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Stocks mixed in early morning trading

October 08, 2009|Associated Press

NEW YORK — After a strong two-day rally, major stock indexes finished mixed Wednesday as investors waited for earnings-report season to begin in earnest.

The Dow Jones industrial average dropped about six points, while broader indexes edged higher.

The market could get a lift today on a third-quarter profit reported after the bell by Alcoa, the first of the 30 Dow companies to release results for the latest three-month period. The aluminum giant had posted a loss in each of the three preceding quarters. Shares of Alcoa rose more than 5% in extended trading after rising 2.2% during the regular session.

Many investors avoided placing big bets Wednesday on concerns that companies' revenue and earnings won't justify the enormous gains in stocks in the last seven months. The Standard & Poor's index is up 56% since hitting a 12-year low in March.

"Investors are holding tight here," said Eric Ross, director of research at Canaccord Adams. "There are people on both sides of the fence."

The Dow fell 5.67 points, or 0.1%, to 9,725.58. The S&P 500 index rose 2.86 points, or 0.3%, to 1,057.58, while the Nasdaq composite index rose 6.76 points, or 0.3%, to 2,110.33.

The Russell 2,000 index of smaller companies edged up less than 0.1%.

Advancing stocks narrowly outpaced those that fell on the New York Stock Exchange.

A falling dollar and rising commodity prices helped push stocks higher Tuesday, adding to a gain the day before spurred by signs of growth in the service industry. The Dow jumped 244 points in two days, its best back-to-back advance since July 15-16.

Many companies' second-quarter earnings beat modest expectations because managers aggressively cut costs. That helped fuel the market's rally through the summer. Now, investors are hoping to see stronger sales driving earnings, which would signal some steadying in consumer spending. Many analysts remain skeptical.

"The consumer is just really damaged," said Len Blum, a managing partner at Westwood Capital. "Every time we see a blip, it's not sustainable."

In other trading, shares of Verisk Analytics shot up 24% in their market debut. The insurance data specialist raised $1.9 billion in one of the year's largest initial public offerings.

Near-term gold futures rose to a fresh closing high, climbing to $1,044.40 an ounce, up $4.70.

Oil fell $1.31 to settle at $69.57 a barrel on the New York Mercantile Exchange.

The dollar rebounded, gaining against the euro for the first time in four days, on speculation the U.S. currency's decline -- triggered by rock-bottom interest rates and massive government spending -- had been too fast to sustain.

Yields on government bonds fell after an auction of 10-year Treasury notes drew strong demand. The benchmark 10-year T-note's market yield fell to 3.17% from 3.24% late Tuesday.

Overseas, key stock indexes fell 0.6% in Britain, 0.3% in Germany and 0.4% in France. Japan's Nikkei stock average rose 1.1%.

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