By Jonathan Cheng
U.S. stocks bounced back after a three-day slide, though confusion over Greece's political future and the role of the European Central Bank kept a lid on the gains.
The Dow Jones Industrial Average rose 39 points, or 0.3%, to 12671 in midday trading Wednesday. The Standard & Poor's 500-stock index gained four points, or 0.3%, to 1334 while the Nasdaq Composite added five points, or 0.2%, to 2898.
Leading the advance were industrial and consumer-staple stocks. General Electric rose 3.7% to lead the Dow components, after disclosing two acquisitions and good news at its finance unit. Procter & Gamble rose 1.6% and Merck gained 1.3%.
Weighing on the market were telecommunications stocks. Verizon Communications slipped 0.3% and AT&T was off 0.2%.
The Dow is looking to bounce back after a bruising run that has seen the blue-chip index fall for nine sessions in the past 10. On Tuesday, the Dow fell 0.5% to a four-month low.
On Wednesday, European markets reversed their morning losses to push higher, though concerns about Greece's future in the euro zone escalated. The Stoxx Europe 600 finished a rocky session lower by 0.6%. It had fallen as much as 1.4% earlier in the session.
In a sign of rising anxiety among Greeks, depositors withdrew EUR700 million (about $891 million) from local banks on Monday. German Chancellor Angela Merkel tried to soothe investor fears by saying in an interview on CNBC that Germany is determined to keep Greece in the euro zone.
But confusion over reports suggesting the ECB could stop operations with some Greek banks rippled throughout the market in New York's late morning, momentarily erasing almost all of the Dow's early gains.
"We're seeing all these statements coming out of Europe, particularly with Merkel saying there's a strong commitment to keep Greece in the euro zone," said John De Clue, chief investment officer of U.S. Bank's Private Client Reserve. " What will play out now, I think, is behind-the-scenes bargaining on how to arrive at a compromise, so that the austerity can be loosened a bit and Greece can stay in the euro zone."
Even so, De Clue argued that much of the headlines coming out of Europe would keep investors from making too much of a move in either direction, until more clarity emerges on Greece's fate.
"I'd be surprised if we see a clear trend emerging in the next month or so," De Clue said. "Unfortunately, I think markets may go sideways, though it will feel like it's going sideways at 1,000 miles per hour because of the volatility."
Asian markets were sharply lower on worries about Greece. The China's Shanghai Composite slid 1.2% and Japan's Nikkei Stock Average shed 1.1%.
In U.S. economic news, home construction in April increased 2.6% from the previous month. However, the number of new housing permits, an indication of future construction, fell. Industrial production, meantime, rose in April, though a downward revision to the previous month's number tempered investor optimism.
Separately, minutes of the Federal Reserve's monetary-policy-setting committee meeting in April will be released at 2 p.m.
Crude-oil futures fell to about $93.10 a barrel, while gold futures declined to about $1,550 an ounce. The U.S. dollar slipped against the euro and edged up on the yen. Treasurys declined, pushing the yield on the benchmark 10-year note up to 1.7852%.
GE surged after the company's finance unit, GE Capital, said it would resume paying a quarterly dividend to its parent company, signaling a turnaround for the once-troubled arm of the industrial giant. Separately, GE said it would buy Australia-based mining-equipment maker Industrea for about A$700 million ($696.6 million), as well as privately held equipment maker Fairchild International, a U.S. mining supplier, for an undisclosed amount.
"This action demonstrates the strength of GE Capital and the significant actions taken to strengthen its liquidity, capital, asset quality and profitability," GE Chief Executive Jeffrey Immelt said in a release.
J.C. Penney led the S&P 500 decliners, tumbling 17% after the department-store chain reported a wider-than-expected first-quarter loss and revenue that missed estimates, and said it will discontinue its quarterly dividend of 20 cents a share.
Abercrombie & Fitch slumped 13% after the apparel retailer reported revenue that missed estimates, citing challenging sales trends in Europe, and provided a downbeat sales outlook for the year.
Target climbed 0.4% after the discount retailer reported better-than-expected earnings, and provided an outlook that was above current projections.
Home builder Lennar rose 1.2% after the strong reading on housing starts.
Deere & Co. fell 2.3% after the maker of farming equipment reported sales that came in lower than the company predicted in February, though earnings exceeded forecasts.
Arena Pharmaceuticals slid 6.1% after the biopharmaceutical company said it is planning a public offering of common stock.
OraSure Technologies surged 18% after the company said a U.S. Food and Drug Administration committee recommended approval of the company's in-home HIV test.
(END) Dow Jones Newswires 05-16-121227ET Copyright (c) 2012 Dow Jones & Company, Inc.
Asia stocks fall amid Greek political chaos - Yahoo Finance
BANGKOK (AP) -- Asian stock markets fell Wednesday, spooked by disappointing U.S. corporate earnings and fears that political turmoil in debt-crippled Greece is pushing it closer to financial disaster.
