Encouraged by a sharp drop in oil prices, Wall Street rebounded from its lows Tuesday and closed with just a narrow loss. The market drew support from upbeat earnings news from Johnson & Johnson and Merrill Lynch.
Initially, Wall Street's worries over oil grew as the International Energy Agency raised its forecast for world demand, and as price speculation increased after the Russian government ordered the sale of part of Yukos, that nation's top producer, to pay back taxes. While that pushed oil prices to a new intraday high of $54.45 in early trading, prices later fell sharply in what analysts suggested was an overdue correction in prices. A barrel of light crude settled at $52.51, down $1.13, on the New York Mercantile Exchange.
"I think this market is keyed in on oil and is ready to go if oil drops," said Bill Groenveld, head trader for vFinance Investments.
The Dow Jones industrial average fell 4.79, or 0.05 percent, to 10,077.18. The Dow had been down more than 64 points earlier in the session. The Standard & Poor's 500-stock index dropped 2.55, or 0.2 percent, to 1121.84. The Nasdaq composite index declined 3.59, or 0.2 percent, to 1925.17.
Intel's earnings could provide some spark for the markets if oil prices can continue to fall. Intel shares slumped 33 cents, to $20.28, during regular trading, after which it announced third-quarter earnings that beat Wall Street estimates by 3 cents per share. The stock surged 72 cents, or 3.5 percent, to $21.00, in after-hours trading following the announcement.
Johnson & Johnson gained $1.46, to $56.82, after beating both revenue and earnings estimates for the third quarter. Profit rose 13 percent from a year ago.
A rough quarter for the markets hurt Merrill Lynch's earnings, as revenue fell 3 percent and profit dropped 8 percent for the third quarter. The company blamed unusually light trading on Wall Street for lower revenue, which missed analysts' forecasts, though the brokerage managed to surpass Wall Street earnings expectations by a penny per share and gave a brighter outlook for the fourth quarter. Merrill Lynch rose $1.48, to $52.48.
According to media reports, General Motors will cut 12,000 jobs in Europe, one in six of its European workers, as part of a broad restructuring of its operations there. General Motors rose 38 cents, to $41.80.
* The New York Stock Exchange composite index fell 33.46, to 6609.71; the American Stock Exchange index fell 7.77, to 1276.96; and the Russell 2000 index of smaller-company stocks fell 0.85, to 576.71.
* Declining issues outnumbered advancing ones by 9 to 8 on the NYSE, where trading volume rose to 1.32 billion shares, from 944 million on Monday. On the Nasdaq Stock Market, decliners outnumbered advancers by 4 to 3 and volume totaled 1.48 billion, up from 1.16 billion.
* The price of the Treasury's 10-year note rose $2.50 per $1,000 invested, and its yield fell to 4.10 percent, from 4.13 percent on Friday.
* The dollar rose against the Japanese yen and the euro. In late New York trading, a dollar bought 109.79 yen, up from 109.35 late Monday, and a euro bought $1.2305, down from $1.2379.
* Gold for current delivery fell to $415.10 a troy ounce, from $422.00 on Monday, on the New York Mercantile Exchange's Commodity Exchange.