Market Snapshot July 22, 2009, 4:30PM EST

Stocks Finish Mixed

The Nasdaq outperformed on strength in Apple and Starbucks. Bernanke wrapped up his two-day monetary policy testimony

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U.S. stocks closed mixed Wednesday, with the Dow industrials and S&P 500 lagging behind the Nasdaq composite index amid some profit taking on recent gains.

Consumer and tech shares were among the biggest winners, aided by better-than-expected earnings posted by Starbucks Corp. (SBUX) and Apple Inc. (AAPL), respectively.

KB Home (KBH), Lennar Corp. (LEN), and other homebuilders rose on a 0.9% rebound in the May FHFA home price index. Banks were flat to weaker after Morgan Stanley & Co. (MS) and Wells Fargo & Co. (WFC) posted earnings.

On Wednesday, the 30-stock Dow Jones industrial average finished lower by 34.68 points, or 0.39%, at 8,881.26. The broad Standard & Poor's 500-stock index edged lower by 0.51 points, or 0.05%, to 954.07. The tech-heavy Nasdaq composite index 10.18 points, or 0.53%, to 1,926.38.

Trading was slow before Thursday's reports

on weekly initial jobless claims and existing home sales.

Treasuries and the dollar index fell. Gold futures rose. Crude oil futures were narrowly mixed.

Some 175 companies were reporting results Wednesday. Banks grabbed the spotlight, with clear indications that credit losses continue to be a big problem.

Federal Reserve Chairman Ben Bernanke told the Senate Banking Committee Wednesday that the Fed will tighten monetary policy when necessary but the economy is too weak to do it now. Committee members questioned whether the central bank will tighten soon enough when it becomes necessary, balked at giving Bernanke's Fed additional powers, and argued for more Fed transparency.

"There's been short squeezing but no panic buying," says S&P MarketScope.

Wells Fargo posted $0.57 vs. $0.53 second-quarter earnings per share (EPS) on a sharp revenue rise. On a quarter-over-quarter basis, revenue rose 28%. While EPS beat Street expectations,the company noted that credit losses rose in the second quarter, as expected, due to a weak economy and higher unemployment. Wells said it expects credit losses and nonperforming assets to increase, although it is beginning to see some moderation in rate of growth of losses in a number of consumer portfolios.

Morgan Stanley posted a $1.37 second-quarter loss per share from continuing operations vs. $0.61 EPS on 11% lower net revenue. On a GAAP basis, Morgan Stanley posted a $1.10 loss, vs. $1.02 EPS.

US Bancorp (USB) reported $0.12 vs. $0.53 second-quarter EPS as higher loan loss provisions and credit costs offset a 9.4% revenue rise.

KeyCorp (KEY) posted a $0.68 second-quarter loss per share vs. a $1.09 loss despite a 3.5% decline in net interest income. Wall Street was looking for a loss of $0.41. KeyCorp said the loss for the current quarter was largely the result of an increase in provision for loan losses.

SunTrust Banks Inc. (STI) posted a $0.41 second-quarter loss per share vs. $1.52 EPS on a 16% revenue drop (fully taxable equivalent). The decrease in earnings compared to 2008 is primarily attributable to increased credit costs in 2009 and the gain on the sale of shares of Coca-Cola Co. in the 2008 second quarter.