NEW YORK - Stocks closed narrowly mixed yesterday after profit reports and forecasts from blue-chip names such as International Business Machines Corp. and General Electric Co. failed to impress Wall Street and sent investors searching for other catalysts to drive the markets higher.
Profit concerns have unnerved investors already made skittish by the recent tug-of-war over whether stocks will move higher in 2007 with the same resolve as in 2006. Recent weakness in technology stocks had upset Wall Street; tech stocks regained some ground a day after the Nasdaq composite index posted its biggest drop since late November but were still down for the week.
"I think we're at an extremely pivotal psychological level," said T.J. Marta, economic strategist at RBC Capital Markets. He said earnings and economic data support the Federal Reserve's notion that the economy can pull off a soft landing.
The Fed is unlikely to lower short-term interest rates if the economy continues at a steady clip or if it begins to accelerate again. The central bank has left interest rates unchanged at its last four meetings after 17 straight increases that began in 2004. Last year, investors propelled stocks sharply higher partly on the widely held view that the Fed would cut rates perhaps as early as the first half of 2007.
The Dow Jones industrial average closed down 2.40, or 0.02 percent, at 12,565.53. The Standard & Poor's 500 index rose 4.13, or 0.29 percent, to 1,430.50, and the Nasdaq was up 8.10, or 0.33 percent, at 2,451.31.
For the week, the Dow industrials rose 0.08 percent, while the S&P fell 0.02 percent, and the Nasdaq lost 2.1 percent.
Bonds fell as stocks tried to further their gains. The yield on the benchmark 10-year Treasury note rose to 4.78 percent from 4.77 percent late Thursday. The dollar was mixed against other major currencies, while gold prices rose.
Oil settled up $1.51 at $51.99 a barrel on the New York Mercantile Exchange. The increase follows sharp declines in recent sessions and could signal that investors are eager to buy oil to cover previous commitments as they head into the weekend. The move helped energy companies such as Exxon Mobil Corp., which rose $1.57, or 2.2 percent, to $73.53.
Though the mood on Wall Street might have soured somewhat in the new year, consumers appear to have remained decidedly upbeat. Consumer sentiment, as tracked by the University of Michigan's survey, showed a preliminary reading of 98.0 for January compared with 91.7 in December. It is the highest showing since January 2004.
IBM fell $3.28, or 3.3 percent, to $96.17 after the company's better-than-expected fourth-quarter profit met with little enthusiasm from investors. Part of the profit increase was due to changes to the company's tax rates. The company's forecast was near the lower end of its growth target of 10 percent to 12 percent.