Wall Street makes hesitant advance
NEW YORK -- Wall Street made a hesitant advance Tuesday, with investors refraining from making big bets in a volatile market battered by a stream of weak economic data.
The market, which has closed lower in four of the past five sessions, has been turbulent amid worries about how long a recession might be. That's driven many retail investors to the sidelines, while big institutional traders like hedge funds keep major stock indexes vacillating.
Stocks have been trading erratically for several weeks as investors try to gauge the direction of the economy -- and there was more bad news on Tuesday. The government reported that wholesale prices plunged a record amount in October, a drop that could indicate a rising threat of deflation.
Many economists believe the economy has fallen into a recession that could be the worst downturn in more than two decades. However, the expectation is that easing inflation pressures will give the Federal Reserve room to cut interest rates further to combat the downturn.
Meanwhile, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke were grilled on Capital Hill about their management of a $700 billion financial bailout. Both are being asked to defend why they abandoned a plan to buy up toxic assets from the banks, and instead infuse billions into banks to pump up their capital and bolster lending to customers.
The market did get some positive momentum after Hewlett-Packard Co. unexpectedly announced that fourth-quarter and 2009 earnings will come in above Wall Street projections. The results signal HP, the world's largest-maker of personal computers, is weathering the economic crisis that has siphoned off sales at other technology companies.
"The Hewlett-Packard news was certainly a huge positive," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. "It shows that the world is not falling apart."
In late morning trading, the Dow Jones industrial average rose 82.11, or 0.99 percent, to 8,355.69.
The Standard & Poor's 500 index rose 5.53, or 0.65 percent, to 856.28, while the Nasdaq composite index fell 0.80, or 0.05 percent, to 1,481.25.
Declining issues outnumbered advancers by about 4 to 3 on the New York Stock Exchange, where volume came to a light 363.74 million shares. The Russell 2000 index of smaller companies rose 0.28, or 0.06 percent, to 451.58.
