Wall Street Searches for Direction

Updated from 12:39 p.m. EST

After an early day rise, stocks in New York reversed to trade narrowly mixed Friday afternoon as investors weighed fourth-quarter earnings reports and some big changes in the banking sector.

The Dow Jones Industrial Average was falling 6 points at 8206, and the S&P 500 was lower by 2 points at 841. The Nasdaq was flat at 1511.

The financial sector's multibillion-dollar losses and skepticism about its inability to function without more government help again pushed stocks lower, with Bank of America (BAC) and JPMorgan (JPM) at the forefront of declines on Friday.

Of the news in financials, Citigroup (C) reported a fourth-quarter loss of $8.29 billion early Friday and said it will split its operations in two, separating its traditional banking business from its riskier assets. The disassembly follows a deal earlier in the week to combine its brokerage business with Morgan Stanley (MS).

Meanwhile, Bank of America sprung early results on investors. The bank lost $2.39 billion, or 48 cents a share, in the fourth quarter. The behemoth bank, which has struggled to swallow the acquisitions of Merrill Lynch and Countrywide, will now receive an additional $20 billion in support from the government. In a similar fashion to the deal the government struck with Citi last fall, the bank will guarantee to cover up to $118 billion in losses on loans and securities backed by residential and commercial real estate.

Also Friday, Switzerland's UBS (UBS) said it is selling parts of its commodities business to Barclays (BCS) for a yet-to-be-determined sum.