Stocks mixed as investors weigh Wachovia, oil drop
NEW YORK -- Wall Street traded mixed today after another dive in oil prices blunted the impact of discouraging quarterly results from Wachovia Corp. and other blue chip names.
The market initially fell on heightened concerns about the continuing impact of the housing market's downturn that led to the credit crisis. Results from companies including American Express Co., Apple Inc., and Texas Instruments Inc. all fell short of expectations.
The reports indicated that not only are companies struggling, but so are consumers. Wachovia, the nation's fourth-largest bank, racked up an $8.86 billion loss because of charges and reserves for bad mortgage loans. The Charlotte-based bank also cut its dividend for the second straight time, and shares plunged 10 percent.
The bank's results were especially sobering for investors who last week sent stocks soaring after better-than-estimated reports from Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. Global banks and brokerages have written down some $300 billion of mortgage-backed securities and other risky investments since the crisis began last year.
However, investors were somewhat encouraged after oil prices took another big drop. Oil prices fell $5.07 to $125.97 a barrel on the New York Mercantile Exchange as concerns eased about possible supply disruptions from Tropical Storm Dolly.
"Lower oil prices are diverting attention from earnings for the moment," said Ryan Larson, senior equity trader at Voyageur Asset Management. "There's no questions about some negative earnings reports coming out, but we're starting to think some of them might be company specific and not broader. And oil prices are alleviating some fears."
In late morning trading, the Dow Jones industrial average rose 54.23, or 0.47 percent, to 11,421.57. The blue chip index rose 400 points last week, but ended Monday's session slightly lower.
Broader indexes were mixed. The Standard & Poor's 500 index rose 1.97, or 0.16 percent, to 1,261.97; and the Nasdaq composite index dropped 3.86, or 0.17 percent, to 2,275.67.
In addition to earnings reports, investors also paid close attention to a speech from Philadelphia Federal Reserve President Charles Plosser. He said there could be rate hikes "sooner rather than later" even if employment and financial conditions haven't revived.
