NEW YORK (Reuters) - The Dow and the Nasdaq eked out gains on Wednesday as a late-stage rally brought stocks off their lows on hopes that the quarterly earnings season would deliver good news.
Despite the rebound from steeper losses earlier in the day, a negative tone still characterized trade as investors worried whether an economic recovery would take hold.
After the market close, however, aluminum giant Alcoa Inc (AA.N) reported a smaller-than-expected loss that gave a positive tone to the start of the second-quarter earnings season. Its shares jumped 7 percent to $10.07 in extended trading.
"My own sense of it is that manufacturing companies should do a lot better in the third-quarter simply because the inventory liquidation we saw in the first half of the year was huge, it was absolutely huge," said Charles Lieberman, chief investment officer of Advisors Capital Management, LLC in Paramus, New Jersey, after Alcoa reported.
Stocks were sharply lower for most of the day as investors worried that an economic recovery will be slower than thought. Those fears helped send crude oil futures to a more than a six-week low, while copper, a barometer for global demand, hit a two-week low as commodities sold off across the board.
"The tone of the trading day definitely was to the downside," said Weston Boone, vice president of listed trading at Stifel Nicolaus Capital Markets in Baltimore.
He pointed to a deterioration in sentiment over the last few day after U.S. June payrolls data came in worse than expected at the end of last week.
Kevin Kruszenski, head of listed trading at KeyBanc Capital Markets in Cleveland, noted that a late rally may have been triggered by people "jockeying for position" ahead of Alcoa's earnings.
The Dow Jones industrial average .DJI gained 14.81 points, or 0.18 percent, to 8,178.41. The Standard & Poor's 500 Index .SPX dropped 1.47 points, or 0.17 percent, to 879.56. The Nasdaq Composite Index .IXIC added 1.00 points, or 0.06 percent, to 1,747.17. more...
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