US Stocks Open Slightly Lower; DJIA Down 11

By Steven Russolillo, Of DOW JONES NEWSWIRES

NEW YORK -(Dow Jones)- U.S. stocks opened slightly lower Wednesday following sharp gains in the previous session, as an upbeat durable goods report wasn't enough to lift investor spirits.

The Dow Jones Industrial Average fell 11 points, or 0.1%, to 11165, led lower by Intel's 1.5% drop and Exxon Mobil's 1% decline. The blue-chip index is coming off a 322-point rally on Tuesday, its biggest point gain in about two weeks.

The Standard & Poor's 500-stock index fell 1 point, or 0.1%, to 1162, as energy and tech stocks lagged. The technology-heavy Nasdaq Composite dropped 4 points, or 0.2%, to 2442.

The action comes after demand for long-lasting manufactured goods bounced back in July, but a decline in a key measure of capital spending indicates continued weakness in the U.S. economy.

Orders for factory goods rose 4.0% from the prior month to $201.45 billion, according to the Commerce Department. However, orders for nondefense capital goods excluding aircraft, which economists use to gauge business spending on new equipment, dropped 1.5%.

The market is coming off a two-day winning streak as investors hope Federal Reserve Chairman Ben Bernanke will suggest some sort of monetary stimulus at his scheduled speech in Jackson Hole, Wyo., on Friday. Investors anticipate Bernanke will be more open to new easing measures, but at the same time are unclear as to what the central bank may have in store.

Even as expectations rise, Bernanke will likely use the speech to elaborate on the Fed's economic outlook rather than break new ground and announce a third round of quantitative easing, or QE3.

"If what he outlines is underwhelming, you could get a selloff," Gary Flam, portfolio manager at Los Angeles-based Bel Air Investment Advisors. "The risk is to the downside. There's more of a chance that he disappoints than provides a coherent strategy for how the Fed can manage the weak economy."

Bank of America was the Dow's biggest gainer. The stock has been battered over the last few weeks as analysts worry about continued mortgage litigation woes and the possibility it may need to raise a significant amount of capital.

A measure of anxiety of its credit-worthiness also hit an all-time high on Tuesday even as analysts said the bank is much sounder than it was before the financial crisis. The stock, which has dropped 35% this month ahead of Wednesday's action, was recently up 4.3%.

In overseas markets, Asia ended broadly lower, with the Japan's Nikkei Stock Average shedding 1.1%, after Moody's Investors Service cut Japan's credit rating one notch to Aa3 from Aa2, citing large deficits and bulging government debt.

European bourses nudged higher, but pared some gains on weaker economic data. Euro-zone industrial orders in June fell 0.7% from the previous month, while economists had been forecasting an increase of about 0.5%. Also, the German Ifo business climate index fell to 108.7 in August from 112.9 in July.

On the domestic economic calendar, a reading on home prices in June is due out at 10 a.m. ET.

Gold futures fell to about $1,848 an ounce, extending declines from a record $ 1,917.90 hit during Tuesday trade on the New York Mercantile Exchange. Crude-oil futures slipped to just above $85 a barrel, but sentiment could change after the release of inventory data at 10:30 a.m. EDT. The U.S. dollar fell slightly against both the euro and the yen.

In corporate news, shares of Toll Brothers rose 1.6% after the home builder reported fiscal third-quarter earnings that exceeded estimates, while revenue fell shy of expectations.

Elsewhere, United Therapeutics slid 18% after the company said a Phase 3 trial of an investigational treatment of pulmonary arterial hypertension did not meet its primary endpoint.

Avago Technologies rallied 11% after the semiconductor maker's fiscal third- quarter results exceeded estimates, while La-Z-Boy dropped 3.4% after fiscal first-quarter earnings disappointed.