NEW YORK – Stocks ended mixed Wednesday, with an investigation into the insurance industry, weaker-than-expected earnings from J.P. Morgan Chase (JPM) and rising crude prices among the factors weighing on Wall Street. Tech shares advanced on strength in semiconductor stocks.
The Dow Jones industrial average (search) closed down 10.69 points, or 0.11 percent, at 9,886.93. The Standard & Poor's 500 Index (search) ended up 0.43 of a point, or 0.04 percent, at 1,103.66. The technology-laced Nasdaq Composite Index (search) rose 10.07 points, or 0.52 percent, to 1,932.97.
Investors have been closely watching earnings reports for signals that the economy might pick up before the end of the year, but indicators are mixed so far. Oil has also been in focus, amid growing concern that persistently higher energy costs will weigh heavily on the economy in the months ahead.
A shortfall in gasoline and heating oil pushed crude prices back above the $54 level, solidly reversing a two-day retreat. Inventories of distillate fuels, which include heating oil and diesel, fell for a fifth week. The data distracted investors from a slew of profit reports.
"This will go down as the earnings season that fell on deaf ears," said Arthur Hogan, chief market analyst at Jefferies & Co. "The major news is oil prices, and what that will do to consumer demand, the economy, corporate profits and the future. That's the driver. Does it have an effect? It is the focus. It's larger than earnings, and right now it's larger than the election."
Growing concern about how much energy prices will weigh on the economy in the months ahead kept Wall Street's attention riveted on oil prices. Fears about a narrowing global supply cushion sent crude dashing from $35 a barrel to $55 a barrel in just seven weeks, and the fact that oil remains at lofty levels has cast a long shadow over stocks. The government's inventory report, which showed lower-than-expected supplies of crude and refined products, sent oil futures surging $1.63 to settle at $54.92 on the New York Mercantile Exchange (search).
A number of other factors were pressuring stocks as well, including the ongoing investigation of the insurance industry by New York attorney general Eliot Spitzer's (search) office, recent negative news for big drug makers and general uncertainty surrounding the presidential race. Investors have also been watching earnings reports for signals that the economy might pick up before the end of the year, but indicators have been mixed so far. Some analysts remained upbeat, noting that the fourth quarterly tends to be a seasonally strong period.
"In view of all of the worries, the election, oil being stubbornly above $50 a barrel, for the market to be where it is, is pretty impressive," said Barry Berman, head trader for Robert W. Baird & Co. in Milwaukee. "Any catalyst, I think, could really get the market going. I think there's a lot of buying power out there, it's just a matter of having the courage to step in."
The Philadelphia Semiconductor Index advanced 1.31 percent a day after bellwether International Business Machines Corp. (MSFT) delivered better-than-expected earnings and an upbeat forecast for high-tech spending. Shares of the company rose 1.8 percent, or 52 cents to $28.70 on optimism before its third-quarter earnings report Thursday. Semiconductors staged a nice rebound, with Intel Corp. closing up 3 percent, or 65 cents at $21.45.
JPMorgan Chase, a Dow component, shed 73 cents to $37.25 after reporting a 13 percent drop in third-quarter profits, in part due to costs related to its merger with Bank One. Earnings for the nation's second largest bank missed estimates by a wide margin.
Appliance maker Whirlpool Corp. (WPL) reported a 4 percent drop in third-quarter profit and cut its profit outlook for the full year. Whirlpool shares fell $1.31, or 2.2 percent, to $58 on the INET electronic brokerage system.
Pfizer Inc. (PFE) lost 70 cents to $28.30, despite a 50 percent surge in profits over last year on strong sales of its cholesterol drug Lipitor and pain reliever Celebrex. Excluding charges, the world's largest drug company earned 55 cents per share, beating Wall Street's forecast by a penny.
United Technologies Corp. (UTX) was down 15 cents at $89.90 even after reporting a 13 percent increase in third-quarter profits amid the continuing recovery of the aerospace industry and strong growth at its Otis elevator division.
Diversified manufacturer Honeywell International Inc. (HON) posted a rise in quarterly profit as strong demand for aerospace equipment and automobile components boosted revenues.
Trading was heavy, with 1.69 billion shares changing hands on the New York Stock Exchange, above the 1.4 billion daily average for last year. About 1.6 billion shares were traded on Nasdaq, above the 1.69 billion daily average last year.
Advancers outnumbered decliners on the NYSE by about 6-to-5, and about 4-to-3 on Nasdaq.
The Russell 2000 index, which tracks smaller company stocks, was up 3.46, or 0.61 percent, at 570.13.
Overseas, Japan's Nikkei stock average lost 1.65 percent. In Europe, France's CAC-40 was down 0.94 percent, Britain's FTSE 100 declined 0.83 percent and Germany's DAX index sank 1.30 percent.
Reuters and the Associated Press contributed to this report.