Dow Erases Most of Loss; Goldman, BP Rise
Stocks erased nearly all of their losses Thursday as Goldman Sachs and BP rallied just before the closing bell.
Stocks had been down for most of the day after JPMorgan's earnings failed to impress analysts and a pair of weak manufacturing reports.
The Dow Jones Industrial Average ended down 7.41, or 0.1 percent, to close at 10,359.31, after being down more than 100 points earlier. The loss was small but it still snapped a seven-day winning streak.
The S&P 500 eked out a 0.1-percent gain, while the Nasdaq slipped less than a tenth of a percent. The CBOE volatility index, widely considered the best gauge of fear in the market, was just shy of 25 at the closing bell.
US-traded shares of BP jumped over 7 percent as the oil giant appeared to get the massive Gulf oil leak capped after 86 days.
And Goldman Sachs gained more than 4 percent amid speculation that an SEC announcement this afternoon will be to announce a $550 million settlement with Goldman in the securities-fraud case against the company.
But overall, bank stocks were among the day's biggest decliners after JPMorganbeat earnings expectations but failed to impress analysts.
Rochdale banking analyst Dick Bove said this wasn't a good reportand that he would've liked to see better revenue from the bank. This came after the bank's CEO Jamie Dimon delivered a cautious forecast, saying, "It is too early to say how much improvement we will see from here."
But S&P Equity raised its price target on JPMorgan to $50.
Bank of America and Citigroup declined ahead of results from the banks at the end of the week. Both banks are expected to post decent results, helped by asset sales, but neither are expected to see an increase in their profits.
Financial-reform legislation won final approvalin the Senate, capping a year of back-and-forth since President Obama proposed financial reform in June 2009.
Boeing shares slipped after the aerospace giant announced there may be another delay on its 787 Dreamliner, which is already more than two years behind schedule.
Tech stocks dropped more than 1 percent, despite getting a boost yesterday from Intel's earnings results.
Apple shares fell 0.5 percent after the company announced late Wednesday that it will hold a news conference on Friday to talk about the iPhone 4, the subject of many reports about reception problems. Apple wouldn't give further details ahead of the conference, but the buzz on the Internet is that it may recall the phone.
Meanwhile, shares of Apple's rivals Nokia , Research In Motion and Motorola climbed.
Investors shrugged off another encouraging data point for the tech sector: World-wide PC shipments jumped over 22 percentin the second quarter as businesses are increasingly replacing their aging technology, research firm IDC reported.
"Commercial replacements continue to grow," IDC analyst Bob O'Donnell said. However, O'Donnell said consumer activity has started to slow.
Dell shares rose after the computer maker moved up the ladder of top computer makers to No. 2, behind Hewlett-Packard . Taiwanese PC maker Acer is No. 3.
Google rose and Intel rival Advanced Micro Devices fell ahead of earnings from both companies, due out after the bell.
Google's is expected to report earnings of $6.50 or more, according to the latest estimates, up more than a dollar from the $5.36 a share it earned a year earlier. One analyst said he thinks Google could fall short of Wall Street's expectationsbut still thinks the stock is a "buy."
Amazon shares dropped more than 1 percent after Bank of America-Merrill Lynch downgraded the stock to "neutral" from "buy," citing slowing growth.
A one-two punch from the manufacturing sector overshadowed any positive signs on the economy:
First, the NY Fed reported its gauge of manufacturing in the region fell in July, the lowest since December 2009. Then, the Philadelphia Fed said its gauge of regional manufacturing activity also dropped in July, the lowest reading since last summer.
Among the morning's other economic data: Jobless claims fell by 29,000 last week to 429,000, the Labor Department reported. And in June, producer prices fell 0.5 percent, while industrial production ticked up 0.1 percent.
A new survey shows despite some of the economic headwinds, individual investors are becoming more bullish.
More than 39 percent of individual investors surveyed by the American Association of Individual Investors said they were bullish this week, up 18 percent from last week.
Shares of credit-card issuers Capital One and Discover Financial Services ended mixed despite reports that credit-card delinquencies improvedin June.
The health-care sector was one one of the best-performing sectors led by US-traded shares of GlaxoSmithKline, which rose after advisers to the FDA said the company's diabetes drug Avandia should be allowed on the market in some form.
Johnson & Johnson is expected to outline new quality control strategies for regulators soon after repeated recalls of Tylenol and other consumer medicines over the past year.
Oil prices reversed earlier gains, settling at $76.62 a barrel. Gold prices rose, settling at $1,208.10 an ounceand the dollar fell broadly against the euro.
Radio Shack continued to rise on news that the retailer is currently conducting a "soft auction," with an eye towards a possible sale. Radio Shack's stock has been soaring in recent days on speculation that a deal was near for the firm to be acquired by a private-equity firm.
Shares of KKR , the parent company of private-equity firm Kohlberg Kravis Roberts, slipped on their debut, three years after they initially filed to go public.
On the flip side, shares of vitamin maker NBTY soared more than 40 percent to a new three-year high following news that the Carlyle Groupplans to take the company private.
China's third largest bank, Agricultural Bank, had a weak debut in Shanghaitoday as some pros said the stock was overvalued. Still, one analyst said the reason the stock wasn't in negative territory was became it was a "political task' to keep it above the IPO price. The stock will debut in Hong Kong tomorrow.
Volume was light, with just over 1.1 billion shares changing hands on the New York Stock Exchange. Decliners and advancers were roughly even.
Still to Come:
FRIDAY: AgBank debuts in Hong Kong; CPI; consumer sentiment; Earnings from Bank of America, Citigroup, GE and Gannett
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