Stocks Struggle; Boeing, United Tech Gain

Stocks wobbled in mid-afternoon trading Wednesday. Technology and industrials gained while health-care and telecom shares continued to drag.

The Dow slipped, led by Merck, Intel and Bank of America. Boeing, United Technologies and Proctor & Gamble were among the gainers.

The S&P 500 and Nasdaq also declined.

Technology and industrials advanced as investors continued to make recovery bets.

Volatility seems to have subsided as well: After pushing 20 last week, the CBOE volatility indexfell below 17.

Oil pricesslipped to near $83 after U.S. government data showed an unexpected increase in crude inventories and fuel stocks. The dollar rose against the euro and gold pricesrose toward $1,150 an ounce.

AT&T topped forecasts as the company added 1.9 million subscribers during the quarter but investors sold off the stock amid worried that the number of new subscribers with contracts added was nearly half of what it was a year earlierand the lowest since 2004, suggesting the market may be getting saturated.

Other telecoms and related stocks were also lower, including chip maker Qualcomm , which reports after the bell today.

There’s rumors about the telecom sector building inventory, which is not true, said Ed Snyder, managing director of Charter Equity and added that investors are still skeptical about the industry as the macro conditions aren't coming back fast enough.

“The industry is on a rebound and it will continue for a while,” he said. “When things start to pick up—it's going to kick in in the third quarter.”

Gilead Sciences skidded after the HIV-drug maker slashed its full-year outlook, citing health-care reform and lower-than-expected sales of its HIV drugs.

Morgan Stanley continued the parade of big-bank beats, swinging to a profit of 99 cents a sharein the first quarter from a net loss of 57 cents a share a year earlier amid strong trading revenue.

This came after Goldman Sachs reported its earnings doubledduring the quarter. Its stock was higher today.

But Wells Fargo skidded after the bank reported its profit fell amid a drop in mortgages.

However, this morning brought some good news on the housing front: Mortgage applications bounced back from three-month lows last week as buyers rushed to take advantage of the federal-tax credit before it expires and refinancing picked up. The average on the fixed 30-year dropped to around 5 percent.

Apple also reported its earnings doubledduring the quarter, but its stock rose as investors cheered the company's position, including news that its market share of the future customer base — college students and Chinese consumers — is on the rise. In addition, at least 16 brokerages raised their price targets on the iPhone maker.

Elsewhere, McDonald's posted earnings of $1 a share, slightly ahead of estimates, while Boeing also beat estimates.

Yahoo and Seagate Technology also beat Street estimates with their latest numbers after the bell Tuesday, but Yahoo shares tumbled as investors questioned the profitability of the firm's search business.

Altera sharesdropped despite the fact that the company reported better-than-expected quarterly earnings and predicted second-quarter revenue would beat Wall Street estimates. At least eight brokerages raised their price targets on the semiconductor firm.

Ninety-four percent of companies have beat Wall Street estimates so far, but it is "interesting to note that less than half of the companies that beat expectations traded up on earnings," analysts at Jefferies pointed out in a research note.

After the bell, earnings reports from eBay, E*Trade, Qualcomm and Sandisk will be released, among others. The morning's notable reports include Pepsi and Verizon.

Despite positive signs from corporate earnings, some investors are growing concerned that stocks can't continue to push higher.

Markets are in a "very dangerous situation" because they are over-extended, Philippe Gijsels, head of research at BNP Paribas Fortis Global, told CNBC. "I think we're very close to the end of this buying frenzy," he warned.

Investors have been buying on dips because there is still a lot of liquidity around and some have been making up for missing the rally, Gijsels added.

Transocean shares dropped after an explosion and fire on Tuesday at one of the company's drilling rigs off the Louisiana coast, which left up to a dozen crew members missing and at least seven critically wounded.

Airline stocks were mostly lower after the industry lost an estimated $1.7 billion in revenue in the aftermath of the Icelandic volcano. United Parent UAL and Continental shares tumbled as merger talks continued. United is also in the midst of talking about a possible merger with U.S. Airways .

Also on the M&A front, Google slipped amid buzz that the Internet giant may be in talks to acquire travel-software maker ITA Software in an attempt to break into the online-travel booking business. Reports suggest the deal could be as much as $1 billion.

This Week:

WEDNESDAY: Earnings from eBay, Starbucks, Qualcomm & Sandisk after the bell
THURSDAY: PPI; weekly jobless claims; existing-home sales; Earnings from Pepsi, Verizon, Fifth Third, PNC Bank, American Express, Microsoft & Capital One
FRIDAY: Durable-goods orders; new-home sales; Earnings from Travelers, Honeywell, Schlumberger & Xerox

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