Stocks ended mixed with strong earnings from aerospace giant Boeing (BA) lifting the blue chips while the Nasdaq was pulled down by mixed corporate news. A spike in the price of crude oil to a record high dampened enthusiasm for buying equities.
The Dow Jones industrial average ended up 31.93 points, or 0.32%, at 10,117.07, after trading lower most of the session. The broader Standard & Poor's 500 index added 0.59 of a point, or 0.05%, to 1,095.42. But the tech-heavy Nasdaq composite lost 10.84 points, or 0.58%, to 1,858.26.
Looking ahead, Thursday will be another packed day as far as earnings announcements go. Stepping up will be energy outfits ExxonMobil (XOM), Duke Energy (DUK), and Apache (APA), consumer products giant Gillette (G), and defense contractor Northrop Grumman (NOC).
As far as economics news, the report to get the most attention is likely to be the jobless claims report for the week of July 17 as the slow-to-recover labor market has been of concern to the public and government alike.
Lifting the Dow was Boeing, which posted expectation-topping second quarter profit of $607 million and increased its full year estimates for 2004 and 2005. The company was helped by a better outlook for its commercial airline business.
Dragging on the Nasdaq were companies such as private university and college operator Career Education (CECO). The company reported higher quarterly earnings but warned that the growth of students in the company's online campus was lower than expected.
Oil prices weighed on the overall market as higher energy prices can cut into corporate profits. September crude oil futures rose $1.06 to a record closing high of $42.90, just below their $43.05 intraday high, as a Russian court told the giant Yukos oil concern to stop selling the 1.7 million barrels a day oil it produces. Standard & Poor's says some traders see crude oil rising to $45 soon.
In other equities news, Newmont Mining (NEM), the world's No. 1 gold producer, posted nearly 60% lower quarterly profit because of charges it took to reduce the value of a Turkish mine and an investment in a Canadian gold miner.
Also on a down note, PeopleSoft (PSFT) warned it would not meet current full-year profit estimates because Oracle's (ORCL) hostile takeover bid would hurt demand for its business software.
And IT services company Electronic Data Systems (EDS) warned it would cut its quarterly dividend to 5 cents a share from 15 cents a share.
Royal Caribbean Cruises (RCL), the world's No. 2 cruise operator, posted second-quarter earnings that more than doubled as prices and passengers increased.
Marsh & McLennan (MMC), the world's largest insurance broker, posted 7% higher quarterly profit as insurance-related fees offset declines at Putnam Investments.
Time Warner (TWX) reported expectation-topping earnings, thanks to higher advertising sales at its networks and a record box office from its latest Harry Potter movie.
Comcast (CMCSA), the No. 1 U.S. cable operator, reported a quarterly profit, vs. a year-ago loss, as a jump in high-speed Internet customers offset a loss in basic video subscribers.
Monster Worldwide (MNST), which owns online job-hunting service Monster.com, reported 75% higher earnings on stronger revenues, citing solid business at its Monster and advertising and communications units.
Biogen Idec (BIIB) reported a second quarter profit, owing to stronger sales of multiple sclerosis drug Avonex and cancer drug Rituxan.
Cosmetics seller Avon Products (AVP) reported higher quarterly profits as business boomed in foreign markets flourished and representatives' sales grew.
Electricity generator Dynegy (DYN) reported a second-quarter profit vs. a year-ago loss, in part because of higher electricity sales volumes at its power production unit.
Meantime, economic news was not encouraging. Durable goods orders rose 0.7% in June, with shipments up 0.7%, while orders were expected to be up roughly 1.5% to 1.8%, according to Informa. "So this is a bit of a disappointment," Informa says. The good news was that core capital goods (excluding defense and aircraft) were up 1.2%, Informa says.
The Fed's Beige Book, which looks at various regional economic indicators, was nothing more than lukewarm. "The economy overall is described as continuing to expand - hardly a ringing endorsement," says Informa. Several districts reported that the pace of growth moderated. Factory activity increased, but with pockets of weakness. Retail sales slowed, with no district reporting an increase. Wages and salaries were generally flat, with benefits costs rising.
After some hefty selling earlier in Wednesday's session, Treasuries roared back to close higher in price. The surge in oil prices, and short-covering by techs and speculative accounts, were among the factors behind the move, according to Informa Global Markets. Stellar results from the Treasury's auction of 2-year notes sparked only a modest bid.
European stock markets finished mixed on Wednesday. London's Financial Times-Stock Exchange 100 index was up 31.20 points, or 0.72%, to 4,356.20 in a carryover of Tuesday's strong U.S. rally. BG Group was higher after saying second quarter net rose 41% because of higher energy prices and rising production. BP was higher after two brokerages raised their 2004 earnings estimates. HBOS was higher after saying first half growth topped estimates. BHP Billiton was up after it increased production in the fourth quarter to meet rising demand from China.
Germany's DAX index fell 6.87 points, or 0.18%, to 3,807.21 despite news that Germany's RWI economic institute raised its growth forecast for 2004 to 2.1%, just beyond the Bundesbank's forecast range of 1.5% to 2.0%. But German Gfk consumer confidence dropped to 3.4 in July from 3.9 in June, a sharp contrast to the surge in German July Ifo business sentiment reported on Tuesday. Merck KgaA was higher after Equinet Institutional Services analyst raised the firm's rating on stock to buy from hold. DaimlerChrysler AG was higher after it was expected to report higher second quarter earnings on Thursday. IDS Scheer AG was higher after news second quarter earnings rose 10%.
In Paris, the CAC 40 index advanced 10.82 points, or 0.30%, to 3,575.92 as a French July business confidence index rose to a 3-year high of 106 from a downwardly revised 104 in June. Renault was higher after saying its first half earnings rose 29%. PSA Peugeot Citroen was higher after three brokerages raised their ratings on the stock. Bigben Interactive was up after saying second quarter sales would be in line with those of Q1. BNP Paribas was up after agreeing to buy 50% stake in Russian Standard Group.
Asian markets finished higher on Wednesday. Japan's Nikkei 225 index gained 172.83 points, or 1.57%, to close at 11,204.37, with tech stocks leading gains. Sony rose 1.82% after it posted a surprise quarterly profit for the three months ended June 30 as a weaker yen boosted overseas sales. Sharp shares surged 2.07% after the company posted a 22% rise in quarterly profit. Automakers also trended higher, with Honda Motor up 2.39% after it posted an unexpected 0.3% rise in quarterly operating profit. Daiwa Securities also announce stellar results, with quarterly profit jumping 30% year-over-year.
But shares of UFJ Holdings tanked nearly 3% after reports said a Tokyo court ordered the bank to suspend the sale of its trust bank unit, which may raise uncertainty over its planned merger with Mitsubishi Tokyo Financial Group. On the economic front, Japan's retail sales fell 2.9% in June from one year ago, recording the fourth straight month of declines, hurt by poor sales of clothing and bad weather.
In Hong Kong, the Hang Seng index added 18.95 points, or 0.15%, to close at 12,320.27, lifted by gains in tech stocks. But oil refiner Sinopec fell after reports said ExxonMobil is considering selling its 19% stake in the company.