TheStreet.com

I Markets I
Stocks Lift After Bumpy Start
By Sarina Penn
TheStreet.com Staff Reporter
05/12/08 11:01 AM EDT

Updated from 9:44 a.m. EDT

Stocks in the U.S. saw some mixed action early Monday, but were lately holding on to their gains, as traders weighed cooling oil futures against a negative-leaning pile of corporate earnings reports.

The Dow Jones Industrial Average started stronger before dipping nearly to the flat line, but recently the index was better by 45 points at 12,791. The S&P 500 went negative midmorning before rising again, by 3 points at 1391, and the Nasdaq Composite was spiking 16 points at 2461.

The advance came as crude retreated from some of last week's massive gains, losing 96 cents at $125 a barrel in recent trading.

Even though the nationwide average for gas prices at the pump touched an all-time high of $3.718, according to AAA, retailers were taking benefit from reprieve in crude. Retailers Wal-Mart (WMT:NYSE) and Home Depot (HD:NYSE) were among the best performing Dow components, and both the Dow Jones U.S. Retail Index and the S&P Retail Index ramped up 0.8% and 0.6%, respectively.

At the same time, gold futures lost $1.80 to $884 an ounce. The U.S. dollar lost grip on some of its early gains against the euro, and was recently dipping by 0.1% to $1.5490. Against the yen, however, the greenback remained higher by 0.5%.

MBIA (MBI:) had a brief stumble out of the gate, but was recently leaping 10.2%, despite losing $2.41 billion in the first quarter. The loss came as the beleaguered bond insurer took a $3.6 billion hit in unrealized losses on insured derivatives.

Mortgage insurer PMI (PMI:NYSE) also swung to a quarterly loss, and rival Radian (RDN:NYSE) did the same when excluding unrealized gains on derivatives and hybrid securities. Keeping in those gains, the company said its profit came to $195.6 million. Shares were tacking on 2.5% and 7.9%, respectively.

Also swinging to a first-quarter loss was mortgage lender IndyMac (IMB:) . The firm, which lost $184.2 million, or $2.27 a share, warned that it won't achieve a profit until the plunge in housing prices eases up. Shares were plunging 8.8%.

HSBC (HBC:) was up 2.9%, however, after saying first-quarter earnings climbed from last year, thanks to its success in emerging markets such as Asia. That came even as the Britain-based bank wrote down $2.6 billion in assets and doubled its loan-impairment charges.

Away from financials, Sprint Nextel (S:) recovered from an initial fall despite sharply widening its first-quarter loss to $505 million, or 18 cents a share, as it continued to lose subscribers. Stripping out one-time expenses, Sprint made 4 cents a share, or 2 cents better than expected, even as revenue fell short.

XM Satellite Radio (XMSR:NYSE) also lost more money in its latest quarter, missing the consensus target, but shares ticked up 1.3%. XM's merger partner Sirius (SIRI:Nasdaq) , which is expected to post its results following the close of trading, was ahead by 1.8%.

Meanwhile, confirmation came that Cablevision (CVC:) has agreed to pay Tribune Co. $650 million for the Long Island newspaper Newsday. Over the weekend, Rupert Murdoch's News Corp. (NWS:) retracted its own $580 million offer for the paper. Cablevision slipped 1.8%, and News Corp. fell back 0.8%.

Elsewhere, after Friday's market close FedEx (FDX:) said harsh economic conditions and climbing fuel prices have squeezed its bottom line, and the package-delivery outfit slashed its current-quarter earnings forecast. Shares were down 1.2%.

Treasury prices were hiking up. The 10-year note lifted by 11/32 in price to yield 3.73%, and the 30-year bond added 22/32 in price, yielding 4.48%.

Markets abroad were mixed. In Asia, Tokyo's Nikkei 225 added 0.6% overnight. Hong Kong was closed. Among European exchanges, the FTSE 100 in London and the Paris Cac reversed early gains to step back roughly 0.1% apiece. Germany's Xetra Dax was up 0.2%.

Try a 30-day FREE trial to RealMoney.com!