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Stocks turn higher in early trading as investors sort through mixed earnings, Europe worries
NEW YORK (AP) ' Stocks wavered in early trading Tuesday after disappointing corporate earnings reports and concerns that France and Germany may not reach an agreement on additional support for Greece. The financial sector, however, outpaced all others in gains after Bank of America topped Wall Street expectations for the quarter.
Moody's also warned late Monday that the stable outlook for France's top-notch credit rating is under pressure. The country's finance minister said that the French economy will likely grow a rate of less than 1.5 percent next year. France is Europe's second-largest economy.
The Dow Jones industrial average rose18 points, or 0.1 percent, to 11,415 at 11:20 a.m. Eastern. International Business Machines tugged on the Dow, falling 5 percent, the most of any Dow stock by far. The company's revenue raised questions about new business. Of the 30 Dow stocks, 20 traded higher.
The S&P 500 rose 4 points, or 0.3 percent, to 1,204. The Nasdaq composite rose 1 point to 2,616.
Investors were also troubled by reports that France and Germany remain divided on a plan to provide more support for ailing Greece. An agreement between the two countries, the two largest economies that use the euro, is seen as the bedrock for a rescue package that can pass all 17 countries that share the euro.
Concerns about the possibility of a European credit crisis have driven many of the market's big swings lately. The Greek government is widely expected to go through some kind of default or restructuring of its debt. If that process becomes disorderly, European banks that hold Greek government bonds may find it difficult to raise money from other banks. That, in turn, could trigger a freeze in credit markets, delivering another blow to an already weak European economy and the global financial system.
Tuesday brought full day of corporate earnings reports in the U.S. International Business Machines Corp. fell 4 percent after missing Wall Street's revenue estimates last quarter. It reported after the markets closed Monday.
Bank of America Corp. rose 6 percent after it said accounting gains and the sale of a stake in a Chinese bank helped it beat analysts' earnings estimates. Goldman Sachs rose 1 percent, even after reporting its second quarterly loss since going public in 1999. The loss was more than analysts expected.
UnitedHealth Group Inc.'s fell 4 percent after its third-quarter profit dipped. The country's largest health insurer by sales said medical costs climbed and more patients visited their doctors' office.
Coca-Cola Co. lost half of 1 percent after narrowly beating Wall Street's earnings estimates. Johnson & Johnson slid 0.2 percent after posting a 6 percent in decline in third-quarter profit, roughly in line with analyst expectations.
Apple Inc. and Intel Corp will report their results from the last quarter after the market closes.