Wall Street closed with a mixed picture on Tuesday as very light volume and a series of conflicting economic reports canceled each other out and prevented the stock market from staging a rebound. 

Today's Market

The Dow Jones Industrial Average rose 26.62 points, or 0.23% to 11412.87, the Standard & Poor’s 500 added 4.67 points, or 0.37%, to 1271.51 and the Nasdaq Composite lost 3.62 points, or 0.15%, to 2361.97. The FOX 50 rose 1.70 points, or 0.19%, to  909.25.

On top of a batch of mixed economic reports, the stock market was under pressure on Tuesday from a $1 rise in crude oil prices and news that government regulators increased their list of "troubled" banks last quarter to 117. 

Volume was extremely low for the second day in a row as barely 850 million shares exchanged hands on the New York Stock Exchange ahead of the holiday weekend. A typical day sees some 1.3 billion in trading volume. The light volume made it difficult for the bulls to stage a rebound from Monday's 240-point dive on the Dow.

Insurer AIG (AIG) bounced back with a 4% jump on Tuesday, leading the way up on the Dow and erasing losses from a day ago. Home Depot (HD) and ExxonMobil (XOM) also rose nearly 2% a piece. On the other hand, Pfizer (PFE) and Microsoft (MSFT) led the decliners on the Dow. 

The Nasdaq Composite didn't fare as well as the broader indexes, closing the day slightly lower. Tech companies like Marvell Technologies (MRVL) and Broadcom (BRCM) posted the worst losses on the Nasdaq 100 on the day. Tech giants like Google (GOOG) and Amazon.com (AMZN) also fell modestly. 

Boosted by the threat of Hurrican Gustav, crude oil prices rose as high as $118 a barrel before closing at $116.27 a barrel, up $1.16 on the day. The possibility that Gustav will hurt oil production in the Gulf of Mexico helped outweigh a solid rally for the dollar, which ordinarily might have forced oil prices to negative territory. 

Meanwhile, the Federal Deposit Insurance Corp. said Tuesday afternoon its list of banks that are considered to be in trouble grew from 90 in the first quarter to 117 last quarter -- the largest list of troubled banks since mid-2003. The FDIC report comes just days after the nation's ninth banking failure of the year. 

Wall Street took the Federal Reserve's latest meeting minutes in stride even after they showed the central bank decided to downgrade its economic forecast for 2008 and 2009. Fed officials believe the slower growth will help ease rising inflation. 

The Fed also signaled in the documents that its next move in interest rates will likely be an increase, though it's not clear when that will happen. During the August 5 Fed meeting, the central bank kept interest rates steady at 2% for the second-consecutive meeting as the Fed tried to balance worries about higher prices with the nation's weakened economy. 

Data Dump

The day's economic reports provided a reminder of that weakened economy, highlighted by a trio of reports on the housing slump. 

The government reported that new home sales rose by 2.4% in July but missed consensus forecasts. Sales of new homes increased to a seasonally adjusted annual rate of 515,000 units but were downwardly revised in June to a pace of 503,000 -- the worst reading since September 1991. The sales pace comes as the government said new-home prices tumbled 4.1% in July to $294,600. 

Also, the Standard & Poor's/Case-Shiller Home Price Index dove by 15.4% last quarter from a year ago -- the largest one-quarter decline in the index's history. A third report, via the Office of Federal Housing Enterprise Oversight, showed home prices declined by 1.4% in the second quarter, a more modest decrease than the 1.7% fall from the first quarter. 

On the upside, the Conference Board, a private research group, said consumer confidence improved significantly in August to a 56.9 reading from 51.9 the month before as gasoline prices declined from record highs. Economists had been expecting a reading of 53 for the month, according to Thomson Reuters estimates.  

Corporate Movers

Darden Restaurants (DRI), which owns chains like Olive Garden and Red Lobster, saw its shares tank after it warned that its fiscal first-quarter earnings will widely miss estimates. The company now expects a profit of 60 cents to 62 cents for the quarter. Analysts had been calling for a profit of 75 cents per share. Looking ahead, Darden sees 2009 earnings in a range of down 2% to up 3% on a 52-week basis. Previously it expected 7% to 8% earnings growth. 

Electronic Arts (ERTS) and Take-Two Electronics (TTWO), the two video game publishers that have flirted with the idea of merging, entered into confidential talks on a potential deal. The move comes after EA, which makes the long-running “Madden” series, dropped its hostile takeover attempt of the maker of “Grand Theft Auto.” EA said it won’t make any further announcements on the deal until the talks have ended or a transaction is inked. Take-Two previously rejected EA’s offers of as much as $25.74 a share as being too low.

Rio Tinto (RTP), the Aussie mining titan, beat the Street with a first-half profit of $6.91 billion -- more than double what it made a year ago as metal prices have soared. The company’s underlying profit was $5.47 billion, up 55% from a year ago and above the average estimate of $5.2 billion, according to Dow Jones Newswires surveys.

JPMorgan Chase (JPM) warned it may need to take writedowns tied to its holdings of preferred stock in mortgage giants Fannie Mae (FNM) and Freddie Mac (FRE). JPMorgan said its investments have plunged in half to $600 million during the current quarter, potentially impacting the company's earnings. Shares of Fannie and Freddie have plummeted nearly 95% over the past year as the credit markets have frozen and housing debacle continues. 

Corinthian Colleges (COCO) closed almost 20% in the red after reporting a better-than-expected fiscal fourth-quarter adjusted-profit of 11 cents per share. However, the company’s revenue of $274 million missed consensus estimates of $276.6 million. Looking ahead, Corinthian sees first-quarter earnings of 6 cents to 8 cents, in-line with analyst estimates.

Hewlett-Packard (HPQ) completed its $13.9 billion acquisition of tech services company Electronic Data Systems on Tuesday. It’s the largest buy for HP since it acquired Compaq in 2002 and thought to be the biggest ever in IT. EDS shareholders signed off on the deal last month after it was announced in May. EDS CEO Ron Rittenmeyer will continue to run the business.

Delta (DAL) tapped a $1 billion credit facility ahead of its planned merger with Northwest (NWA). The airline said it had $3.7 billion in cash at the end of last month and will have more than enough money for the closing costs associated with the deal.

New York Times Company (NYT) said its July advertising revenue fell 16.2% from a year ago, while July total revenue from continuing operations fell 10.1% from a year ago. The owner of the namesake newspaper and the Boston Globe also said circulation revenue tumbled by 0.5%. 

World Markets

The Dow Jones Euro Stoxx 50 Index, an index that tracks the 50 largest companies in Europe, rose 17.01 points, or 0.52%, to a reading of 3297.42. London's FTSE 100 Index, dropped 34.90 points, or 0.63%, to 5470.70. 

On the European continent, the CAC 40 Index in Paris added 12.68 points, or 0.29%, to 4368.55 while Germany's DAX closed up 43.57, or 0.69%, to 6340.52. 

In Asia, Tokyo's Nikkei 225 benchmark index fell 99.95 points, or 0.78% to 12778.71. The Hong Kong's Hang Seng Index dropped 48.13 points, or 0.23%, to 21056.66.