Stocks end mixed after volatile session
NEW YORK » Wall Street ended a volatile session mixed yesterday as investors' concerns about sluggish housing, tight credit and rising oil prices intensified their uneasiness over a motley batch of corporate profits.
Earnings reports from Yahoo Inc. and Intel Corp. were upbeat and incited some buying in the technology sector, which drove the Nasdaq composite index sharply higher.
But the Dow Jones industrial average dipped, with investors uncertain about how well corporate America overall will fare -- particularly after International Business Machines Corp. reported modest software sales and United Technologies Group Inc. said 2008 will be challenging.
Peter Dunay, an investment strategist with New York-based Leeb Capital Management said third-quarter earnings are expected to be weak, and lackluster forecasts for future quarters are unnerving investors.
"We're not getting very strong guidance numbers, and at the same time last week we were at new highs," Dunay said.
Yesterday, the Federal Reserve said in its Beige Book that growth cooled in the third quarter. Investors are also jittery about accelerating inflation -- which could prevent the Fed from lowering rates again -- after oil prices momentarily touched a fresh high of $89 per barrel.
And the lending landscape continues to deteriorate. Standard & Poor's cut the ratings on 1,713 classes of securities backed by mortgages issued in the first six months of this year. They were valued at $23.35 billion.
The Dow fell 20.40, or 0.15 percent, to 13,892.54, paring the session's worst losses. The Dow fell more than 130 points in earlier trading.
Broader indexes rose. The S&P 500 index climbed 2.71, or 0.18 percent, to 1,541.24, while the Nasdaq gained 28.76, or 1.04 percent, to 2,792.67.
The Russell 2000 index of smaller companies rose 1.54, or 0.19 percent, to 824.89.
Advancing issues narrowly outnumbered decliners on the New York Stock Exchange, where volume came to 1.42 billion shares, up from 1.29 billion Tuesday.
Oil gave up the gains of an earlier rally. A barrel of light, sweet crude lost 22 cents to $87.29 on the New York Mercantile Exchange.
Gold prices rose, and the dollar was mixed against other major currencies.
United Technologies fell $2.85, or 3.6 percent, to $76.80, despite a 20 percent rise in profit. The company said it sees international growth moderating and more slowdown in the U.S. economy.
IBM lost $3.82, or 3.2 percent, to $115.78. The computer maker posted a 6 percent profit rise, but investors focused on the modest 3 percent rise in software revenue.
JPMorgan rose $1.26, or 2.8 percent, to $46.37 on the bank's 2 percent rise in profit despite big writedowns related to soured mortgages and leveraged corporate debt.
Yahoo said late Tuesday that third-quarter profits fell less than analysts had expected, raising hopes of a turnaround. The Internet search company gained $2.13, or 8 percent, to $28.82.
Chipmaker Intel posted a 43 percent increase in third-quarter earnings. The company's shares jumped $1.24, or 5 percent, to $26.72.