U.S. Stocks Off Opening Lows As Price Of Oil Drops

NEW YORK (MarketWatch) -- U.S. stocks scaled back early losses Tuesday as the price of crude dipped more than $4 a barrel, countering earnings results and guidance from American Express Co., Apple Inc. and Wachovia Corp. that intensified worries about the economy.

"Equities were dented by weak earnings reports from a broad spectrum of companies," said analysts at Action Economics.

Off its opening lows, the Dow Jones Industrial Average was recently up 15.96 points to stand at 11,483.3, with 16 of its 30 components in the green. Gains were led by The Coca-Cola Co. , up 4.2%.

American Express was among those weighing on the blue-chip index, with the credit-card company's shares dropping 9.4% after it said it would not meet earnings targets until the economy improves.

Merck & Co. Inc. weighed on the Dow for a second day, falling 942% after the drug giant reported a modest earnings rise on what amounted to flat sales.

The S&P 500 dropped 2.51 points to 1,257.49, with energy leading declines, off 3.4%, followed by the battered financial sector, down 1.6%.

Health care fronted gains among the S&P's 10 industry groups, up 1.5%, followed by industrials, which gained 1.1%.

The technology-heavy Nasdaq Composite declined 6.12 points to 2,273.41.

Volume on the New York Stock Exchange topped 335 million shares, and decliners topped advancers 4 to 3. On the Nasdaq, 237 million shares traded, and decliners edged just ahead of advancing issues.

Crude slips

Crude-oil futures fell more than $4 to below $127 a barrel.

In New York trying to rally support for his plan to preserve mortgage buyers Fannie Mae and Freddie Mac , Treasury Secretary Henry Paulson said he believes the country is taking the right steps to stabilize the markets and financial system. .

Philadelphia Federal Reserve Bank President Charles Plosser said the central bank would likely need to begin hiking interest rates soon. Plosser, a voting member of the Federal Open Market Committee, made his comments to a business group outside Philadelphia. .

"Comments from Paulson on the importance of avoiding systemic risk with the GSEs and Philly Fed's Plosser arguing for rate hikes sooner rather than later were not particularly comforting," said the Action Economics analysts.

Tech tanks

Technology bellwether Apple fell 8.5% in early trade after the maker of personal computers and iPod music players offered a weaker-than-expected outlook for its fourth quarter.

Texas Instruments Inc. fell 13.5% after its downgrade by Merrill Lynch after the chipmaker reported a 4% profit fall and offered a disappointing third-quarter outlook.

Wachovia reported an $8.9 billion loss and cut its dividend. .

But the earnings reports were not uniformly negative. Atlanta's SunTrust Banks Inc. beat Wall Street estimates, and DuPont lifted the low end of its 2008 earnings estimate.

The Nikkei 225 climbed 3% in Tokyo after a three-day break, while other markets in Asia were flat to weak. Europe stocks dropped, with the FTSE 100 down 1.7% in London.

On Monday, U.S. stock indexes sustained minor losses after better-than-expected quarterly earnings from Bank of America Corp. offset losses in the technology, pharmaceutical and consumer discretionary sectors.

By Kate Gibson