Stocks turned mixed Tuesday as another wave of disappointing earnings news weighed on the market but tech stocks shined bright.
The Dow Jones Industrial Average wavered in early trading, unable to find sticking power above yesterday's close, while the tech-heavy Nasdaq advanced.
“Nervousness has returned to the market again and that’s a troubling fact,” Art Cashin, director of floor operations at UBS, told CNBC this morning.
Today's wobbly start came after Monday's selloff that shaved nearly 300 points, or more than 3 percent, off the Dow as worries about a huge jump in troubled loans at Bank of America stirred worries about the banks.
Bank stocks were mostly lower as Bank of New York Mellon validated fears about earnings in the sector, reporting its first-quarter profit fell by more than half as fees tumbled. The bank also slashed its dividend 63 percent in an effort to build capital.
“US financials have enjoyed a very strong rally over the last two months … to an extent you are seeing a welcome dose of reality into the sector,” Jonathan Reoch, senior portfolio manager at AMP Capital Investors, told CNBC.
The big downer outside of banks was Dow component and construction bellwether Caterpillar, which widely beat analyst expectations excluding items, but said 2009 would be more difficultthan this year.
Fellow Dow component Coca-Cola posted earnings that met expectations but revenue disappointed.
And DuPontposted a sharp drop in earnings compared with the year-ago period and missed analysts’ revenue expectations, citing weak demand.
Tech stocks advanced, with Yahoo up about 4 percent ahead of its earnings and Intel up about 2 percent.
IBM declined even as one portfolio manager slapped the stock with a "buy" rating.
And Broadcom declined as the chip maker, which is buying networking-equipment maker Emulex , reported a loss of 19 cents a share, missing expectations — analysts had expected a 3-cent profit.
In the health-care sector, Schering-Ploughsaid quarterly revenue fell 6 percent to $4.39 billion but reported higher-than expected first-quarter earnings.
UnitedHealth Group reported itsfirst-quarter profit came in slightly lower as membership in commercial plans for employers fell but beat expectations.
Pharmaceutical giant Merck reported earnings of 74 cents a share, which missed estimates by 3 cents. The company said it was hurt by global sales weakness and costs relating to its acquisition of Schering-Plough.
In other news, the government’s TARP scheme came under fire from a new official report. TARP's special inspector general said that the private-public partnership deal, which is intended to free banks from their “toxic assets,” is skewed in favor of private investors and creates "potential unfairness to the taxpayer."
Meanwhile, troubled automakers Chrysler and General Motors will have access to a new credit line from the government, according to an independent oversight report on the Treasury Department's corporate rescue fund.
Chrysler will be able to tap about $500 million from the Obama administration, while General Motors will be able to access up to $5 billion, the rescue fund said.
Government cash could also finding its way to the International Monetary Fund, after President Barack Obama proposed a $100 billion US loan to the organization.
This Week:
TUESDAY: Citigroup shareholders meeting; Earnings from Yahoo, Broadcom and Capital One after the bell
WEDNESDAY: Weekly mortgage applications; weekly crude inventories; Earnings from AT&T, Boeing, McDonald's, Morgan Stanley, Wells Fargo, Altria, Ingersoll-Rand, Kimberly-Clark, Apple, eBay, Qualcomm and Yum! Brands
THURSDAY: Weekly jobless claims; existing-home sales; Earnings from Conoco-Phillips, GlaxoSmithKline, Pepsi, UPS, Fifth Third, Marriott, PNC Financial, SunTrust, Union Pacific, US Air, Microsoft, Amazon, AmEx and Burlington Northern
FRIDAY: G-7 meeting in Washington; durable-goods orders; new-home sales; Earnings from 3M,Honeywell, Schlumberger and Xerox
Send comments to cindy.perman@nbcuni.com.