Wall Street snaps losing streak

By Kim Khan
CNN/Money Staff Writer

NEW YORK (CNN/Money) -- Blue-chip stocks snapped a seven-session losing streak Wednesday but the investor malaise persisted, erasing much of an early-morning rally inspired by generally good earnings reports.

The Dow Jones industrial average rose 69.37, or 0.8 percent, to 8,542.48, snapping its longest losing streak since last September. It had been up more than 250 points earlier in the day.

The Nasdaq composite index imitated the Dow's moves; it closed up 21.99, or 1.6 percent, to 1,397.25, and the Standard & Poor's 500 index rose 4.99, or 0.5 percent, to 906.04.

Barry Hyman, Chief Investment Strategist at Ehrenkrantz King Nussbaum, said there's "a big tug of war between the bulls and the bears...and the bears keep on selling on the strength."

Hyman said he expected the pattern to continue this week.

"There is a high degree of low confidence in the marketplace and nobody is looking beyond the end of their noses," Al Goldman, chief market strategist at A.G. Edwards told CNNfn's Street Sweep. "They're responding minute by minute to things."

"It is understandable why confidence is so low with what's gone on in Wall Street, but at the end of the day earnings per share will win the day," Goldman said.

Earnings OK, overall

Of the Dow components reporting, financial services and aerospace and defense companies dominated, offering generally positive pictures of corporate health.

Citigroup (C: up $0.73 to $36.93, Research, Estimates) reported earnings of 78 cents a share, up from 74 cents a year earlier and above the 77-cent consensus of analysts surveyed by First Call.

While J.P. Morgan Chase (JPM: down $0.36 to $28.14, Research, Estimates) said second-quarter earnings came in at 58 cents per share, below the 65 cents consensus, that was above the 33 cents earned in the year-earlier period.

From the aerospace sector, engine maker United Technologies (UTX: up $3.05 to $64.95, Research, Estimates) earned $1.23 per share, 3 cents above expectations and above the $1.16 earned in the prior year, while aircraft maker Boeing (BA: up $2.07 to $42.94, Research, Estimates) earned 92 cents a share, better than the 80 cents a share forecast, but worse than the 95 cents earned a year earlier.

In addition, parts maker Honeywell International (HON: down $0.90 to $31.10, Research, Estimates) posted income of 55 cents a share, unchanged from the same 2001 period.

After having made a big splash with its decision to include stock options as expenses beginning later this year, Coca-Cola (KO: down $0.37 to $50.00, Research, Estimates) reported earnings of 52 cents a share, in line with estimates and up from 45 cents a year earlier.

In addition, No. 2 U.S. automaker Ford Motor (F: up $0.02 to $12.52, Research, Estimates) posted its first quarterly profit in more than a year, earning 31 cents a share, a nickel better than expected and a reversal of the 30 cents a share loss a year earlier.

Investors shrugged off Intel (INTC: up $1.08 to $19.44, Research, Estimates)'s disappointing results, boosting the company's shares 84 cents to $19.20 in before-hours trading. Late Tuesday the No. 1 chipmaker reported second-quarter earnings of 9 cents a share, down from 12 cents a year earlier and below the 11-cent consensus forecast of analysts. In addition, Intel said it will cut 4,000 jobs over the next six months.

Greenspan, again

On Capitol Hill, Federal Reserve Chairman Alan Greenspan answered questions from the House Financial Services Committee in the second day of his semiannual Humphrey-Hawkins testimony. On Tuesday, Greenspan expressed optimism to the Senate about the future health of the U.S. economy, while acknowledging that corporate scandals were indirectly hurting business spending.

European markets soared late in the day to a higher finish. Asian-Pacific stocks finished mostly lower Wednesday, although Tokyo's Nikkei index ended with a 0.4 percent gain.

Treasury prices rose, pushing 10-year note yield to 4.66 percent. The dollar gained against the yen and edged higher against the euro.

Light crude oil futures rose 29 cents to $28.01 a barrel in New York, where gold rose 10 cents to $317.70 per ounce.

Market breadth finished positive. On the New York Stock Exchange, winners beat losers 9-to-7 as 1.91 billion shares changed hands. On the Nasdaq, advancers beat decliners nearly 4-to-3 as 2.31 billion shares traded.