U.S. Stocks Turn Mixed As Fear Returns To Equities Market
NEW YORK (MarketWatch) -- U.S. stocks on Friday faltered as nerves frayed in the face of reports, including one that Goldman Sachs might trim its workforce in making annual reviews, which dimmed earlier optimism from a slew of bright profit reports.
"Fear and greed dictate the market in the short-run, when cooler heads prevail we'll pay attention to earnings," said Anthony Conroy, managing director and head trader for BNY ConvergEx Group.
"The sell-off in the equity market came amid rumors of a quantitative fund in trouble, while separately news that Goldman Sachs could cut its workforce by 5% is also a factor in the heavier tone," said Action Economics.
After earlier climbing more than 100 points, the Dow Jones Industrial Average was more recently off 10.8 points at 12,367.8, with 17 of its components lower, led by drug manufacturer Merck & Co. Inc. , off 3%.
"This market is groping for a bottom," said Art Hogan, chief market strategist at Jefferies & Co.
The S&P 500 fell 1.08 points to 1,353.15, with the Nasdaq Composite rose 11.63 points to 2,372.55.
The equities market pared early gains after the reports involving Goldman Sachs Group Inc. . The investment firm countered by saying it was reviewing the bottom 5% of performers in its global workforce of about 30,000, and that it was still actively recruiting staff.
Early gains came after a trio of blue chips -- Honeywell International Inc., Microsoft Corp. and Caterpillar Inc. -- reported financial results that beat analysts' expectations, lifting market sentiment. But investors remained cautious about the overall economy.
"The market needs further confirmation the economy is not in a recession; next week's economic data could set the tone," said Peter Cardillo, chief market economist at Avalon Partners.
On the New York Mercantile Exchange, gold futures soared to a new record high at $924.30 in electronic trading, with the benchmark contract recently up $8.70 at $914.50. .
In energy trading, crude-oil futures rose $1.49 to $90.90 a barrel, on hopes that the fiscal stimulus package announced Thursday will lift the U.S. economy. .
Volume on the New York Stock Exchange came to 883 million shares, and advancing stocks ran ahead of those declining nearly 2 to 1. On the Nasdaq, nearly 1.3 billion shares changed hands, with advancers topping decliners 3 to 2.
With little on the economic docket Friday, the market debated whether the Federal Reserve would cut interest rates further at next week's Federal Open Market Committee gathering. Fed policymakers engineered an emergency cut of three quarters of a percentage point, or 75 basis points, earlier this week.
"Next week is heavy with data and an FOMC meeting," said Leman Brothers economist Drew Matus. "We look for mixed economic news and a 25-basis-point cut."
In an interview with MarketWatch, Caterpillar CEO James Owens said he anticipates no worse than a mild U.S. recession.
Earnings highlights
Shares of Honeywell shares were recently up 5.5%. Late Thursday, the blue-chip conglomerate reported an 18% profit increase for the fourth quarter.
Shares of Microsoft rose nearly 1% after the software giant posted an 81% surge in quarterly profit.
And Caterpillar gained 1.8% after it said fourth-quarter earnings grew about 14%.
Juniper Networks impressed with its quarterly results, sending shares up 2.6%.
Shares of E-Trade Financial rose 8.4%, rallying after it outlined a plan to cut costs by $360 million this year after reporting a $1.7 billion quarterly loss.
And Harley-Davidson Inc reported a 26% drop in fourth-quarter net income, due in part to a weak U.S. economy slowing sales. Shares of the motorcycle manufacturer were off 4%.
On Thursday, U.S. stocks claimed higher ground for a second straight day after the White House and the House leadership unveiled a tentative conomic-stimulus package, lifting an equities market battered by worries about a recession.
By Kate Gibson