U.S. Stocks Struggle To Retain Gains As Financials Hit Again

NEW YORK (MarketWatch) -- U.S. stocks on Friday returned to modest gains after a brief dip into the red, with Citigroup's pummeled shares again bruising the financial sector.

Up more than 150 points early on, the Dow Jones Industrial Average was more recently up 33.85 points at 7,586.14, with 19 of its 30 components trading higher.

Aluminum producer Alcoa Inc. fronted the Dow's gains, climbing 13.5%.

Wal-Mart Stores Inc. edged 1.5% higher after the discount retailer unexpectedly named international chief Mike Duke to succeed Lee Scott as president and chief executive, effective Feb. 1. .

Shares of Citigroup fell 16.6% as initial enthusiasm about a possible sale of all or part of the company waned. .

Other laggards on the blue-chip index included automaker General Motors Corp. , off 1%, and JPMorgan Chase , down 8.5%.

"As of the last tally, anyone with $2 billion could buy all of GM, and anyone with about 10 times as much pocket-change could lay claim to Citi. Perhaps the automakers should beat a path to the offices of Messrs. Jobs or Gates. Picture an iCar with power Windows," said Jon Nadler, senior analyst at Kitco Bullion Dealers Montreal.

The S&P 500 gained 3.26 points to 755.7, with energy and materials pacing the advance, and financials and health care shares fronting losses among the index's 10 industry groups.

In addition to Citigroup, shares of KeyCorp plunged 23.7% and Hartford Financial Services dropped 13.3%.

The Nasdaq Composite gained 6.58 points to 1,322.65.

"Finding a bottom is more about reaching the end of fund redemptions, not about a level or a valuation," said Marc Pado, U.S. market strategist at Cantor Fitzgerald.

Volume on the New York Stock Exchange hit 802 million, with decliners beating advancers 3 to 2. On the Nasdaq, 486 million shares traded hands, and decliners topped advancers 8 to 5.

U.S. stock gains early on followed a higher close in Asia, where markets sprang back from losses as traders speculated that China may cut interest rates further.

In Europe, stocks lost early gains as data showed the continent's economy contracting at a brisk pace. .

Oil futures traded lower below $48 a barrel as analysts questioned whether oil prices can stage a significant rebound amid slumping energy demand.

Gold futures gained almost 6% as wary investors continued to turn to safe-haven buying.

Treasury prices declined, pushing yields up from multi-year lows hit the prior day. .

"The Treasury market will gladly give up some gains to calm a bunch of near-suicidal equity traders," said Kevin Giddis, bond analyst at Morgan Keegan & Co. Inc.

Dell Inc. fell 5.4% after the computer maker late Thursday said its quarterly profit dropped a less-than-forecast 5%.

The Gap Inc. rallied 18.7% after the retailer said its profit rose 3% and backed its annual earnings outlook.

Autodesk Inc. slumped 22.7% as the design software maker warned on its fourth-quarter outlook. .

By Kate Gibson