Stocks End Mixed Despite Strong Earnings Reports

Stocks ended mixed Wednesday as the bulls took a break despite some strong earnings reports and upbeat news on the U.S. trade and budget deficits.

Major indexes showed little change after four days of gains, and losers outnumbered winners by 6 to 5 on the New York Stock Exchange and on Nasdaq.

The Standard & Poor’s 500 inched up 1.08 points, or 0.1%, to 1,223.29, edging closer to its four-year high set in March.

The tech-dominated Nasdaq composite rose 0.96 point to 2,144.11. The S&P; 600 small-stock index fell 1.84 points, or 0.5%, to 346.50 after hitting a record high Tuesday.

The Dow Jones industrial average rose 43.50 points, or 0.4%, to 10,557.39, helped by a rally in IBM, which gained $1.41 to $81.45. Research firm Sanford Bernstein upgraded IBM to “outperform” from “market perform,” citing optimism about earnings in the second half of this year.

The government’s report of a narrower trade deficit in May, and the Bush administration’s $94-billion reduction in its estimate of this year’s budget deficit, failed to inspire buying on Wall Street, but did spark a rally in the dollar.

In commodity markets, near-term crude oil futures in New York dipped 61 cents to $60.01 a barrel after rising $1.70 Tuesday.

Analysts said some investors were waiting for more second-quarter profit reports to confirm their optimism about the economy.

“If companies report solid results and give forward guidance, I think that can build investor confidence and certainly encourage them to put some more money to work,” said Michael Malone, a trader at SG Cowen & Co. in New York.

In the bond market, Treasury yields continued to work their way higher. The 10-year T-note ended at a nine-week high of 4.16%, from 4.14% on Tuesday.

Some bond investors were rattled after an auction of $13 billion in new 5-year T-notes was poorly received. The notes sold at a yield of 3.97%.

Among the day’s highlights:

* Stocks gaining on earnings reports or projections included Harley-Davidson, which rose 68 cents to $50.38. The motorcycle maker said second-quarter profit fell 4%, but that was better than expected. Still, long-term growth concerns pulled the stock down from $52.31 early in the session, analysts said.

* Los Angeles-based California Pizza Kitchen soared $4.27 to $31.94 after boosting its second-quarter profit estimate. Costa Mesa-based consulting firm Resources Connection jumped $5.50 to $29.35 after reporting results that beat estimates.

* After regular trading ended, tech leaders Advanced Micro Devices and Apple Computer posted higher-than-expected quarterly results, sending their shares up in after-hours trading.

* Gannett, the nation’s largest newspaper publisher, said second-quarter earnings fell 4.5% on lower broadcasting revenue and higher costs. The results matched expectations. The stock lost 46 cents to $72.95.

* Healthcare facility stocks sank after HCA, the largest U.S. hospital chain, said second-quarter profit rose less than expected because admissions fell and the number of uninsured patients receiving treatment climbed. HCA slid $4.86 to $50.05, Universal Health Services lost $2.25 to $57.40, and Triad Hospitals dropped $2.92 to $51.47.

Shares of nursing home operator Manor Care, which warned Monday that its quarterly results would miss estimates, eased 33 cents to $36.21 after dropping $3.22 on Tuesday.