U.S. stocks on Friday fell for a third day following lowered earnings forecasts by Starbucks Corp and FedEx Corp.,making investors uneasy about the outlook for consumer spending.
A slight rebound during late morning trading was triggered by bargain hunters rushing in to take advantage of lower prices.
The concern over consumer spending led stocks lower, especially in the financial services and technology sector.
An upgrade of Hewlett-Packard Co. satisfied concerns over a drop in consumer spending and ongoing trouble in the credit markets. Hewlett-Packard (NYSE: HPQ) was up 1.5 percent after its upgrade to overweight from equal-weight by Morgan Stanley.
Seattle-based Starbucks shares dipped to their lowest level in three years after reporting its first-ever decline in customer visits. A rise in fuel costs and a weak demand affected overall profits for FedEx, causing the biggest drop since July 2006. Reduced earnings forecasts from both companies added to the concern that consumer spending is being hurt by the housing slump.
The Dow Jones industrial average was up 23.49 points, or 0.18 percent, at 13,133.54. The Nasdaq Composite Index was up 0.36 points, or 0.01 percent, at 2,618.87. The Standard & Poor's 500 Index rose 2.14 points, or 0.15 percent, at 1,453.29.