U.S. Stocks Trim Gains As Price Of Crude Turns Up
NEW YORK (MarketWatch) -- U.S. stocks on Thursday scaled back gains after a measure of manufacturing activity in the Philadelphia region disappointed investors and crude oil prices gained, putting a dent in enthusiasm as J.P. Morgan Chase & Co.'s financial results beat forecasts.
"JP Morgan announced a 52% decline in quarterly profits, but that number still exceeded expectations. This may provide enough of a reason for the more optimistic-minded among us to reason that this wave of the credit crunch may finally be behind us," said Kevin Giddis, managing director, Morgan Keegan & Co. Inc.
"If this episode has taught us anything, though, it's that we should exercise some caution before waving the 'all clear' sign," said Giddis.
After climbing more than 100 points, the Dow industrials scaled back, took a brief trip into negative turf, and was more recently up 32.41 points at 11,271.69, with 14 of its 30 components on the rise.
The S&P 500 rose 2.45 points to 1,247.81, with financials fronting gains among the index's 10 industry groups, up 2.4%, followed by materials, up 0.4%, and health care, ahead 0.3%.
S&P sectors on the decline included utilities, down 0.9%, and consumer staples, off 0.8%.
The Nasdaq Composite gained 0.62 points to 2,285.47, with the technology-laden index up-and down ahead of earnings results after the close.
Software giant Microsoft Corp. is expected to post strong fiscal fourth-quarter profit and sales gains when it reports after the closing bell.
Other industry bellwethers slated to report later in the day include Google Inc. and International Business Machines Corp. .
Online auctioneer EBay Inc. weighed on the technology sector, its shares falling 15.7% after the company offered a third-quarter forecast that came under forecasts. .
Volume on the New York Stock Exchange neared 690 million, with advancing stocks outrunning those declining nearly 2 to 1. On the Nasdaq, 397 million shares traded, with advancers ahead of declining stocks 7 to 6.
The ascent in stocks comes one day after stocks rallied, with the Dow tallying the blue-chip benchmark's largest point jump since April 1, as sliding oil prices and banks' upbeat results fueled optimism.
The scenario remained only partially in play early Thursday as crude reversed course on losses to climb higher, with the contract for August delivery up $1.55 to $136.15 a barrel, while financial shares continued to surge higher.
Within the Dow, shares of J.P. Morgan Chase climbed 10.9%, Citigroup Inc. added 4.9%, and American International Group Inc. gained 2.9%.
Shares of giant mortgage buyers Fannie Mae and Freddie Mac surged, with the former up 16% and the latter gaining 19.2%.
Coca-Cola reported a 23% decline in quarterly profit, and shares traded lower.
Nokia Corp. reported a large decline in profit, but shares of the cell phone maker gained, recently up 7.5% on improved shipments and its optimistic outlook. .
Economic data mostly supported the brightened mood.
A Commerce Department report showed that overall construction starts on homes and apartments rose in June by 9.1%, while the pace of building of single-family homes declined 5.3%. .
And, the government's count of those seeking jobless benefits climbed by 18,000 last week to 366,000, the hike still came under what analysts expected. .
Conversely, the Federal Reserve Bank of Philadelphia said manufacturing in the Philadelphia region weakened for the eighth month straight in July, defying the expectations of economists, who had predicted a slight improvement.
By Kate Gibson