Stocks gain as oil, earnings tussle

Wall Street ended a choppy session with a moderate advance Wednesday after a better-than-expected profit report from Boeing and a seesaw day in the energy markets.

Boeing, one of the 30 stocks that make up the Dow Jones industrial average, reported a 38% jump in first-quarter earnings. The airplane manufacturer’s results, along with stronger-than-anticipated forecasts at chip makers Broadcom and Anadigics, appeared to buoy investor sentiment about earnings season.

Investors also reacted positively to privately held Liberty Mutual’s plan to acquire another insurance company, Safeco. The $6.1-billion deal, which would create the country’s fifth-biggest property insurer, sent Safeco shares surging $20.71, or 46%, to $65.94.

Still, the stock market’s movements were somewhat erratic Wednesday as investors who were concerned about inflation kept an eye on fluctuating oil prices. Oil initially pulled back but rebounded again as the government reported a rise in crude inventories but a drop in gasoline stockpiles. A day earlier, a record high price for oil helped send shares skidding.

“I think you’re just going to get continued volatility,” said Kevin Shacknofsky, co-portfolio manager of the Alpine Dynamic Dividend fund in Purchase, N.Y.

He said investors were concerned not only about rising energy prices but also the health of the financial sector.

The Dow rose 42.99, or 0.3%, to 12,763.22 after spiking 117 points, giving up those gains to trade down 17 points, then recovering some ground.

Broader stock indicators also closed higher. The Standard & Poor’s 500 index rose 3.99, or 0.3%, to 1,379.93. The technology-focused Nasdaq composite index logged a more sizable advance, rising 28.27, or 1.2%, to 2,405.21.

Light, sweet crude oil for June delivery rose 23 cents to settle at $118.30 a barrel on the New York Mercantile Exchange while gasoline touched all-time highs. On Tuesday, May futures hit a trading record of $119.90.

Bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite to its price, rose to 3.73% from 3.69% late Tuesday.

The dollar was mixed against other major currencies, with the euro losing 0.010 to $1.590 against the greenback.

Gold prices fell $16.10 to $906.20 an ounce.

So far, quarterly results haven’t given investors enough insight into what will drive profit growth in the coming quarters, said Bill Schultz, chief investment officer at McQueen, Ball & Associates in Bethlehem, Pa.

“Where does this earnings growth come from going forward? Maybe we haven’t seen the last of the sub-prime problem or the consumer slowdown,” he said. “I think people are just struggling to determine what is going to be the catalyst.”

He also said investors were worried about rising energy prices weighing on consumer spending, which accounts for about 70% of U.S. economic activity.

“You have concerns now that the higher gas prices will exacerbate the slowdown,” he said.

Wall Street has been digesting the flood of quarterly corporate numbers arriving in recent weeks as it tries to ascertain how long a slowdown in the economy might last. With little in the way of economic news expected this week, investors are left to concentrate on corporate news and await the next interest rate decision from the Federal Reserve, which is due in a week.

Boeing rose $3.53, or 4.5%, to $82.09 after its earnings report. Broadcom rose $3.84, or 16.3%, to $27.39, while Anadigics jumped $2.76, or 33.1%, to $11.09.

Some corporate results Wednesday painted a lackluster picture, however. Bond insurer Ambac Financial Group declined $2.57, or 42.6%, to $3.46 after it said it swung to a loss of $1.7 billion from a profit of $213.3 million a year earlier. The loss came in part because of charges for bonds backed by soured mortgages.

After the market closed, Amazon.com reported a quarterly profit increase of 29%. The results surpassed analysts’ expectations, but Amazon shares fell more than 4% in after-hours trading, having closed up $1.40 at $81 on Wednesday. The online retailer’s lowered operating income guidance for the year appeared to disappoint Wall Street.

Today, investors will be examining profit reports from a slew of companies, including Microsoft, Motorola, 3M and American Express, that may help shape the market’s overall perception of earnings.

The Russell 2,000 index of smaller companies rose 4.40, or 0.6%, to 708.11.

Overseas, Japan’s Nikkei stock average gained 0.2%. Britain’s FTSE-100 rose 0.8%, Germany’s DAX index rose 1% and France’s CAC-40 rose 1.5%.