Lower stock prices lure buyers back to Wall Street

Associated Press

NEW YORK — Buyers returned to Wall Street Tuesday, lured by cheaper stock prices after six straight losing sessions but still anxious about impending earnings reports.

With fourth-quarter results imminent — including Intel’s, out after the close of trading — investors were wary of taking many chances. Stocks gave up solid, early gains and fluctuated sharply throughout the afternoon.

"Everyone is a little cautious here. They don’t need any surprises," said Larry Rice, chief investment officer at Josephthal &Co.

The broader market also finished higher after a day of wide fluctuations. The Nasdaq composite index rose 10.17, or 0.5 percent, to 2,000.91. The Standard &Poor’s 500 index advanced 7.78, or 0.7 percent, to 1,146.19.

Analysts have predicted choppy trading for the remainder of the month, saying individual earnings reports could move the market in either direction.

"As the market tries to digest each report, there is going to be some volatility," said Brian Belski, fundamental market strategist for US Bancorp Piper Jaffray.

Stocks are also vulnerable to profit taking as investors evaluate how far prices have risen since the lows following the Sept. 11 attacks. As of Monday, the Dow was 20 percent above its Sept. 21 low of 8,235.81. The Nasdaq was nearly 40 percent above its low, and the S&P 500 was up almost 18 percent.

"Even though the market has come down recently, it’s still on the overvalued side. … That’s what the investor has to digest," Rice said.

The technology sector was mixed ahead of Intel’s results. Intel fell 16 cents to $34.68, and competitor Advanced Micro Devices declined 46 cents to $19.15. But Microsoft rose $1.08 to $69.55.

After the market closed, Intel announced that fourth-quarter profits fell 77 percent but beat analysts’ expectations by 4 cents a share due to strong holiday sales. Intel fell 73 cents during extended trading after the chip maker projected little about future business, saying it will be able to better judge demand in four to five weeks.

In blue chip trading, financial issues were strong after Wells Fargo posted a 5 percent increase in fourth-quarter profits due to a mortgage refinancing boom that offset sluggish loan demand among its business customers. Wells Fargo soared $2.30 to $45.32, while Citigroup climbed 84 cents to $49.72, and J.P. Morgan Chase rose 56 cents to $37.87.