Stocks Edge Off Early Gains
07/23/08 - 12:23 PM EDT
Mike Taylor
Updated from 11:07 a.m. EDT
The U.S. stock market was fighting to stay positive Wednesday as investors, neck-deep in earnings statements, mulled over the prospect of government aid for the mortgage industry and a continuing decline in oil prices. The Dow Jones Industrial Average was down 16 points at 11,586, and the S&P 500 was tacking on 2.5 points to 1,279. The Nasdaq was up 5.5 points at 2309. On Tuesday, the three major indices ramped up in the final hour of trading to close near their highs. Shortly thereafter, Internet portal Yahoo! (YHOO Quote - Cramer on YHOO - Stock Picks) announced lackluster second-quarter earnings and tepid guidance, but the stock was up 2.8%. In the financial sector, Washington Mutual (WM Quote - Cramer on WM - Stock Picks) reported a loss that was worse than analysts had feared, but also said it wouldn't need to raise additional capital. Shares were recently up less than 1%. In commodities, crude oil for September delivery was recently down $1.46 to $126.96 a barrel after losing $3 Tuesday. August gold futures were shedding $21 to $927.50 an ounce. James Paulsen, chief investment strategist for Wells Capital Management, said that ever since May, the market's been all about oil. Wall Street was speculating that record-high oil prices would wreck the U.S. consumer and subsequently the housing market. "That has been the mindset since oil surged, and I think that is what's reversing." Paulsen said the housing bill passing through Congress today is an added bonus, but not the determining factor in today's rally. Outside of the financials, "You've got, actually, just as big if not bigger move in consumer cyclical. I don't think that's tied to the housing bill," he said. "Their crisis discounts are coming out."
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