Stocks Chop Around; Techs Pull Back
Stocks were mixed in another volatile session as oil prices gave up earlier gains and techs pulled back amid concerns about a recovery in spending.
Oil prices bounced in and out of positive territory after shedding more than $9 a barrel in the past two sessions. Earlier, oil was up as much as $2 a barrel.
Today's topsy-turvy session was keeping with the pattern this week, something analysts say will continue as the market frantically grasps for a bottom.
Asian stocks closed slightly higher after paring gains following a report that Iran tested missiles capable of reaching Israel -- and U.S. bases -- while European stocks recovered, with miners up after Alcoa's better-than-expected results.
Alcoa was one of the top gainers on the Dow.
Alcoa reported after the bell Monday and both earnings and revenue beat forecasts. The aluminum maker earned 66 cents a share on sales of $7.62 billion in the second quarter, down from a profit of 81 cents a share on revenue of $8.066 billion last year. But analysts had expected 64 cents a share and $7.358 billion in sales, according to a consensus estimate from Thomson Reuters.
The report was an encouraging start to what is expected to be a challenging second-quarter earnings season but concerns lingered.
"I don't think that one earnings report such as Alcoa is going to turn things around," Ben Lichtenstein from Tradersaudio.com said on CNBC's "Worldwide Exchange."
"I think the market needs to flush out a little bit to the downside right now," he added, saying that better growth and jobs figures would help the market shake off its gloomy mood.
General Electric shares declined ahead of its earnings, due out on Friday morning.
Earnings for the S&P 500 are now expected to have dropped 12.4 percent for the second quarter, a far cry from January's forecast of 4.7-percent growth, according to Thomson Reuters.
Financials, which had led the prior session, were mixed.
Investors in Fannie Mae and Freddie Mac are at risk for whiplash: The stocks are up today despite more chatter about the mortgage lenders' need to raise more capital. The stocks swung sharply higher on Tuesday after a significant drop on Monday.
Bond insurers Ambac and MBIA rallied for a third straight day.
Fitch Ratings backed its ratings on four big investment banks: Lehman Brothers and Merrill Lynch, Morgan Stanley and Goldman Sachs but said Merrill is at imminent risk of downgrade due to additional writedowns and the amount of debt set to mature in the next year.
Merrill is said to be mulling a sale of its stakesin BlackRock or Bloomberg ahead of its earnings report, due out next week.
(Ramius founder Peter Cohen weighs in on the future for financials. Click on the video at left.)
Tech stocks, which were also among the stars of Tuesday's session, declined after Cisco chief John Chambers said many of the networking-gear maker's customers now see the economy picking up next year -- not this year as previously expected.
Cisco shares shed more than 4 percent. Chips also took a hit, with Intel leading Dow decliners.
Boeing shares climbed after the U.S. government announced plans to reopen bidding for a controversial $35 billion refueling-tanker contract. U.S. Defense Secretary Robert Gates referred to its as "expedited recompetition." The Air Force had rewarded the contract to Northrop Grumman and Europe's EADS in February but the decision was met with protests.
Retail chain Steve & Barry's is expected to file for Chapter 11 bankruptcy as early as this week, the Wall Street Journal reported on its website on Tuesday.
But in the sector as a whole, retailers, led by the discounters, are expected to post slightly better June same-store sales this week, due to seasonal weather and tax rebate checks.
The high price of fuel grounded another airline, with ExpressJet Holdings , the parent of ExpressJet Airlines, saying it would suspend branded commercial operations as of Sept. 2.
Still to Come:
WEDNESDAY: Crude-inventories report
THURSDAY: Monthly retail sales; jobless claims; Fed's Yellon speaks; Marriott earnings; Chevron interim report
FRIDAY: Import/export prices; international trade; consumer sentiment; Treasury budget; GE earnings; Apple's iPod 3G hits store shelves
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