NEW YORK – Stocks were mixed Thursday, with blue chips weighed down by news that insurer American International Group was being investigated by a federal grand jury, while techs got a boost from eBay's earnings.
The Dow Jones industrial average (search) closed down 21.17 points, or 0.21 percent, at 9,865.76. But the Standard & Poor's 500 Index (search) added 2.83 points, or 0.26 percent, to end at 1,106.49. The Nasdaq (search) gained 20.65 points, or 1.07 percent, to close at 1,953.62.
"Considering where oil is and the mixed earnings we've had, I think the market's holding in there valiantly," said Joseph Battipaglia, chief investment officer at Ryan Beck & Co. "Tech stocks are providing a little leadership, but there's no follow through. We'll need a bigger catalyst to break out of this trading range we're in."
AIG (AIG) said the U.S. attorney for the Southern District of Indiana had informed the company that the grand jury investigation was looking into "non-traditional insurance or income-smoothing products marketed by AIG."
The company also announced third-quarter earnings rose despite losses related to four hurricanes. AIG said it could not estimate the potential impact of the separate probe into the insurance industry by New York Attorney General Eliot Spitzer (search).
Worried investors saw a little relief from oil prices, which remained below the $55 per barrel mark. A barrel of light crude closed at $54.47, up 6 cents, on the New York Mercantile Exchange. Oil prices are pushing toward record peaks again after a larger-than-expected decline in heating fuels in the United States heightened fears of a winter supply crunch.
Despite positive earnings this week, both IBM and Caterpillar fell sharply Thursday. IBM lost 72 cents to $88.10, while Caterpillar (CAT) tumbled $3.35 to $77.03 on a lower outlook for future earnings.
EBay Inc. (EBAY), the world's largest online market place, boosted the Nasdaq a day after posting a 77 percent increase in quarterly profit. The online auctioneer beat Wall Street expectations by a penny per share as both revenue and profits soared from a year ago. eBay surged $8.23 to $99.59.
The markets were cheered somewhat by the Labor Department's (search) latest report on first-time jobless claims, which fell 25,000 to 329,000 last week, the lowest level since early September.
Struggling Merck & Co. Inc. (MRK), a Dow component, slipped 14 cents to $31.26 after it missed Wall Street forecasts by 11 cents per share due to charges related to the withdrawal of its arthritis drug Vioxx from the market.
Positive earnings from European drug makers helped minimize the early losses. AstraZeneca (AZN) climbed 87 cents to $40.50 after it announced a 19 percent jump in profits, while Novartis AG gained 53 cents to $47.23 after it beat Wall Street expectations by 5 cents per share.
U.S. pharmaceutical company Schering-Plough (SGP) swung to a profit in the third quarter, posting earnings of a penny per share, with analysts expecting a loss of a penny per share. Schering-Plough gained 26 cents to $16.98. Likewise, Eli Lilly & Co. (LLY) beat estimates by a penny per share, but lowered its outlook and announced a series of job cuts. Lilly was down $2.46 at $52.64.
"I think people are looking more at forecasts and outlooks than at earnings," said David Legeay, senior vice president at McDonald Financial Group. "When you look at the economy going forward, you really want to see strong guidance for the fourth quarter and next year, and we're not getting it."
Diversified manufacturer United Technologies Corp. (UTX) helped buoy the Dow as its stock rose 1.5 percent to $91.20, a day after it posted a 13 percent rise in quarterly profit.
AT&T Corp. (T) rose 22 cents to $15.80 after it said it lost $7.12 billion in the third quarter, blaming charges related to the company's withdrawal from the traditional landline telephone market.
The Russell 2000 index of smaller companies was up 6.53, or 1.2 percent, at 576.66.
Overseas, Japan's Nikkei stock average fell 0.85 percent. In Europe, Britain's FTSE 100 closed up 0.02 percent, France's CAC-40 rose 0.6 percent for the session, and Germany's DAX index gained 0.55 percent.
Reuters and the Associated Press contributed to this report.