Stocks closed mostly higher Wednesday, but relinquished a bulk of their early gains as momentum fizzled in the afternoon, according to Standard & Poor's MarketScope. Broad weakness in Internet shares held back the Nasdaq.
On Wednesday, the Dow Jones industrial average gained 27.56 points, or 0.26%, to 10,486.02. The broader Standard & Poor's 500 index rose 2.68 points, or 0.23%, to 1,184.07. The Nasdaq composite index fell 0.18 points, or 0.01%, to 1,999.14.
Looking ahead to Thursday, reports will be released on weekly initial jobless claims for the previous week, along with wholesale inventories and consumer credit for February.
Among the companies reporting quarterly earnings Thursday is IT services and consulting group Accenture (ACN).
In a speech to the Senate Wednesday, Federal Reserve Chairman Alan Greenspan urged lawmakers to restrict the size of mortgage giants Fannie Mae (FNM) and Freddie Mac's (FRE) assets, saying that tough regulation alone is not enough to protect the financial system from the risks the lenders pose. His comments did not include any insights into economic growth or inflation.
Oil prices ended the day down 19 cents at $55.85 a barrel, following the Energy Information Administration's release of weekly inventory data. The data revealed a 2.4 million barrel rise in crude stocks for the week ending April 1, which was close to consensus forecasts, according to Action Economics.
General Motors (GM) , which announced Wednesday that it would produce a version of the Hummer for sale outside of the U.S., led the gainers in the Dow Jones Industrial Average. Biotechs Genentech (DNA) and Biogen Idec (BIIB) were also higher after they announced that results from a Phase III rheumatoid arthritis trial of Rituxan plus methotrexate showed statistically significant improvement in the disease relative to methotrexate alone.
In corporate news, the board of MCI (MCI) late Tuesday night voted to reject an $8.9 billion buyout offer from Qwest Communications (Q), deciding instead to affirm its decision to go with an accepted $7.5 billion bid from Verizon Communications (VZ). MCI said Verizon's offer was more likely to close.
Cable operator Cablevision Systems (CVC) has made a $16.5 billion cash bid for bankrupt cable TV company Adelphia Communications Corp., according to the Wall Street Journal. The Journal said the bid comes close to the leading bidder, a venture of Time Warner (TWX) and Comcast (CMCSA), which is offering $17.5 billion in stock and cash.
In earnings news, agricultural giant Monsanto (MON) reported Wednesday that its second-quarter profit more than doubled, compared to the period in the previous year, thanks to strong sales of seeds and gene technology and fewer restructuring charges. The company earned a better-than-expected $373 million, or $1.37 per share, for the quarter, up from $154 million, or 57 cents per share in the period a year ago.
Business software maker Siebel Systems (SEBL) shares closed 9.7% lower after it warned that it would report a loss for the first quarter. In preliminary results released Wednesday, the company said it expects to lose between $7 million and $9 million, including charges related to a recent acquisition.
Research in Motion (RIMM), maker of the Blackberry email device, report lower-than-expected fourth-quarter sales Tuesday after the close. The company reported a fourth-quarter loss of $2.6 million, compared to a profit last year of $41.5 million, and said that the number of subscribers more than doubled in a year.
Aluminium producer and Dow component Alcoa (AA) reported earnings after the close Wednesday. The company announced income from continuing operations for the first quarter of 31 cents per share, vs.41 cents one year earlier, on a 13% increase in sales.
Treasury prices traded higher Wednesday, with the yield on the benchmark 10-year note falling to 4.43%. The lack of major news again kept trading limited. Traders' attention was captivated by Greenspan's strong recommendation that Fannie Mae and Freddie Mac reduce their portfolio size (by about $200 billion), and mulled the impact for the markets.
European stock markets closed higher Wednesday. London's Financial Times-Stock Exchange 100 index was up 4.50 points, or 0.09%, to 4,947.40.
Germany's DAX index rose 16.57 points, or 0.38%, to 4,379.18.
In Paris, the CAC 40 index gained 19.05 points, or 0.47%, to 4,106.99.
Asian markets finished higher on Wednesday. In Japan, the Nikkei 225 index gained 106.77 points, or 0.92%, to 11,774.31.
Hong Kong's Hang Seng gained 22.06 points, or 0.16%, to 13,513.41.