Stocks finished Thursday’s volatile session mixed, with blue-chip stocks weighed down by uncertainty over oil prices and a new investigation of the insurance industry. Technology stocks were boosted by eBay’s strong earnings.
The Dow Jones industrials were pressured by American International Group Inc., which missed estimates on its latest earnings and announced that it was the subject of a grand jury probe. And while pharmaceutical stocks were up on positive earnings news, Dow components IBM Corp. and Caterpillar Inc. were heavily sold off.
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.
“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.”
The blue-chip Dow Jones industrial average was off 21.17 points, or 0.2 percent, at 9,865.76 by the close. Earlier in the session the index fell below the its lowest close of the year to date — 9,814.59, seen on Aug. 12.
Broader stock indicators finished Thursday higher. The Standard & Poor’s 500 index was up 2.83 points, or 0.3 percent, at 1,106.49, while the technology-focused Nasdaq composite index fared even better, jumping 20.65 points, or 1.1 percent, to 1,953.62.
The markets were cheered somewhat by the Labor Department’s latest report on first-time jobless claims, which fell 25,000 to 329,000 last week, the lowest level since early September.
However, investors were disappointed with the latest reading of the Conference Board’s Index of Leading Economic Indicators fell for a fourth straight month in September. The index, which measures future economic potential, fell 0.1 percent for the month — a sign that the economy continues to lose momentum.
Positive earnings from European drug makers helped minimize blue chip losses in the healthcare sector. AstraZeneca PLC 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 Corp. 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. Eli Lilly & Co. beat estimates by a penny per share, but lowered its outlook and announced additional 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.”
Struggling Merck & Co., 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.
The Dow was also held back by AIG’s announcement that it is the target of a federal grand jury investigation in Indiana over its corporate insurance products. The insurance giant also missed its third-quarter earnings expectations by a penny per share. AIG slid $1.15 to $56.45.
And despite positive earnings this week, both IBM and Caterpillar fell sharply Thursday. IBM lost 72 cents to $88.10, while Caterpillar tumbled $3.35 to $77.03 on a lower outlook for future earnings.
Tech stocks received a boost from eBay Inc.’s upbeat earnings, announced after the session Wednesday. 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.
AT&T Corp. 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.
Overseas, Japan’s Nikkei 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 gained 0.55 percent.