NEW YORK — Investors refrained from making any big commitments on Wall Street Wednesday, leaving stocks little changed as the market tried to discern a trend in earnings and the economy.
Blue chips fluctuated amid a series of bleak profit reports and forecasts. Tech stocks fared better but struggled to stay in positive territory.
With blue chips including DuPont and McDonald’s issuing downbeat reports Wednesday, investors were taking few chances.
Analysts said it’s hard to predict how upcoming earnings announcements will affect trading each day. Wall Street’s overall mood seems optimistic, but there’s some uncertainty about whether bad earnings news has been factored completely into the cheaper prices of many stocks.
“The general tone is positive even though the market is weighing things,” said Dan Ascani, president and research director at Global Market Strategists in Gainesville, Ga. “Generally speaking, the market is digesting (earnings) well.”
What investors are most concerned about is the future. Shares of many companies that meet or beat fourth-quarter earnings expectations have slipped when those firms also warned that first-quarter results will be disappointing.
That was the case Wednesday with DuPont, which surpassed profit forecasts by a penny but said challenging business conditions will pinch earnings into the first half of this year. The chemical company fell 19 cents to close at $41.88.
McDonald’s, after warning that the first quarter will be difficult, tumbled $2.06 to $30.81. McDonald’s also missed fourth-quarter earnings forecasts by a penny.
Although investors still are trading with some caution, they seem to be growing more confident that profits and the economy will improve, partly because of lower interest rates.
The market is hopeful that the Federal Reserve will reduce rates for the second time in a month when it meets next week.
— The Associated Press
“An edge of optimism has come into the market,” said A.C. Moore, chief investment strategist at Dunvegan Associates in Santa Barbara. “There’s the thought that the economy may have a soft landing as a consequence of the Fed’s action.”
There’s evidence of the market’s increasing optimism in its recent preference for tech stocks over so-called defensive issues, such as drug stocks, that tend to perform better in bearish markets.
Drug maker Bristol-Myers Squibb fell $1.38 to $64.88, despite beating earnings forecasts by a penny. Analysts say the drug sector has become overpriced as investors sought safer bets during last year’s high-tech tumble.
Trading in the tech sector was mixed Wednesday.
Texas Instruments, which on Tuesday issued a disappointing earning report and first-quarter outlook, fell $1.50 to $43.50. But Dell, which warned of weaker profits on Monday, climbed 75 cents to $27.13.
Advancing issues nearly matched decliners on the New York Stock Exchange where consolidated volume was 1.57 billion shares, compared with 1.48 billion on Tuesday.
The Russell 2000 index advanced slightly, up 0.19 at 502.25.
Overseas, stock markets were mixed. Japan’s Nikkei stock average fell 0.7 percent, and Germany’s DAX index slipped 0.2 percent. Britain’s FT-SE 100 rose 0.8 percent, and France’s CAC-40 advanced 1.0 percent.