Stocks End With Small Gains

The averages were up and down all day as the latest earnings deluge was processed.
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Updated from 4:08 p.m. EDT

Stocks settled with moderate gains Wednesday after dipping in and out of negative territory all session, as a mixed bag of earnings news and word of more accounting issues at

AOL Time Warner

(AOL)

kept investors off balance.

The

Dow Jones Industrial Average

finished up 35.7 points, or 0.4%, at 9194, while the

Nasdaq

closed higher by 13 points, or 0.8%, at 1719. The

S&P 500

ended down 0.3 points, or 0.04%, at 989. The averages closed above their lows of the session but below their highest levels.

The 10-year Treasury note closed higher, with its yield falling to 4.1%.

Trading was choppy, with volume thin on both the

New York Stock Exchange

and Nasdaq. At midafternoon, shots were fired inside New York City Hall. Reports said City Councilman James Davis and another person were killed. Mayor Bloomberg wasn't harmed, and said in a statement that the shooting wasn't a terrorist act.

In earnings news, AOL Time Warner traded lower despite solid second-quarter earnings. The company said profit rose thanks to a couple of big gains, and it beat estimates on an operating basis. Revenue rose 6%. Investors, however, were focusing on news that the government recently determined that AOL wrongly allocated some of the $400 million it received in selling AOL Europe to

Bertelsmann

. Traders also were concentrating on forecasts for a decline in revenue from America Online this year. Shares closed down $1.17, or 7%, to $15.68.

"We are having a classic bull earnings season," said Peter Blatchford, a trader at Miller Tabak. "Companies which revised guidance downward are beating estimates by a penny and giving in-line guidance. But once you take a closer look at the earnings and forecasts, reality sets in."

Other stocks were pushed down as well, as investors scrutinized their earnings results.

"We have a market that is functioning like a balloon in a gale," said Jim Melcher, a strategist at Balestra Capital. "You are getting a lot of crosscurrents, as people react to whatever news they want."

Experts were reluctant to call a trend based on Wednesday's session, however. "Plus or minus 35 points is materially insignificant to the overall direction of the market," said Michael Driscoll, a trader at Bear Stearns. "With volume so quiet, it is tough to draw too many conclusions."

Plane manufacturer

Boeing

(BA) - Get Report

closed up 13 cents, or 0.4%, to $32.70, even after it reported a second-quarter loss and cut earnings and revenue forecasts for next year. The company lost $192 million, or 24 cents a share, vs. a profit of $779 million, or 96 cents a share, in the year-ago period. Boeing recorded $1.1 billion in charges for its satellite unit.

Sun Microsystems

(SUNW) - Get Report

reported an 80% drop in its earnings for the quarter and missed Wall Street estimates. Shares closed off 92 cents, or 19%, to $3.85.

In positive news, investors cheered earnings from

Amazon.com

(AMZN) - Get Report

and

Amgen

(AMGN) - Get Report

.

Amazon narrowed its second-quarter loss and beat forecasts, and also raised its revenue outlook for the year. Analysts at J.P. Morgan and CSFB upgraded the stock. Shares rose $5.24, or 15%, to $40.11. Meanwhile, Amgen late Tuesday posted a jump in earnings with the help of cancer and arthritis drug sales. It also boosted its profit outlook for 2003. The biotech's shares rose 79 cents, or 1%, to $69.72.

Software maker

Siebel Systems

(SEBL)

reported after the bell Tuesday a drop in quarterly earnings amid strong competition and weak corporate demand. It also announced it is cutting 9% of its workforce. The stock closed off 8 cents, or 0.9%, to $9.14.

Among pharmaceutical stocks,

Wyeth

(WYE)

earned $864 million, or 65 cents a share, in the second quarter, compared to $600 million, or 45 cents a share, in the year-ago period. The increase came as a result of the sale of several product lines and lower interest rates. Shares ended down 33 cents, or 0.7%, to $47.90.

Kodak

(EK)

closed up $2.40, or 10%, to $26.99 after the film manufacturer said earnings fell 60% to $112 million, or 39 cents a share, from $284 million, or 97 cents a share, a year earlier. The company also set plans to cut 4,500 to 6,000 jobs, or between 6% and 9% of its workforce.

Charles Schwab

(SCH)

lost 34 cents, or 3%, to $10.96 after it reported solid earnings but said it was "cautious" about the sustainability of its results. The broker earned $126 million, or 9 cents a share, compared to $98 million, or 7 cents a share, a year earlier.

BellSouth

(BLS)

said it earned $951 million, or 51 cents a share, compared to $263 million, or 14 cents a share, a year ago. The second quarter of 2002 includes charges of 38 cents a share. Revenue fell to $5.64 billion from $5.78 million. The stock ended down 41 cents, or 2%, to $25.24.

Schering-Plough

(SGP)

closed up 78 cents, or 5%, to $17.75, despite reporting a sharp drop in quarterly earnings. Net income fell to $182 million, or 12 cents a share, from $633 million, or 43 cents a share, a year earlier. The company said the second half of the year would continue to be difficult, as generic drugs put pressure on some of its brand-name products.

Shares of

P.F. Chang's China Bistro

(PFCB)

rose 29 cents, or 0.6%, to $46.88 even after the restaurant chain said 2004 earnings could come in below analysts' expectations. For the second quarter, the company said earnings were $7.08 million, or 27 cents a share, compared to $4.87 million, or 19 cents a share, in the year-ago period.

Dial

(DL) - Get Report

fell 27 cents, or 1.4%, to $19.04 after it reported a 6% rise in second-quarter profit and increased its earnings and sales outlook for the year.

In research action, chipmaker

Micron

(MU) - Get Report

was upgraded at Soundview to outperform from neutral on higher expected prices for its products and potential profitability in the current quarter. Micron shares ended up $1.08, or 7.6%, to $15.38.

Overseas markets were mixed, with London's FTSE 100 up to 4089 and Germany's Xetra DAX down to 3287. In Asia, Japan's Nikkei rose 1.4% to 9615, while Hong Kong's Hang Seng fell 1.1% to 9900.

Crude oil for future delivery was higher in London, and the dollar was weaker against the yen and euro.

On Tuesday, the Dow gained 62 points to 9158, while the Nasdaq rose 25 points to 1706. The S&P 500 climbed 9 points to 988. The gains came as two of Saddam Hussein's sons were killed in a raid in northern Iraq.