Updated from 4:10 p.m. ESTStocks steadied themselves after taking a tumble at the open, and by the end of trading Wednesday the major indices had finished with modest gains. The Dow Jones Industrial Average rose 25.56 points, or 0.21%, to 12,442.16, and the S&P 500 was up 2.74 points, or 0.19%, at 1414.85. The Nasdaq gained 15.50 points, or 0.63%, at 2459.33. A 4.8% rise in Apple ( AAPL), which continued to hit record highs a day after CEO Steve Jobs unveiled an all-in-one phone and iPod device, supported the Nasdaq's advance. Apple jumped $4.43 to $97. Volume remained strong, with 2.68 billion shares changing hands at the New York Stock Exchange. On the Nasdaq, nearly 2.29 billion shares traded. Losers matched winners. New York stocks have had rocky sessions all week. On Tuesday, the action in the oil market flummoxed investors, and the first corporate earnings began to appear. At the end of it all, the Dow had slipped 6.89 points, or 0.06%, to 12,416.60, and the Nasdaq had gained 5.63 points, or 0.23%, to 2443.83. During the prior day, crude plunged more than $2 a barrel at one point before recovering most of the loss. Sellers were back again, though, and the February contract dropped $1.62 to close at $54.02 a barrel. According to the Energy Department's weekly inventory report, crude stores fell by a greater-than-expected 5 million barrels last week. However, the drawdown wasn't giving prices any support, as distillate supplies climbed by 5.4 million barrels and gasoline stocks rose 3.8 million barrels. "The $55 level was broadly seen as key technical support," said Marc Pado, U.S. market strategist with Cantor Fitzgerald. "The warm-weather forecasts are certainly a part of the bearish pressure on crude, but there is more to it. Even with cold on the way, inventories are likely to stay strong through winter."
Lower oil prices have mixed effects. While good for consumers, which can help lift the overall stock market, falling crude tends to put pressure on shares of companies in the energy complex. That can lead the equities market lower. Along with crude, most other energy contracts were weaker, as were precious metals. Gold futures eased $1.60 to close at $613.40 an ounce, and silver fell 15 cents to finish at $12.44 an ounce. The Amex Oil Index lost 1.7%, and the Philadelphia Oil Service Sector Index dropped 1.3%. Meanwhile, chip stocks were again among the winners of the session, with the Philadelphia Semiconductor Sector Index adding 1.8%. The market also wrestled with comments from Chicago Federal Reserve President Michael Moskow, who provided his economic outlook at a business luncheon in Iowa. "My predominant concern remains the risks to the inflation outlook," said Moskow. "We've seen some welcome easing in inflation in the past couple of months, and I'm hopeful this development will continue. But there is still the risk that resource pressures or other factors, such as elevated inflation expectations, could prevent actual inflation from falling in a timely fashion." On the corporate side, US Airways ( LCC) raised its bid for bankrupt airline Delta ( DALRQ) to $10.6 billion from around $8 billion. Delta has thus far said it wants to remain independent, but US Air has repeatedly indicated it planned to continue pursuing the offer. Delta rose 10 cents, or 7.7%, to $1.40. US Airways finished higher by $1.03, or 1.8%, to $58.93. Elsewhere, Chevron ( CVX) said fourth-quarter earnings would be hurt by lower commodity prices and reduced downstream margins. Chevron gave back $1.22, or 1.7%, to $69.41. Staying with earnings, Alcoa ( AA) reported after the previous close, saying its profits and revenue for the fourth quarter topped analysts' estimates. Alcoa jumped $1.71, or 6%, to $30.23 and was the Dow's best performer. Genentech ( DNA) slipped 95 cents, or 1.1%, to close at $83.74 ahead of its quarterly results.
Shares of Guitar Center ( GTRC) slid 1.6% after the retailer said fourth-quarter income will miss its previously projected range of $1.14 to $1.20 a share. The Thomson First Call analysts' consensus is for earnings of $1.16 a share. Guitar Center blamed the shortfall on weaker-than-expected sales. The stock ended down 67 cents to $42.58. Sears Holdings ( SHLD) said it expects to make $4.87 to $5.39 a share for the fourth quarter ending this month, up from $4.03 a year ago. Analysts were looking for $4.86. Shares gained $5.86, or 3.5%, to $172.09. Away from equities, the Commerce Department said the U.S. trade deficit narrowed to $58.2 billion in November, the lowest level since July 2005, from $58.9 billion in October. Economists expected the deficit to widen to $59.8 billion. Treasuries eased following the data. The 10-year fell by 5/32, yielding 4.68%. The 30-year bond slipped 15/32 to lift the yield to 4.77%. The dollar was rallying against other major currencies. Overnight in Asia, Japan's Nikkei fell 1.7% to 16,942, and Hong Kong's Hang Seng sank 1.7% to 19,568. In Europe, London's FTSE 100 slid 0.6% to 6161. Germany's Xetra DAX was off 0.7% to 6566.