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Stocks Turn Mixed Ahead of Close; Utilities Fall

Stocks rose out of negative territory after rallying earlier in the sessions as the dollar rose, and investors absorbed the meaning of a large batch of earnings reports and economic news.

The Dow Jones Industrial Average gained more than 10 points, after rising as much as 100 points earlier in the session. The Dow has moved 147 points this session, from as high as 11,213.54, to as low as 11,066.19. Today's volatile session comes a day after stocks rallied on a previous batch of positive earnings results.

Home Depot and United Technologiesrose, while Bank of America and Alcoa fell.

The S&P 500 Index rose slightly, while the Nasdaq fell just before the close. TheCBOE Volatility Index, widely considered the best gauge of fear in the market, fell below 20.

Among the key S&P 500 sectors, consumer discretionary, industrials, and consumerstaples advanced, while telecom fell.

The dollar , which has had a strong effect on the stock market in recent weeks, rose after trading lower earlier in the session.

A drop in claims for new unemployment benefits, as well as a Federal Reserve report that the economy grew at "modest pace" between September and early October, may be giving investors reason to halt the rally in stocks, said Todd M. Schoenberger, managing director, LandColt Trading.

That's because the somewhat brighter economic news evident in these reports could mean the Fed elects to either not buy assets to boost the economy, or buys fewer than the market has been anticipating, Schoenberger said.

"That would explain why stocks are selling off: people are looking at the data, and saying, this just doesn’t make sense," he said.

Caterpillar , a barometer of health in the construction and housing industries, easily beat expectations with its earnings and raised its full-year outlook, although its stock sank. The company attributed emerging market growth for its boost in profitability, and said growth in the U.S. and Europe is likely to be about 2.5 percent next year.

AT&T fell although it matched analyst expectations of 55 cents per share. Fellow Dow component Travelers also beat estimates and saw its shares mover higher.

McDonald’s rose after reporting earnings exceeded estimates by four cents a share. Amazon , another consumer discretionary stock, rose ahead of its earnings release Thursday after Bank of America Merrill Lynch raised the stock to "buy" from "neutral," saying the Internet retailer is likley to have strong holiday sales. The brokerage raised its price target for Amazon to $190 from $176.

Netflixsky-rocketed after it reported strong results Wednesday as it added subscribers.

Ebay shares, meanwhile, jumped to the top of the S&P 500 after reporting quarterly profit and revenue that beat expectationsafter the close on Wednesday.

Nokia topped earnings for the third quarter, thanks to demand for cheap smartphones. The wireless phone maker also said it would cut up to 1,800 jobs.

Among consumer staples stocks, Kellogg was lower after being one of the few companies to disappoint with earnings. The cereal maker struggled with a recall of some packages of Corn Pops, Honey Smacks, Froot Loops and Apple Jacks cereals, as well as weak sales for some brands. Kellogg now anticipates 2010 earnings per share to rise between 4 percent and 5 percent.

Xerox's third-quarter profits, meanwhile, doubled on strong revenues, a sign that businesses were spending.

Continuing the good news for airlines, Southwest Airlines posted a profitfor the third-quarter Thursday, compared with a loss a year earlier, as demand returned.

Also United Continental's shares were down after the airline reported better-than-expected profits at United and Continental, the airlines that merged to form the new company on Oct. 1. The company said capacity in the fourth quarter would rise 3-4 percent.

Shares of JetBlue , meanwhile, fell despite posting record third-quarter profits and revenues.

Materials stocks were not faring well as the dollar rose, and the price of gold slippedto its lowest levels since August. Freeport-McMoRan Copper & Gold was down slightly despite a 30 percent jump in third-quarter profits. As a group, metals and mining stocks fell nearly 1 percent.

Among regional banks, profits for the third-quarter doubled at PNC Financial ServicesGroup on lower loan losses, and the sale of a back-office unit to Bank of New York Mellon . Revenue at the bank fell 8 percent, however.

SunTrust Banks also had a surprise boost in third-quarter profits.

Swiss bank Credit Suisse said earlier on Thursday its third-quarter net profit tumbled 74 percent as sluggish equities trading halved investment banking earnings from the previous quarter.

Banking shares came under pressure in Europe after the Credit Suisse numbers. Uncertainties about company earnings and economic numbers prompted investors to move into food, beverages and personal goods shares, traditionally seen as defensive.

Meanwhile, Goldman Sachs is considering paying back the $5 billionWarren Buffett's Berkshire Hathaway invested in the investment bank during the financial crisis, according to the Wall Street Journal, citing people familiar with the situation.

And KKR shares jumped after news the firm is launching a new long-short public equities unit with nine traders from Goldman Sachs' proprietary trading desk. The group, led by Bob Howard, begins at KKR in January.

Janus shares sank to the bottom of the S&P 500 after as investors remained concerned about persistent outflows from the investment management firm's mutual funds. Janus's third quarter profit rose to $32.5 million from $8.2 million a year earlier thanks to higher fees and cost cutting.

UPS , meanwhile, also posted better-than-expected third-quarter profits and revenues, thanks to growth in international air freight and cost controls.

And shares of Union Pacific fell despite posting better-than-expected profits on rising volumes for rail travel. The company also said it was beginning to rehire furloughed workers, and to hire new employees, according to Reuters.

Eli Lilly posted better-than-expected profits, thanks to costs savings, but revenues fell short of estimates. The drugmaker earned $1.3 billion, or $1.18 a share, compared with $942 million, or 86 cents a share a year ago when Lilly had several special charges. Global revenue rose to $5.65 billion, shy of the $5.77 billion expected by analysts.

Shares of the New York Times rose after news an investor group is interesting in buying the Boston Globe, a year after the publishing group decided to no longer pursue a sale of the newspaper group, according to the Wall Street Journal.

Office Depot shares fell after news the company has settled charges with the Securities and Exchange Commission that executives at the office supply retailer with improperly disclosing information to analysts. Office Depot paid a $1 million to settle the charges, and did not admit or deny wrongdoing.

In economic news, the Philadelphia Federal Reserve Survey, a measure of factory activity in the U.S. Mid-Atlantic region, came in lower than expected at 1.0 in October, after a reading of minus 0.7 in September, though a reading above zero indicates expansion and suggested a slight improvement after two months of contraction.

Also, the Leading Economic Index rose 0.3 percent last month, after a revised 0.1 percent gain in August and a 0.2 percent increase in July, according to the Conference Board.

Initial claims for unemployment benefits fell23,000 to 452,000 for the week ended Oct. 16, the Labor Department said Thursday. The forecast was for claims to drop to 455,000, down from a revised 475,000 the week before, according to analysts surveyed by Reuters.

Investors also digested data showing China's growth cooled in the third quarter even as inflation edged higher.

The major indexes in Europe were broadly higher, as money moved into defensive stocks.

On the Calendar Next Week:

THURSDAY: ECB Meeting, natural gas inventories, money supply, Kansas City Fed President Hoenig speaks, CBO Director Elmendorf speaks; after-the-bell earnings from American Express and Amazon.
FRIDAY: G20 Finance Ministers & Central Bank Governor's Meeting; before-the-bell earnings from Verizon, Exelon, Ingersoll-Rand and Schlumberger.

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