US stocks mixed

Stocks wobbled to a mixed close today as a government report showed an improved supply outlook for oil, and the first day of earnings season forced investors to shift their focus to company news.

With first-quarter reports starting, investors were in the early stages of trying to assess what corporate earnings might reveal about the economy’s momentum. Wall Street is likely to pay particular attention to the results of industrials and financial companies as it eyes the impact rising interest rates have had over the course of 2005’s first quarter.

During this period, it’s likely “the market is not going to move dramatically one way or the other,” said Jeff Kleintop, chief investment strategist for PNC Financial Services Group in Philadelphia, noting that stocks tend to do better in the actual reporting season than during pre-announcements.

“It’s been a show-me-the-money kind of market, very reactive, waiting to see the results,” Kleintop said.

The Dow Jones industrial average was up 27.56, or 0.26%, at 10,486.02.

The broader gauges were mixed. The Standard & Poor’s 500 index added 2.68, or 0.23%, to 1,184.07. The Nasdaq composite index declined 0.18, or 0.01%, to 1,999.14.

While the quality of corporate profits is likely to emerge as the main driver in the weeks ahead, Wall Street is also eyeing oil prices. A decline in crude coupled with a firmer dollar could help stocks break out of the low end of their current trading range, said Subodh Kumar, chief investment strategist with CIBC World Markets.

“There are two kinds of risks right now. One is oil prices going ever higher, the second is the US dollar going ever lower,” said Kumar said. “So you have to look at both of these things. A firmer dollar is better for capital market risk, and oil prices pulling back may reduce some fears about earnings and consumer spending.”

Financial stocks were among the day’s best gainers as Treasuries continued their rally; the yield on the benchmark 10-year note fell to 4.43% from 4.47% late Tuesday. The US dollar was mixed against other major currencies. Gold prices rose.

Oil futures settled 19 cents lower at 55.85 on the New York Mercantile Exchange, following the government’s weekly fuel supply report, which showed a 2.4 million barrel build in crude.

The data also showed a 2.1 million barrel draw in gas inventories, however, which could cause some concern ahead of the summer driving season.

In Washington, Federal Reserve Chairman Alan Greenspan urged Congress to limit the size of the multibillion-dollar portfolios held by mortgage giants Fannie Mae and Freddie Mac, warning that stronger regulations alone would not sufficiently reduce risks for the US financial system.

Restraining their growth is essential, he warned, because if one or both of the institutions fail, the federal government would have to bail out investors.

Debate over how to regulate Fannie and Freddie intensified following accounting scandals at both companies, and legislation to tighten government oversight was introduced late Tuesday.

Fannie Mae, the leading US buyer of home mortgages, was up 1.87 at 54.15; its rival, Freddie Mac, the second-largest mortgage buyer, added 2.04 to 63.80 following Greenspan’s remarks, and as Wall Street digested the proposed legislation, which some found less onerous than feared.

Heralding the start of earnings season, Dow Jones industrials component Alcoa Inc. reported results after the market closed; the aluminium producer said first-quarter profits fell year-over-year due to restructuring charges and other items, but operating profit was in the range of Wall Street expectations.

Anheuser-Busch Cos., the biggest US brewer, slid 3.85, or 1.79, to 45.65, after lowering its profit forecast for the year and saying it would step up its marketing efforts following weaker-than-expected US sales. Legg Mason downgraded the producer of top-selling Budweiser and Bud Light to a “sell,” saying its shares were likely to trade in the low-40s in the months ahead.

Advancers outnumbered declining issues by more than 3 to 2 on the New York Stock Exchange.

The Russell 2000 index, which tracks smaller company stocks, was up 1.71, or 0.28%, at 616.21.