Wall Street Stumbles amid Bank Hearing

The stock market stumbled in search of a direction Wednesday as the heads of some of Wall Street's biggest banks appeared on Capitol Hill to testify about the roots of the financial crisis.

The market fluctuated in a narrow range as a drop in the price of oil hurt energy stocks, while a higher profit forecast from Kraft Foods Inc. lifted consumer staples stocks. Industries seen as safer in a weak economy, like health care and utilities, rose.

Investors were following appearances by Goldman Sachs Group Inc. Chairman and CEO Lloyd Blankfein, JPMorgan Chase & Co. CEO James Dimon, Morgan Stanley Chairman John Mack and Bank of American Corp. CEO Brian Moynihan before the Financial Crisis Inquiry Commission. It is the first meeting of the bipartisan, 10-member panel, which is investigating the near collapse of the financial system in the fall of 2008.

There is growing public discord over big profits and bonuses at financial companies that has the White House considering a levy on banks to cover about $120 billion in taxpayer losses from the government's industry bailout. Opponents say it could jeopardize a recovery by the nation's biggest banks.

Scott Colyer, chief executive at Advisors Asset Management in Monument, Colo., is concerned that imposing a tax on banks would threaten his expectation for a strong economic rebound in 2010. "You don't want to take money from a group that you're trying to prop up," he said.

The questions about banks underscored how many concerns investors are juggling. After a strong first week of the year in stocks, a disappointing profit report from Alcoa Inc. late Monday is causing concern that the robust earnings investors had been expecting for the final quarter of 2009 might not materialize.

In much of 2009, companies boosted earnings by laying off workers and slashing expenses. But cost-cutting cannot be relied upon forever so investors are looking for signs that increases in revenue will lift earnings.

The improved forecast from Kraft was welcome news but its increased projection matches what analysts had already been predicting. Intel Corp. is expected to post results Thursday, and JPMorgan Chase & Co. is scheduled to report on Friday.

In late morning trading, the Dow Jones industrial average rose 6.88, or 0.1 percent, to 10,634.14. The broader Standard & Poor's 500 index slipped 0.12, or less than 0.1 percent, to 1,136.10, and the Nasdaq composite index rose 0.77, or less than 0.1 percent, to 2,283.08.

On Tuesday, the Dow fell 37 points, or 0.3 percent, while the S&P 500 index and the Nasdaq lost each lost about 1 percent on concern about China's bank policies and Alcoa's results.

Bond prices were mixed after jumping Tuesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.73 percent from 3.72 percent late Tuesday.

Crude oil fell $2.05 to $78.74 per barrel on the New York Mercantile Exchange. The drop in oil hurt energy companies, which also hurt stocks.

The dollar fell against most other major currencies, while gold fell.

Meanwhile, investors sold shares of Google Inc. after the Internet search company threatened to withdraw from China. The company said it will no longer censor its search results in the country after finding that computer hackers had led human-rights activists to reveal their e-mail accounts to outsiders. Google's public complaints were a rare show of protest in the country and an about-face for the company that long said it would abide by Chinese laws that block some political and socially sensitive content. Google fell $8.18, or 1.4 percent, to $582.30, while Baidu rose $45.23, or 11.7 percent, to $431.72.

Among banks, Goldman Sachs fell $1.42, or 0.9 percent, to $166.40, while JPMorgan lost 25 cents, or 0.6 percent, to $43.24. Morgan Stanley slipped 3 cents, or 0.1 percent, to $31.10 and Bank of America fell 11 cents, or 0.7 percent, to $16.25.

Kraft rose 35 cents, or 1.2 percent, to $29.64.

Chevron Corp. fell $1.12, or 1.4 percent, to $79.29 as oil dropped.

Later Wednesday, the Federal Reserve is expected to release its Beige Book, which provides readings on the U.S. economy by region. The report, which is due at 2 p.m. EST, arrives two weeks before policymakers' next meeting.

The Treasury Department also will release budget numbers. Economists polled by Thomson Reuters expect the deficit will total $389 billion, topping the imbalance of $332 billion recorded for the same period last year.

Falling stocks narrowly outpaced those that rose on the New York Stock Exchange, where volume came to 247.8 million shares, compared with 285 million shares traded at the same point Tuesday.

The Russell 2000 index of smaller companies fell 0.25, or less than 0.1 percent, to 635.25.

In afternoon trading, Britain's FTSE 100 fell 0.7 percent, Germany's DAX index rose less than 0.1 percent, and France's CAC-40 fell 0.4 percent. Earlier, Japan's Nikkei stock average fell 1.3 percent, China's Shanghai index fell 3.1 percent, and Hong Kong's Hang Seng index lost 2.6 percent. Stocks were mixed in Europe.