Stocks struggled for direction Wednesday, following a handful of positive earnings results, but were weighed down after existing home sales tumbled unexpectedly to a seven-month low.
The Dow Jones Industrial Average slipped, after ending sharply higher in the previous session.
BofA [BAC 9.96 0.39 (+4.08%) ] and Boeing [BA 72.85 2.32 (+3.29%) ] rose, while United Tech [UTX 86.51 -2.31 (-2.6%) ] slipped.
The S&P 500 and the tech-heavy Nasdaq traded mixed. The CBOE Volatility Index, widely considered the best gauge of fear in the market, slipped near 19.
“This is a bipolar market,” said Alan Valdes, director of floor operations at DME Securities. “If there’s anything you can be sure of, it’s volatility and that’s where you’re going to make your money.”
Valdes said traders are focusing on the ongoing European debt crisis and the ongoing debt talks in the U.S.
“And there continues to be no volume, so it’s just traders,” he added.
The House passed a bill to raise the debt ceiling on Tuesday evening on condition of caps on current and future spending, but questions remain over whether bill will be approved in the Senate. However, some traders remain skeptical that any deal forged will merely be a temporary solution.
Meanwhile, financials gained after being the worst-performing sector for the last few sessions. Bank titans BofA [BAC 9.96 0.39 (+4.08%) ], Citigroup [C 38.80 0.78 (+2.05%) ] and JPMorgan [JPM 41.272 0.882 (+2.18%) ], which recently all hit fresh 52-week lows, were trading to the upside.
"Looks like financials have been so beaten up and people are looking for an oppotunity to buy," according to Kenny Polcari, managing director of ICAP Equities.
Also, European banks jumped after a report that the euro zone bailot fund (EFSF) could be allowed to extend credit lines to countries and buy bonds in the secondary markets.
Among earnings, Apple [AAPL 389.5893 12.7393 (+3.38%) ] surged after the iPod maker beat earnings expectations on Tuesday afternoon and hinted at a new product launch, which most analysts believe to be a new iPhone. At least five brokerages raised their price targets on the firm.
BlackRock [BLK 186.50 2.81 (+1.53%) ] and USBancorp [USB 26.07 1.04 (+4.16%) ] rose after both firms posted earnings that beat Wall Street expectations.
Abbott Laboratories [ABT 52.32 -0.57 (-1.08%) ] slipped, even after the pharmaceutical company reported better-than-expected earnings helped by strong sales growth in emerging markets and demand for its arthritis drug, Humira.
Johnson Controls [JCI 40.0001 -1.5099 (-3.64%) ] fell even after the auto parts maker reported a stronger-than-expected profit thanks to a fast recovery from the impact of the Japanese earthquake.
American Express [AXP 51.94 0.13 (+0.25%) ], Intel [INTC 23.12 0.06 (+0.26%) ], Qualcomm [QCOM 57.73 0.75 (+1.32%) ], ETrade and Ebay [EBAY 33.43 -0.33 (-0.98%) ] among others are slated to post earnings after-the-bell tonight.
Meanwhile, ETrade [ETFC 14.90 1.95 (+15.06%) ] jumped after Citadel, the firm's biggest shareholder, urged the financial services firm to explore a possible sale.
Clorox [CLX 75.1975 2.6275 (+3.62%) ] jumped after billionaire investor Carl Icahn raised his offer to buy the household products company to $80 a share from $76.50 after the company rejected his previous offer.
News Corp [NWSA 16.08 0.29 (+1.84%) ] continued to gain after Rupert and James Murdoch testified to a UK parliamentary committee on the phone hacking scandal. Analysts pointed to a relief rally that the hearing did not uncover anything too damaging.
Oil prices advanced following a report that the IEA is unlikely to release more crude stocks into the market. U.S. light, sweet crude gained over $98 a barrel, while London Brent crude rose above $118.
On the M&A front, Nalco [NLC 36.082 7.212 (+24.98%) ] surged more than 30 percent after Ecolab [ECL 51.37 -4.02 (-7.26%) ] said it would purchase the water treatment company for $5.4 billion.
Meanwhile, high-profile real estate website Zillow shares [Z 44.64 24.64 (+123.2%) ] skyrocketed more than 100 percent in its trading debt. And headphone vendor Skullcandy [SKUL 21.50 1.50 (+7.5%) ] jumped more than 10 percent in its debut.
On the economic front, mortgage applications surged last week, marking the biggest increase in four months amid a flood of refinancing demand as interest rates remained low, according to the Mortgage Bankers Association.
German Chancellor Angela Merkel meets French President Nicholas Sarkozy in Berlin ahead of another meeting of European leaders to find a solution to Greece’s debt crisis. Merkel has already dampened expectations, saying the meeting will not yield a “spectacular” solution that will solve everything.
(CNBC Asia)
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