Stocks took a hit Friday as a drop in consumer sentiment exacerbated losses triggered by a disappointing round of earnings from American Express, Amazon and Microsoft.
But the Dow poked higher in afternoon trading, led by Alcoa , Pfizer and Merck .
This came after the Dow finished above 9,000for the first time since January on Thursday. And the Nasdaq logged its 12th straight gain, its longest run since 1992.
Treasury Secretary Timothy Geithner told Senate lawmakers Friday that he's willing to work with them on overhauling financial regulations but insisted that major changes are necessary.
Speaking at the Senate's risk-regulation hearing, Geithner said the financial system "failed in its most basic responsibility" to supply credit and protect consumers and that cannot happen again.
Later today, Fed Chairman Ben Bernanke and FDIC Chairman Sheila Bair will testify at the hearing.
In economic news, the Reuters/University of Michigan gauge of consumer sentiment dropped to 66in a final July reading from 64.6 in a mid-July reading and 70.8 at the end of June. Economists had expected the reading to tick up to 65. Measures of expectations for the future and current conditions also declined.
This latest batch of earnings bucked came as a bit of a disappointment after a string of beats that boosted the market.
Microsoft shares tumbled nearly 10 percent after the software giant reported a sharp drop in revenue.
Amazon also beat but other aspects of its quarterly report disappointed investors. Its stock was down more than 8 percent.
"Microsoft's and Amazon's results make me a little more bearish on the rest of the earnings season," Christopher Zook, chairman and investment chief of CAZ Investments, told Reuters.
"After Intel beat expectations, companies have felt a lot of pressure to post good results or take a positive tone in their earnings call. Microsoft isn't doing that and it's getting killed," Zook said.
Dow component American Express beat earnings forecasts but shares skidded as revenue missed estimates.
Energy-exploration company Schlumberger reported earnings of 68 cents a share that, though representing a 57 percent annualized drop, beat expectations.
We'll get a breather on the earnings front today — no after-the-bell reports are due.
CIT Group was still on its rollercoaster ride, with shares soaring nearly 20 percent after the lender amended a debt restructuring to lure more creditors and intends to keep its restructuring out of the courts. The stock had skidded more than 15 percent on Thursday following buzz that CIT may wind up in bankruptcy protection if it can't attract enough creditors.
Pharmaceuticals were one of the day's few bright spots, with Merck , Johnson & Johnson and Pfizer among the top gainers on the Dow.
On Tap for Next Week:
MONDAY: New-home sales; Earnings from Verizon and Honeywell
TUESDAY: Case-Shiller home-price index; consumer confidence; Earnings frrom US Steel, Viacom, Dreamworks and STMicro
WEDNESDAY: Weekly mortgage applications; durable goods; weekly crude inventories; Fed's beige book; Earnings from ConocoPhillips, Sprint Nextel, Time Warner, WellPoint Health, Visa
THURSDAY: Weekly jobless claims; Earnings from AstraZeneca, ExxonMobil, Colgate-Palmolive, Eastman Kodak, Kellogg, MasterCard, Motorola, Disney, MetLife
FRIDAY: GDP; Chicago PMI; Earnings from Chevron
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