U.S. Stocks Pare Some Losses; Dow Positive As Oil Prices Ease
NEW YORK (MarketWatch) -- U.S. stocks on Wednesday edged off earlier declines, with badly beaten financial and consumer stocks helping pave the way higher amid easing commodity prices and less-disappointing-than-anticipated results from two large banks.
"J.P. Morgan and Wells Fargo are leading the charge, and an easing of commodity prices is helping consumer discretionary names," said Peter Boockvar, equity strategist at Miller Tabak.
A technical bounce also contributed to the bid higher, with the S&P 500 trading through March 2007 lows before bouncing back above it, Boockvar said.
After a volatile start, the Dow Jones Industrial Average was recently up 22.3 points to 12,523.4, with 17 of its 30 components pulling higher.
J.P. Morgan Chase led the Dow's advancing stocks, recently up 6.5%, after the bank reported a 34% decline in fourth-quarter profit in another subprime-related hit. The mortgage exposure at the third largest U.S. bank proved much less than that at Citigroup Inc. and others. .
Shares of Citigroup were down 2.4%.
Intel Corp. led declines among the blue chips, sliding 12%. The technology bellwether late Tuesday reported a 51% jump in net profit, but the results still came in shy of expectations and the company offered a disappointing forecast. .
"Intel leads us to believe the rest of the world may not be doing as well as we thought; it suggests a global slowdown, not just a U.S. slowdown," said Hugh Johnson, chairman of Johnson Illington Advisors.
Intel's "gloomy" outlook put to rest thinking that "even though the U.S. economy was doing poorly, the rest of the world was doing fine," said Johnson.
Off the Dow, Wells Fargo & Co. reported fourth-quarter net income fell 38%, with the financial-services giant braced for a consumer slowdown in 2008. .
Wells Fargo shares advanced 3%.
After breaking through five-month lows on Tuesday, the S&P 500 dropped 1.58 points to 1,379.37, while the technology-heavy Nasdaq Composite dropped 18.40 points to 2,399.19.
On the New York Stock Exchange, trading volume topped 1 billion shares, advancing stocks overtook those declining 8 to 7. On the Nasdaq, 1.9 billion shares were exchanged, and advancers ran ahead of 15 to 14.
Crude-oil futures fell after a government report showing U.S. inventories rose for the first time in nine weeks. Crude for February delivery fell $1.78 to $90.12. .
Ahead of the opening bell, the Labor Department reported an anticipated 0.2% rise in consumer-level inflation. .
"The inflation situation is always a major factor influencing the markets, but few are now worried about inflation given recent developments in the labor market, which accounts for about 70% of the inflation process," said Tony Crescenizi, an analyst with Miller Tabak & Co. LLC.
Other early data included a report from the Federal Reserve finding output at the nation's factories, mines and utilities unchanged in December. .
Early developments on the corporate front included word from Oracle Corp. that it would acquire BEA Systems for $19.375 a share. .
Sun Microsystems Inc. offered multiple surprises, issuing upbeat preliminary results as well as a deal to buy open-source software developer MySQL. .
In Asia, stocks stumbled to their lowest levels in months, with bourses in Japan, Hong Kong, China, Australia and South Korea all declining at least 2%. .
In Europe, shares moved off earlier lows as investors sought bargains. .
By Kate Gibson