Please respect FT.com's ts&cs and copyright policy which allow you to: share links; copy content for personal use; & redistribute limited extracts. Email ftsales.support@ft.com to buy additional rights or use this link to reference the article - http://www.ft.com/cms/s/0/2e1b6380-085c-11e0-8527-00144feabdc0.html#ixzz18CAEWvQf Industrial stocks edged lower despite strong data on manufacturing activity in early trading on Wednesday, as Honeywell forecast 2011 profits that missed some analyst expectations. The S&P 500 industrials index was a fraction lower, even though data showed industrial production in the US increased more than expected in November. Please respect FT.com's ts&cs and copyright policy which allow you to: share links; copy content for personal use; & redistribute limited extracts. Email ftsales.support@ft.com to buy additional rights or use this link to reference the article - http://www.ft.com/cms/s/0/2e1b6380-085c-11e0-8527-00144feabdc0.html#ixzz18CAG8XI7 Factories made more computers, home electronics goods and appliances, which helped output rise 0.4 per cent after a revised 0.2 fall the month before. “More important than the aggregate figure was the report that manufacturing output increased by 0.3 per cent month on month in November after a similar rise in October,” said Joshua Shapiro, chief US economist at MFR. The Empire State index, which measures the pace of manufacturing activity in the New York-area, beat expectations in December. The index, which shook investors last month when it fell to minus 11.1, shot back up to a positive 10.6. But Mr Shapiro said the report, which is viewed as precursor to the Philadelphia Fed’s data and the US-wide Institute of Supply Management statement, did not really add anything to what is known about the economy. Honeywell International fell 2 per cent to $51.47 even though the industrial conglomerate predicted its full-year profit for 2011 would rise 17-24 per cent. The middle of the range of $3.50 to $3.70 per share is below the average analyst estimate. The company also forecast that sales would rise 6-9 per cent in 2011, which was also to the lower end of analyst projections. General Electric also fell, even though it said it would finish the year with $20bn in cash on hand, and in the next few years could have $30bn to spend on takeovers, share buy-backs and dividend rises. The shares edged lower by 0.6 per cent to $17.58. But elsewhere in industrials, Joy Global jumped 5.6 per cent to $84.67 after the maker of mining equipment forecast earnings in 2011 of between $5 and $5.30 per share, above the consensus estimate of $4.86. The manufacturer beat earnings and revenue expectations in its fourth quarter, and bookings rose by 48 per cent. Shortly after the opening bell, the S&P 500 was down 0.1 per cent to 1,240.94, the Dow Jones Industrial Average had gained 0.1 per cent to 11,488.99 and the Nasdaq Composite was 0.1 per cent lower at 2,625.29. “Global equity markets have been retreating this morning in what appears to be profit -aking ahead of the holidays and year end more than anything else,” said Colin Cieszynski, a market analyst from CMC Markets. The S&P 500 has nudged up a little each day to gain 5.2 per cent so far this month. Another government report showed consumer prices edged 0.1 per cent higher n November, less than the 0.2 per cent gain that was forecast. The price of new vehicles, household furnishings and natural gas fell. But the S&P 500 consumer discretionary index was almost flat. “Today’s CPI report further reinforces the Fed’s concern, from an official government inflation measurement standpoint, that inflation is not yet a concern while deflation and disinflation is more pressing,” said Dan Greenhaus, chief economic strategist at Miller Tabak. A couple of ongoing deals were finally tied up. Dynegy climbed 3.9 per cent to $5.66 after the power producer said its board had unanimously approved an agreement to be bought by Icahn Enterprises for $5.50 a share in cash or about $665m. Alcon, which specialises in eyecare, added 1.7 per cent to $165.24 after Swiss pharmaceutical Novartis finished its purchase of the shares that it did not already own. US-listed shares in Novartis surged 7.4 per cent to $59.94 after it agreed to pay an extra $1bn to buy out the remaining minority shareholders. Meanwhile, Best Buy, the consumer electronics retailer which tumbled on Tuesday after its third-quarter earnings missed expectations and its forecast came in light, was downgraded by analysts at Oppenheimer. The shares fell 0.5 per cent to $35.33 after the analysts cut its rating from “outperform” to “market perform”.

Source