $24.32, up 2% and just 20 cents off its high for the day while

Applied Materials

(AMAT) - Get Applied Materials, Inc. Report

gained 3.5% to $17.34, also near its high. (After the close, AMAT

reported stronger-than-expected earnings but warned about a potential slowdown.)

Crude Spoils the Party

Oil, which traded lower during the morning, finished at $46.84, an almost 2% gain and the first up day in the past five.

There wasn't any convincing fundamental explanation for the change of direction. A morning report by the Energy Department showed inventories of heating oil and diesel fuel declined by almost 1% last week in the U.S.; the market was expecting a slight gain. But oil didn't rally until later in the afternoon. Bonds rallied as well, with the yield on the 10-year Treasury note closing at 4.14%, down from 4.21% on Tuesday.

Until oil's late surge spoiled the party, there was quite a bit of healthy economic news.

First and foremost was the consumer price index for October. After Tuesday's October producer price index reading came in way above expectations at 1.7% -- the biggest one-month jump since 1990 -- some feared the worst. They didn't get it, prompting a bond rally, of all things. Consumer prices rose 0.6% and just 0.2%, excluding the volatile food and energy components.

It's more of a split decision for the economy than the slam dunk for the bond bulls. That's because it was only "core" inflation that remained low. That's the figure used by the


and economists to measure how much pressure on prices is likely going forward. But consumers in the "real world" have to buy food, gasoline and heating oil. They're the ones who actually saw prices go up 0.6% in October and 3.2% over the past 12 months. For the economy as a whole, these drags on the consumer are not good.

Because of all the inflation over the past year, real wages are now negative over the past 12 months. That is, wages didn't keep up with rising food and energy costs. And that means consumers may be spending less over the coming months, at least once they hit their credit card limits.

Still, the big piggy bank fueling consumers has been the home equity jackpot and there's more there to be tapped, according to the Mortgage Bankers Association. The group's index of home borrowing rose 4% for the week ended Nov. 12, but all of the increase was in refinancing. Purchase loans declined 0.6%, the fifth decline in the past seven weeks as even continued low rates can't keep the housing resale market on fire. By contrast, refinancing loans rose 11% and have gained in five of the past seven weeks.

That hasn't deterred builders, as residential construction starts jumped a surprising 6.4% in October, reversing the surprise 5.6% decline in September. Some of the turmoil, of course, is due to the four hurricanes that rolled through the Southeast, but the trend hasn't been limited to that region.'s Celia Chen, director of housing economics, is wondering whether builders will turn rational soon.

"Higher mortgage rates are inevitable, as the economy's expansion continues and the Fed works to forestall future inflation," she wrote in a report on Wednesday.

Away from the consumer sector, business activity also looked healthy in Wednesday's industrial production report. Activity rose 0.7% in October and capacity utilization moved up to 77.7% from 77.3% the previous month. The biggest gain was a 1% increase in durable goods production.

The Federal Reserve has been watching homebuilding and business production closely for signs of a weakening economy. None were evident on Wednesday, keeping a further interest rate hike on schedule for next month.

In keeping with TSC's editorial policy, Pressman doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send

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