) and jitters over earnings from database software company Oracle's (ORCL
After the market closed, Oracle posted lower fiscal fourth-quarter profits that still were in line with Wall Street's expectations. The company was scheduled to host a conference call to discuss its recent results -- and the outlook for its business -- at 5:30 p.m. EDT.
The Dow Jones industrial average gained 18.70 points, or 0.19%, to 9,706.12. The Nasdaq composite index pulled back 10.47 points, or 0.67%, to 1,542.82. And the Standard & Poor's 500 index added 0.94 of a point, or 0.09%, to 1,037.11.
On Wednesday, several high profile companies are scheduled to release their quarterly results, including investment banks Morgan Stanley (MWD
) and Bear Stearns (BSC
) and fashion house Gucci (GUC
The economic data calendar, however, is clear on Wednesday. More data are expected on Thursday with the release of U.S. trade figures in April and weekly jobless claim figures for the week ending June 15.
On Tuesday, the market struggled for direction as investors weighed the latest reports of economic strength against disappointing news about big-name companies such as IBM.
IBM shares moved lower after Morgan Stanley lowered its 2002 and 2003 revenue forecasts for Big Blue, blaming ongoing weakness in tech spending. Hardware, IBM's specialty, is expected to be especially challenging, Morgan Stanley says.
Wall Street's big players continue to feel the pain of the economic downturn. Lehman Brothers (LEH
) said its quarterly profit fell 31% as strength in bond operations could not offset weakness in stock trading and investment banking.
Electronics retailers were also in the news. Best Buy (BBY
), the top U.S. consumer electronics retailer, reported a 27% rise in quarterly earnings on better sales as a result of price cuts and increased marketing. The shares weakened, though, as the company gave a less stellar forecast for the current quarter.
Meanwhile, Circuit City (CC
), the No. 2 player in the business, said first-quarter profit increased as it revamped stores, spent more on ads and increased its home entertainment product assortment. It stuck to previously issued earnings per share guidance.
Home goods retailer Pier 1 Imports (PIR
) stunned investors with fiscal first-quarter profits that nearly doubled on a 9.5% increase in same-store sales and an improvement in profit margins.
The latest report on the housing market showed continued strength. U.S. housing starts rose 11.6% to a 1.73 million unit annual pace in May. This is the largest rise since July, 1995, and well above consensus forecasts for a 2.9% gain. Housing permits gained 2.6% to a 1.673 million unit pace. Clearly, low mortgage rates, nesting and economic recovery continue to bolster the housing sector, says Standard & Poor's MMS.
The May reading on the consumer price index, a gauge of inflation at the consumer level, came in as expected, with the core components (excluding food and energy) up 0.2%. Overall CPI was unchanged. Data in line with these expectations are expected to support buying of bonds.
In a volatile session, U.S. Treasuries ended mixed. Short-term notes got some help from The Treasury's decision to postpone a two-year note auction due to debt limit considerations. The Treasury was due to announce the details of the offering Wednesday afternoon. The announcement will be made, says S&P, when the Treasury has assurances that it will have sufficient borrowing authority.
European markets finished lower. In London, the Financial Times-Stock Exchange 100 index ended down 54.80 points, or 1.15%, to 4,702.00. In France, the CAC 40 lost 5.43 points, or 0.14%, to 4,004.93. And in Germany, the DAX Index fell 41.25 points, or 0.92%, to 4,433.85.
In Asia, the markets finished higher. In Japan, the Nikkei gained 175.82 points, or 1.65%, to close at 10,839.93. Tokyo stocks bounced back from a four-straight day fall on Tuesday following an upgrade by Morgan Stanley of the weighting of Japanese equities in its global model portfolio, in addition to a sharp rebound in U.S. stocks Monday. In Hong Kong, the benchmark Hang Seng index gained 19.78 points, or 0.18%, to close at 10,852.04.