Updated from 4:06 p.m. EDTStocks closed mostly flat Tuesday as indecision ruled the markets before what eventually would prove a somewhat disappointing, postclose earnings release from Intel ( INTC). The Dow Jones Industrial Average gained 9.37 points, or 0.09%, to 10,247.59; the S&P 500 tacked on 0.79 points, or 0.07%, to 1115.14; while the Nasdaq Composite was down 5.26 points, or 0.27%, to 1931.66. The 10-year Treasury bond was trading down 7/32 in price to yield 4.47%, while the dollar was higher against the yen and the euro.
IBM closed up 55 cents, or 0.6%, to $85.50 after Morgan Stanley said earlier that the shares are a buying opportunity at current levels. The stock was above $91 in mid-June and has fallen along with the rest of the Nasdaq, but Morgan Stanley sees it bouncing back even if the rest of the sector doesn't. The brokerage has a $100 price target on IBM. The tech sector's main weakness could be found in software, with the Goldman Sachs Technology Industry Software Index down 1.7%. Elsewhere, the Philadelphia Semiconductor Index dropped 0.2%, and the Amex Network Index closed down 0.8%. In other corporate news, Bank of America ( BAC) agreed to buy National Processing ( NAP) for $1.4 billion in cash, creating a bank-card payment processor with nearly $250 billion in annual volume. That comes to $26.60 a share, a 9.5% discount to National Processing's closing price on Monday of $29.40. Bank of America's stock closed up 36 cents, or 0.4%, to $85.21, while National Processing added $3.15 or 10.7%, to $26.25. On the economic front, the government reported that the U.S. trade deficit was lower than expected in May, down to $46 billion from the revised $48.1 billion logged for April. Economists expected the figure to be higher, at $48.3 billion. In earnings news, Johnson & Johnson ( JNJ) said its second-quarter profits more than doubled on strong sales of its drugs for epilepsy and arthritis. Its stock closed up 49 cents, or 0.9%, to $55.38. Scandal-tarnished Commerce Bancorp ( CBH) said second-quarter earnings jumped 46% from a year ago to $66.7 million, or 79 cents a share, beating estimates by a penny. The New Jersey bank, which saw two executives of its Pennsylvania subsidiary indicted in a Philadelphia corruption probe last month, guided the rest of the year roughly in line with expectations. Its stock lost 92 cents, or 1.7%, to $54.26. Merrill Lynch ( MER) reported surprisingly flat second-quarter earnings, hurt by hits in bond and derivatives trading volume. It stock shed $1.67 cents, or 3.2%, to $49.80. Gannett ( GCI) said second-quarter earnings jumped 8.3%, meeting Wall Street's expectations. It earned $1.30 a share for the quarter, up from $1.20 a share for the same quarter last year. The stock added 99 cents, or 1.2%, to $82.38. Overseas markets closed mixed, with London's FTSE down a fraction to 4358 and Germany's Xetra DAX up 0.3% to 3904. In Asia, Japan's Nikkei rose 0.2% to 11,609, while Hong Kong's Hang Seng fell 0.9% to 12,078.
Before Wednesday's bell, earnings reports are due out from Bank of America, Genzyme ( GENZ), The New York Times ( NYT) and Harley-Davidson ( HDI). After the close, results are due from Advanced Micro ( AMD), expected to report profits before special items of 9 cents a share, up from last year's loss of 40 cents a share; and Apple Computer ( AAPL), expected to report 15 cents a share, up from last year's 5 cents. In economic data, Wednesday's tone will be set at 8:30 a.m. EDT when the government is scheduled to release the June results of the import and export price indices. In May, import prices, excluding oil, rose 0.4%, while exports, excluding agriculture, were up 0.2%. Also, the Census Bureau will release retail sales results for June, expected to decline by 0.7% after jumping 1.2% in May. Excluding auto sales, retail business is expected to be up 0.2% for the month.