Stocks seesaw after earnings, economic reports

NEW YORK (AP) — Stocks seesawed in early trading Tuesday as investors weighed strong earnings reports from Johnson & Johnson and Goldman Sachs against a negative reading on inflation.

Goldman Sachs Group Inc. posted solid second-quarter results, easily surpassing analysts' expectations, thanks to big gains in trading and underwriting. Goldman earned $4.93 per share, well above analysts' forecasts of $3.54 per share.

Investors also cheered a better-than-expected report from Johnson & Johnson, one of the 30 stocks that make up the Dow Jones industrial average. The health care products maker's profit fell 3.5 percent but still topped analysts' estimates.

A positive report on retail sales also helped buoy stocks as the Commerce Department said retail sales rose in June by the largest amount in five months.

In the negative column, a separate report showed that wholesale prices rose far more than expected in June and the most since November 2007, due partly to higher energy prices.

The 1.8 percent jump in the Producer Price Index, which tracks the costs of goods before they reach store shelves, was much more than the 0.9 percent gain economists had expected. That sent Treasury yields higher on worries about inflation. The yield on the 10-year note rose to 3.40 percent from 3.35 percent as its price fell 13/32.

The stock market has been struggling to find direction over the past month, having largely given up on a massive spring rally as troubling signs began to emerge on the economy including rising unemployment and waning consumer confidence, undermining a sense of optimism that drove stocks sharply higher since March.

The beginning of second-quarter earnings reports this week brings the market its next set of data to parse on the economy, and so far the mixed messages left stock indicators drifting in and out of positive territory.

In morning trading, the Dow fell 15.12, or 0.2 percent, to 8,316.56. The Standard & Poor's 500 index slipped 1.42, or 0.2 percent, to 899.63, while the Nasdaq composite index lost 5.87, or 0.3 percent, to 1,787.34.

Investors sent stocks sharply higher on Monday after four weeks of mixed trading. The Dow jumped 2.3 percent — its best performance since June 1 — and all 30 components of the index rose on the same day, the first time that's happened since late March.