Japan's Nikkei 225 index fell 1.5 percent to hit a three-month intraday low of 9,021.20 as traders pulled away from big exporters whose fortunes are partly linked to demand from Europe.
The same went for shares in other export-driven economies such as China and South Korea. Hong Kong's Hang Seng fell 1 percent to 20,284.66 and South Korea's Kospi lost 0.9 percent to 1,950.68.
Australia's S&P/ASX 200 slipped 1.2 percent to 4,262.30 after falling prices for metals hurt mining shares. Benchmarks in mainland China, Singapore and Taiwan also fell.
Markets have been increasingly volatile since Greek voters last weekend rejected political parties that imposed the deep spending cuts required in exchange for bailout money to keep the country from bankruptcy. On Tuesday, left-wing politician Alexis Tsipras said the country was no longer bound by its promises to cut spending sharply.
But a failure to keep those promises could lead international lenders to cut off rescue funding. That would likely lead Greece to default — and to the exit door of the euro common currency.
"If Greece repudiates the agreement signed by the previous government, the most likely scenario is Greece will default," said Francis Lun, managing director of Lyncean Holdings in Hong Kong. "And then all hell will break loose, and Greece will get kicked out of the eurozone. It's like the end of the world for the eurozone."
Prices for most metals fell as the increasingly bleak outlook for the European economy renewed expectations of weak demand. Hong Kong-listed Zijin Mining Group Co., China's largest gold miner, dropped 4.1 percent. Aluminum Corp. of China plummeted 6.8 percent.
Australian mining giants also took hits. Rio Tinto Ltd. dropped 2.4 percent. Uranium miners Paladin Energy and Energy Resources of Australia tumbled 5.9 percent and 5 percent respectively.
But Panasonic Corp. jumped 2.3 percent in Tokyo after Kyodo News agency cited sources at the company as saying it expects to return to profit in the business year ending March 2013. Toyota Motor Corp., which will report annual earnings later in the day, rose 0.3 percent.
In the U.S., stock markets were sent lower by worries about Greece and sagging corporate results.
Wendy's Co. reported first quarter results that missed expectations on higher costs for ingredients like beef and lower-than-expected sales. Casino operator Wynn Resorts reported a drop in first-quarter earnings.
Meanwhile, McDonald's Corp., the world's largest hamburger chain, on Tuesday issued sales figures that missed analyst expectations.
The Dow Jones industrial average closed down 0.6 percent at 12,932.09. The Standard & Poor's 500 index fell 0.4 percent to 1,363.72. The Nasdaq composite index fell 0.4 percent, to 2,946.27.
Benchmark oil for June delivery was down 51 cents to $96.50 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 93 cents to settle at $97.01 in New York on Tuesday.
In currencies, the euro fell to $1.2971 from $1.3030 late Tuesday in New York.
The dollar fell to 79.73 yen from 79.79 yen.
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Follow Pamela Sampson on Twitter at http://twitter.com/pamelasampson
Wall Street Stocks End Lower - New York Times
German Chancellor Angela Merkel attempted to quell some fears by saying the euro zone was committed to keeping Greece in the currency union, but news that the European Central Bank had stopped providing liquidity to some Greek banks as recapitalization wasn't in place pushed markets lower.
Investors failed to be assuaged by the minutes from the Federal Reserve's most recent meeting, in which policymakers kept alive the possibility of a fresh round of monetary stimulus on downside risks to a moderately expanding economy.
Worries about Greece's political and financial future, along with political upheaval in the broader euro zone, have driven equity losses in recent weeks, sending the benchmark S.&P. index down 5.6 percent since the end of March.
By the close of trading, the Dow Jones industrial average was down 0.3 percent, the S.&P. 500 shed 0.4 perecnt and the Nasdaq composite index dropped 0.7 percent.
Industrial shares rose 0.2 percent after positive housing and industrial production data, with factory output in the United States rising in April at its fastest pace in over a year. A separate report showed a rebound in groundbreaking for homes in April, suggesting the housing market recovery was gaining.
General Electric gained 3 percent on news its finance arms won regulatory approval to resume returning some of its profit to the parent company. Such a move that could clear the way for G.E. to accelerate stock buybacks and raise its shareholder dividend.
J.C. Penney shares plunged 18 percent, its biggest one-day percentage drop since 1987, a day after the department store owner scrapped its dividend and showed its effort to remake itself as an affordable fashion-oriented retail chain took a much bigger-than-expected toll on sales in the first quarter.
In contrast, Target advanced 0.6 percent after the discount retailer raised its full-year profit view.
European stocks closed mixed, with the DAX in Germany down 0.3 percent and the CAC 40 in France up 0.3 percent.
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