FOX Business: The Power to Prosper
The Dow pared its early declines and the Nasdaq Composite turned solidly positive Tuesday morning as Wall Street attempts to shake off early concerns about Europe's sovereign debt crisis and the bulls hope for an upbeat kickoff to earnings season.
As of 11:40 a.m. ET, the Dow Jones Industrial Average fell 5.79 points, or 0.05%, to 11427.58, the Standard & Poor's 500 rose 0.92 points, or 0.08%, to 1195.81 and the Nasdaq Composite jumped 13.36 points, or 0.52%, to 2579.46. The FOX 50 added 1.71 points, or 0.20%, to 874.11.
The mixed action comes after the Dow surged 330 points on Monday -- its best performance in nearly two months -- on enthusiasm for new signs Europe is racing to get its debt debacle under control by stabilizing its banking system. Stocks opened solidly lower, but have since bounced well off session lows.
“Yesterday was such an up day and there was so much euphoria tied to Europe. I think today people are sobering a little bit,” said Nick Kalivas, vice president of financial research at MF Global.
Volume is expected to pick up on Tuesday as normal business resumes after Columbus Day, which caused U.S. bond markets to close.
Without any major economic indicators to use for direction, the markets continued to take their cues from Europe, which is still grappling with its debt crisis.
Traders backed a bit away from risky assets as Slovakia's Parliament may reject on Tuesday the euro zone plan to bolster the bailout fund to 440 euros ($600.34 billion). Slovakia is the last of the 17 nations that needs to approve the measure, which is seen as central to easing the crisis. However, the legislature can take the matter up again, likely under a different ruling government.
Policy makers must also decide how big of a haircut banks must take on their holdings of toxic Greek debt. According to Dow Jones Newswires, haircuts, or writedowns, of 40% to 60% are being mulled, well higher than the 21% tentatively agreed to in July.
Meanwhile, debt inspectors in Greece said the country will most likely receive the next batch of rescue loans in early November, relieving some who feared Athens would default if the money was withheld.
With that backdrop in mind, European markets gave back some of their Monday gains and the euro declined 0.27% against the U.S. dollar. Greek banking stocks plunged more than 13% on the haircut and recapitalization concerns.
Wall Street is allowing at least some of its attention to shift back to the U.S. as earnings season is set to kick off after the closing bell when aluminum maker Alcoa (NYSE:AA) is scheduled to release results. The Dow member, which is traditionally the first company to report, is expected to earn 22 cents a share on revenue just north of $6 billion.
Analysts have been trimming their forecasts for earnings as concerns of a double-dip recession increased last month. S&P 500 companies are expected to grow quarterly profits by 12.6% year-over-year, down from 17% on July 1, according to Thomson Reuters. Results from JPMorgan Chase (NYSE:JPM) and Google (NASDAQ:GOOG) are likely to make waves on Thursday.
Tech stocks helped push the Nasdaq Composite modestly higher. Apple (NASDAQ:AAPL) extended Monday's gains, rallying almost 3%. BlackBerry maker Research in Motion (NASDAQ:RIMM) jumped nearly 4% as pressure from institutional shareholders to consider its strategic alternatives (such as a sale) continues to mount.
About half of the Dow's 30 stocks were stuck in the red, led by defensive plays Pfizer (NYSE:PEF) and AT&T (NYSE:T). The benchmark index's biggest percentage winners were Alcoa and McDonald's (NYSE:MCD).
In the commodities complex, crude oil fell 35 cents a barrel, or 0.41%, to $85.24. Gold slid $5.10 a troy ounce, or 0.32%, to $1,665.70. Economically-sensitive copper tumbled 2.61% a pound to $3.2800.
Dollar Thrifty (NYSE:DTG) abandoned its long-standing plans to sell itself after the car rental service failed to come to terms with rivals Avis (NYSE:CAR) or Hertz (NYSE:HTZ).
99 Cents Only Stores (NYSE:NDN) inked a $1.6 billion deal to be acquired by Ares Management and Canada Pension Plan Investment board, trumping a rejected $1.3 billion bid from Leonard Green in March. The offer represents a 32% premium to 99 Cents' closing price the day before the Leonard offer was made public.
London's FTSE 100 declined 0.81% to 5355.10, Germany's DAX slid 0.80% to 5800.79 and France's CAC 40 lost 0.77% to 3137.15.
In Asia, the Japanese Nikkei 225 rallied 1.95% and Hong Kong's Hang Seng leaped 2.43% to 18141.60.