Stocks seesawed on Wednesday as disappointing quarterly results from top banks sparked caution over the health of financials, though sentiment rose after a robust earnings report from Apple Inc
The market was weighed down by a third-consecutive quarterly loss at Morgan Stanley
Morgan Stanley shares fell 1.3 percent to $27.20 while Wells Fargo dropped 6 percent to $23.83. Financials <.GSPF> were the worst-performing sector in the S&P 500, down 1.5 percent.
The increase in bad loans at Wells Fargo has broader implications for the banking sector, said Steve Goldman, market strategist at Weeden & Co in Greenwich, Connecticut.
On top of that, technicals say the market is overbought, he said, referring to the recent results-driven market run-up.
The Dow Jones industrial average <.DJI> edged up 7.18 points, or 0.08 percent, at 8,923.12. The Standard & Poor's 500 Index <.SPX> gained 0.75 points, or 0.09 percent, at 955.43. The Nasdaq Composite Index <.IXIC> rose 6.46 points, or 0.34 percent, at 1,922.66.
The Nasdaq ended Tuesday on a 10-day winning streak, its longest in 12 years.
Apple posted late on Tuesday quarterly profits that beat forecasts, helped by robust sales of Mac computers and iPhones and higher-than-expected gross margins, sending its shares up more than 4 percent to $158. For details
Also buoying the Nasdaq, Starbucks Corp
Drugmaker Pfizer Inc
Regional bank KeyCorp
Federal Reserve Chairman Ben Bernanke reiterated in testimony to the Senate Banking Committee that the U.S. economic outlook is improving but that supportive policies would be necessary for a while to prevent rising joblessness from sapping the recovery.
(Additional reporting by Chuck Mikolajczak; Editing by Padraic Cassidy