Stocks Hover in Neutral Territory
07/22/08 - 01:04 PM EDT
Mike Taylor
Updated from 10:33 a.m. EDT
After disappointing earnings from technology and financial firms prompted a skittish start for U.S. stocks Tuesday, the major indices bounced up to skip along the baseline as a slide in oil prices and a rally in the dollar helped to reduce investor pessimism. The Dow Jones Industrial Average was up 36 points at 11,503, and the S&P 500 rose half a point to 1261. The Nasdaq was 4 points lower at 2275. After Monday's close, Apple (AAPL Quote - Cramer on AAPL - Stock Picks) delivered third-quarter earnings that exceeded expectations, but it guided below the targets for the current quarter. Shares were recently down 7.8%. Texas Instruments (TXN Quote - Cramer on TXN - Stock Picks) missed on profits and provided a disappointing outlook. Its shares were sinking nearly 16%. Investors had been anticipating that relief from the government stimulus package and action by the Federal Reserve would prop up cyclical and technology companies, said Matthew Smith, vice president and portfolio manager for Smith Affiliated Capital. "That just hasn't transpired." "If you take technology, it's a pulse of the market going forward. It's basically suggesting that you're still in the early stages of a recession," said Smith. Putting pressure on both financials and the Dow was credit card company American Express (AXP Quote - Cramer on AXP - Stock Picks), which fell short of estimates and offered cautious guidance for 2008. Its stock was lately down 8.8%. Fellow Dow member Merck (MRK Quote - Cramer on MRK - Stock Picks) delivered an earnings beat, but didn't offer forward projections after discouraging test results emerged for the cholesterol drug Vytorin, a joint venture between Merck and Schering-Plough (SGP Quote - Cramer on SGP - Stock Picks).
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