Blue chips eked out a gain and technology stocks dipped today as investors waded through anemic earnings reports from companies like software maker Siebel Systems and fresh hints of an improving economy.
"People are very perplexed," said Mr Philip Dow, director of equity strategy at RBC Dain Rauscher. "I think there are some stocks, based on their businesses, that trade at reasonable prices. I think people have lost sight of the positive side of things, it's as if as they expect bad things to happen."
Investors are wary during one the busiest periods of the second-quarter earnings season. Siebel, the world's No. 1 seller of sales and customer service software, sank more than 17 per cent in heavy trading after posting a steep drop in quarterly profits.
The market got a brief lift from a government report that showed the number of initial jobless claims fell to their lowest level in about 17 months. Fresh claims have been drifting lower for the last two months as the pace of layoffs stabilises in the slowly improving economy.
The blue-chip Dow Jones industrial average added 5 points, or 0.06 per cent, at 8,548. The broader Standard & Poor's 500 Index .SPX lost 6 points, or 0.73 per cent, to 899. The technology-laced Nasdaq Composite Index .IXIC fell 14 points, or 1.02 per cent, to 1,382.
Siebel sank $2.05 to $9.69 and ranked among the most heavily traded shares on the Nasdaq. The company posted second-quarter profits that fell a larger-than-expected 61 percent from last year, and it gave a forecast of lower results for the second half.
America Online fell 81 cents to $12.30. The Washington Postreported the media giant boosted its revenue figures through unconventional deals from 2000 to 2002, before and after its acquisition of Time Warner Inc.
Health products maker Baxter International topped the New York Stock Exchange's most active list with a $10.41 plunge to $33. The company said second-quarter profit fell 21 per cent, reduced by special charges to account for acquired research and development and a decline in the value of stakes it holds in other companies.
IBM perked $1.46 to $72.15, wiping out earlier losses. IBM eked out a quarterly net profit as the world's largest computer maker took a $1.4 billion charge to exit weak businesses and cut jobs. But even without the charge, earnings at the Dow member fell as companies cut back on technology spending.