U.S. stocks rose on Wednesday, after JPMorgan Chase & Co. and Wells Fargo & Co. reported quarterly results not worse than expectations, giving some hope that the battered financial sector may be able to cut some of its losses.
JPMorgan Chase rose 6.5 percent after reporting a 34 percent drop in fourth quarter profit and writing down more than $1 billion in assets related in part to the slumping mortgage market. It was a much smaller write down than its competitor Citigroup. Wells Fargo profit fell 38 percent in its latest quarter, but matched analyst estimates.
U.S. stocks initially fell on Wednesday, a day after Intel said demand for its products would be lower than expected, a move which disappointed investors who believed technology stocks were a safe haven in the midst of rising recessionary concerns. Markets around the world fell after Intel's announcement late yesterday.
After a volatile start, the Dow Jones Industrial Average made brief gains gained 17.07 points, or 0.14 percent to 12,518.18 at 1:00 p.m. in New York.
Intel, the world's largest computer-chip maker led the drop among the blue chips, with its shares sliding 11.8 percent. The company reported a 51 percent jump in net profit, but the results still came in short of Wall Street expectations. Tech stocks, especially from companies with overseas customers, were seen as particularly safe from U.S. market problems.
The Standard & Poor's 500 Index lost 2.07 points, or 0.15 percent to 1,378.88. The Nasdaq Composite Index was down 13.23 points, or 0.55 percent, 2,404.36.
European shares slid to a 16-month low while Asia's regional benchmark fell to its lowest since August. Indexes in Japan, Hong Kong and Australia all dropped by more than 3 percent.
Intel slumped $2.60, or 11.5 percent, to $20.14. First- quarter sales will rise to as little as $9.4 billion, the chipmaker said yesterday after the close of trading, causing Lehman Brothers to cut its price estimate on the stock by 23 percent to $23.
Meanwhile, Exxon Mobil Corp. and Chevron Corp. led energy shares lower on the New York Stock Exchange as oil prices decreased on concern the economy may slip into recession.
Exxon, the largest U.S. oil company, declined $1.72 to $87.30. Chevron Corp., the second-biggest, lost $1.43 to $86.84. Oil fell $1.99 to $89.91 a barrel.
The S&P 500 has dropped 6.4 percent so far this year, while the Dow average is down 6.1 percent and the Nasdaq Composite has lost 10 percent.