- The Washington Times - Friday, April 18, 2008

NEW YORK (AP) — Wall Street finished an erratic session mixed yesterday after an uneven batch of earnings reports made investors cautious about buying stocks. Disappointing economic readings added to the market’s uneasiness a day after a big rally.

The market grew jittery after the Philadelphia Federal Reserve said regional manufacturing weakened further this month. The index of manufacturing activity fell to a negative 24.9 from a negative 17.4 in March. The survey found most manufacturing executives were “cautiously optimistic” about future activity, but a report of higher unemployment claims reinforced the market’s recession worries.

Merrill Lynch & Co. reported a first-quarter loss of $2.14 billion, a shortfall that was wider than estimates.

The report followed a larger-than-anticipated rise in IBM’s earnings, but there were also disappointing results from Nokia, the mobile phone company, and drug maker Pfizer.

Dan Laufenberg, chief economist for Ameriprise Financial, said the market remains cautious, though less so than in recent weeks and months.

“The market is going to go up and down. When you have nice moves like you had (Wednesday) and you hold onto most of that gain I think that tends to be a more positive signal,” he said.

The Dow Jones Industrial Average was little changed, edging up 1.22, or 0.01 percent, to 12,620.49, after fluctuating throughout the session. The Standard & Poor’s 500 Index advanced 0.85, or 0.06 percent, to 1,365.56, while the Nasdaq Composite Index fell 8.28, or 0.35 percent, to 2,341.83. The Russell 2000 index of smaller companies fell 5.39, or 0.76 percent, to 708.00.

Nokia said its profit rose 25 percent. It also said its global market share is down slightly. Its U.S. shares fell $4.74, or 14 percent, to $28.95.

Pfizer declined 70 cents, or 3.3 percent, to $20.40 following the company’s report that its first-quarter profit fell 18 percent following competition from generics and falling sales of drugs including Lipitor, Norvasc and Zyrtec.

Meanwhile, Harley-Davidson fell 70 cents, or 2 percent, to $36.09 after it said its profit declined, that it was cutting hundreds of jobs and that it would ship up to 27,000 fewer motorcycles this year.

Merrill rose $1.82, or 4.1 percent, to $46.71. Alec Young, an equities strategist for Standard & Poor’s, said the fact that Merrill was up, along with most other financial stocks, was a positive sign, because the market appears to have priced in the economic downturn and the fact that first-quarter earnings aren’t going to be strong across the board.

“It just gives a feeling that over all, while the news flow isn’t that great, the market has really factored a lot of that in,” Mr. Young said. “A little bit of red is fairly normal after a day like (Wednesday).”

UBS equities strategist David Bianco agreed. “Considering the nervousness out there about the economy, after a surge, not giving back a chunk of it is pretty encouraging,” he said.

IBM was among the bright spots, boasting a higher-than-expected 26 percent jump in profits. IBM rose $2.61, or 2.2 percent, to $123.08 and was among the biggest gainers of the 30 Dow stocks.

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