Wall Street drifted to a mixed close on Tuesday as the Nasdaq Composite ended with slight gains but earnings jitters sent the Dow to its fifth consecutive losing session. 

Today's Markets

The Dow Jones Industrial Average lost 25.41 points, or 0.30%, to 8448.56, the S&P 500 added 1.52 points, or 0.17%, to 871.78 and the Nasdaq Composite picked up 7.67 points, or 0.50%, to 1546.46. The consumer-friendly FOX 50 dropped 1.28 points, or 0.19%, to 660.38.

Aside from fears of uglier earnings than Wall Street has been bracing for, the markets were shoved in one direction or the other on Tuesday by reports of the breakup of Citigroup (C), rare gains for crude oil prices and Federal Reserve Chairman Ben Bernanke's endorsement of the proposed Obama stimulus plan.

While the Dow ended its streak of three straight triple-digit selloffs, the index has now closed in the red in six of 2009's eight trading days, including the last five in a row. The benchmark index is still up about 900 points from its recent lows set in November but closed on Tuesday at the lowest level since Christmas Eve. 

Roughly half of the Dow's 30 components ended in the red, led by General Electric (GE), Bank of America (BAC) and aluminum maker Alcoa (AA). On the other hand, JPMorgan Chase (JPM) and Citi posted the index's largest percentage gains. 

The Nasdaq Composite eeked out modest gains on Tuesday but closed well off the highest levels of the day as the tech sector reacted to chip maker Nvida's (NVDA) revenue warning. Tech stocks failed to rally around reports that Yahoo! (YHOO) has settled on Carol Bartz as its new CEO. 

Earnings fears were bolstered late Monday when Alcoa kicked off earnings season by reporting its first quarterly loss in six years. The weaker-than-expected report sent the company's shares sliding and reinforced profit concerns about other companies.  

Energy stocks were the biggest winners on Tuesday as names like Hess (HES) and Valero (VLO) benefited from the end to crude oil's five-day losing streak. Lifted by rumors of more production cuts, the price of a barrel of crude gained 19 cents to settle at $37.78. The mini rally does little to counter the 23% plunge the commodity has seen over the past week. 

Citi, Financials in Focus

New details emerged on Tuesday about the dismantling of Citigroup, the embattled financial giant that needed a rescue from the government last year to avoid a collapse. Citi is expected to formally announce a deal to spin off prized brokerage Smith Barney in a joint venture with Morgan Stanley (MS). Citi's shares, which fell almost 20% a day ago, erased early losses to end higher on Tuesday.

At the same time, Citi is preparing to abandon its "universal bank" model by narrowing its overall mission to focus on wholesale banking for large corporate clients and retail banking for customers, The Wall Street Journal reported. The expected reorganization, which could be announced along with quarterly results on Jan. 22., would significantly shrink the size of the financial conglomerate, the newspaper reported.

Financial jitters weren’t eased by a bearish research note from JPMorgan Chase, which predicted banking results from the fourth quarter of 2008 and the current year will be hurt significantly by sharply higher credit costs. JPMorgan lowered its outlook on a number of banks and now sees quarterly losses for Bank of America (BAC) and Citi.

Bernanke Weighs in on Stimulus 

Meanwhile, Bernanke made his first comments about President-elect Barack Obama’s stimulus package on Tuesday, saying in a speech in London that the plans could give the tumultuous U.S. economy a “significant boost” but that other steps must be taken to fix the shaky financial system.

"In my view, however, fiscal actions are unlikely to promote a lasting recovery unless they are accompanied by strong measures to further stabilize and strengthen the financial system," he said. "History demonstrates conclusively that a modern economy cannot grow if its financial system is not operating effectively."

Corporate Movers

Yahoo! (YHOO) is poised to end its two-month search for a replacement for Jerry Yang by naming Carol Bartz as its new CEO, The Wall Street Journal reported. Bartz, 60, ran software company Autodesk from 1992 until 2006.

Sony (SNE) may report an operating loss of $1.1 billion due to the recession and stronger yen, Japanese newspaper The Nikkei reported. Sony refused to comment on the potential operating loss, which would be the Japanese electronic maker's first in 14 years.

General Electric (GE) saw its shares fall sharply after a Barclays analyst warned the company’s profits may depend more heavily on tax benefits than many expect. The results, which are slated for release next week, could force Moody’s to lower its credit outlook on GE to “negative,” Barclays warned.

Barclays (BCS) plans to cut 2,100 jobs in its investment and management units, the Associated Press reported.

Pfizer (PFE) plans to lay off up to 800 researchers as the drug maker scales back its $7.5 billion research-and-development budget. The cuts represent 5% to 8% of the company's global research workforce and will be in addition to about 10,000 company-wide job cuts since early 2007. 

Borders (BGP) ended sharply higher after the No. 2 U.S. book chain operator said Richard “Mick” McGuire will take over as nonexecutive champion.

Bank of America (BAC) is retaining Merrill Lynch's trademark bull logo as a symbol of the combined banks' financial advisory business called Merrill Lynch Wealth Management, the Journal reported. The move comes as nasty fights have been breaking out behind the scenes at the newly-merged financial conglomerate. 

Lexmark (LXK) warned its fourth-quarter results will miss estimates due to lower printer sales. The company sees fourth-quarter revenue declining 17%.

JPMorgan Chase (JPM) moved its fourth-quarter earnings announcement up to Thursday, six days earlier than planned. Analysts are expecting a profit of 5 cents per share for the period. 

Data Dump

The U.S. trade deficit in November plunged to the lowest level in five years thanks to the sharpest decline in oil imports on record.

World Markets 

Dragged down by losses for metal and energy companies, European markets ended in the red for the fifth consecutive session.  The Dow Jones Euro Stoxx 50 fell 1.66% to 2411.28 and London's FTSE 100 fell 0.61% to 4399.15. 

In Asia, Tokyo's Nikkei dropped 4.79% to 8413.93 overnight. The drop, while large, was partially because Japanese markets were closed on Monday for a national holiday. Hong Kong's Hang Seng fell by 2.17%, bringing the index to 13668.05 and Australia's ASX 200 fell by 0.78%.