Stocks Mixed on Earnings Caution; Apple Rebounds

NEW YORK ( TheStreet) -- Major U.S. stock averages were muddled Wednesday afternoon as investors remained cautious about the fourth-quarter earnings season following reports from JPMorgan Chase ( JPM) and Goldman Sachs ( GS). Apple ( AAPL) shares rebounded.

A decline in shares of aerospace giant Boeing ( BA) and a cut in the World Bank's global outlook also weighed on the markets.

The World Bank predicted that worldwide gross domestic product will rise 2.4% from 2.3% last year, down from its prior prediction of 3% growth for 2013, citing risks including the stalling of progress made on resolving the eurozone crisis, the battles over the U.S. budget, the possibility of a sharp slowing of investment in China, and a disruption in global oil supplies.

U.S. economic data points maintained a relatively positive tone Wednesday ahead of the Federal Reserve's beige book report.

The Dow Jones Industrial Average closed down 24 points, or 0.2%, to 13,511.

Breadth was negative, with losers edging winners 17 to 13. The heaviest decliners were Boeing, Merck ( MRK), AT&T ( T) and Verizon ( VZ).

Boeing shares sank 3.4%. Japan's two biggest airlines grounded all their Boeing 787 aircraft for safety checks Wednesday after one was forced to make an emergency landing in the latest blow for the new jet.

JPMorgan shares were down following its fourth-quarter results.

Intel ( INTC), Hewlett-Packard ( HPQ) and Bank of America ( BAC) were among the blue-chip components that moved higher.

The S&P 500 rose incrementally by 0.02% to 1,473. The Nasdaq gained 7 points, or 0.2%, to 3,118 as Apple shares rebounded 4.2% to trade above $500 again.

In the broader market, the biggest sector decliners were consumer cyclicals, basic materials, capital goods, conglomerates and utilities. The technology, transportation and consumer non-cyclical sectors were in the green.

Volumes totaled 3.15 billion on the Big Board and 1.68 billion on the Nasdaq. Decliners were outpacing advancers by a ratio of 1.2-to-1 on the New York Stock Exchange and 1.5-to-1 on the Nasdaq.

Paul Pagnato, founder of HighTower's Pagnato-Karp Group, said bank earnings have been good when looking at the bigger picture, with JPMorgan's earnings up over 50%. "They're advancing, they're going forward. I think what happens on a day like today, where you see the market retreat, it's because it's been built in," said Pagnato. "The market's been pushed up, JPMorgan's shares have been rising in anticipation of the earnings, and so it's not uncommon after a report comes out to see them trade down a little bit just because they've already had a nice run."

Ryan Detrick, senior technical strategist at Schaeffer's, said investors are still taking a wait-and-see approach. "With earnings season just heating up, traders are leery of aggressively adding to new positions with prices near multi-year highs," he said. "They need to see some positive earnings before putting cash to work."

Goldman Sachs reported better-than-expected earnings of $2.89 billion on revenue of $9.24 billion, beating adjusted estimates of $1.78 billion and $7.83 billion, respectively. Per-share profit was $5.60 a share. Shares popped 4.1%.

JPMorgan posted fourth-quarter earnings of $1.39 a share, beating the average analyst estimate of $1.16 a share, on in-line net revenue of $24.4 billion. CEO Jamie Dimon said he's been seeing an ongoing improvement in credit quality. Shares rose 1%.

Bank of New York Mellon ( BK) posted in-line fourth-quarter earnings of 53 cents a share on revenue of $3.6 billion as investment management fees rose 16% year-over-year to $801 million. Shares slid 2.8%.

The Bureau of Labor Statistics reported Wednesday an as-expected flat read for the consumer price index for December, after a 0.3% decline the prior month. The core CPI, which excludes food and energy components, rose 0.1% after ticking up 0.1% the prior month. Economists predicted the core print would rise 0.2%.

"Overall the subdued pace of inflation is continuing to create a supportive environment for the Fed to keep its monetary policy stance ultra-accommodative, allaying fears that the explosion in its balance sheet could trigger a inflation problem," said Millan Mulraine, a senior U.S. strategist at TD Securities.

The Federal Reserve said industrial production rose 0.3% in December, which was as expected, after rising by a downwardly revised 1% in November. Capacity utilization increased to 78.8% from an upwardly revised 78.7%. Economists expected capacity utilization to increase to 78.5%.

The National Association of Home Builders said its housing market index was unchanged at 47 in January; an uptick to 48 was expected. Still, Jim O'Sullivan, chief U.S. economist at High Frequency Economics, said he doubts the flat read signals an end to the uptrend.

The Fed's January Beige Book commentary on economic conditions reported modest to moderate economic growth by all its districts. It also found that holiday sales were modestly higher in 2012 than in 2011. Nonfinancial service-sector activity improved overall, real estate activity expanded or held steady in 11 of the 12 districts, while wages, prices and employment conditions printed as relatively unchanged.

Gold for February delivery settled down 70 cents to $1,683.20 an ounce at the Comex division of the New York Mercantile Exchange, while February crude oil futures closed up 96 cents at $94.24 a barrel.

The benchmark 10-year Treasury was up 6/32 to dilute the yield to 1.820%. The dollar was up 0.04%, according to the U.S. dollar index.

U.S. Bancorp ( USB) on Wednesday reported another strong quarter, but the company's loan growth was slowing. Shares were down 0.4% on Wednesday.

Comerica ( CMA ) of Dallas on Wednesday reported improving earnings, with declining restructuring expenses and solid commercial loan growth. Shares were up 3.7%.

General Motors ( GM) said Tuesday it expects only a modest increase in pretax profit this year as it rolls out multiple new cars and trucks worldwide. Shares slipped 4.2%.

Chipotle Mexican Grill ( CMG) said Tuesday it expects fourth-quarter net income of $1.92 to $1.97 a share. The restaurant company forecast revenue would rise to almost $700 million, up 17% from a year earlier. Shares fell 5.5%.

Analysts were expecting quarterly profit of $2.09 a share on revenue of $690.7 million.

Wendy's ( WEN) shares tacked on 3.7% after the quick-service hamburger company easily beat fourth-quarter expectations.

Dell ( DELL) tumbled 4.3% as buyout rumors continue to swirl around the Texan tech giant.

Genworth Financial ( GNW) shares surged 8.9% after the company announced a U.S. mortgage insurance capital plan that could reduce Genworth Mortgage Insurance Co.'s risk-to-capital by 12 to 15 points and decrease the likelihood that the U.S. mortgage insurance subsidiaries will require additional capital for the foreseeable future.

-- Written by Andrea Tse and Joe Deaux in New York.

>To contact the writer of this article, click here: Andrea Tse.

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