Stocks seesaw on earnings, mixed economic data

NEW YORK (AP) — Investors got the solid results from Goldman Sachs they had been looking for Tuesday, but found little else to calm their nerves about the fragile state of the economy.

Stocks fluctuated in a narrow range throughout the day, with some gaining on a handful of strong earnings, and others held in check by downbeat economic data. Treasurys tumbled on news of a jump in inflation.

"You're seeing one step back, one step forward and no one is really sure which way to go," said Doug Roberts, chief investment strategist at Channel Capital Research. "It's an environment of paralysis."

Investors were pleased that Goldman Sachs Group Inc.'s second-quarter earnings easily surpassed analysts' forecasts thanks to big gains in trading and underwriting. But the release of the results came as something of an anticlimax, as anticipation of a strong report sent the entire stock market soaring Monday.

Johnson & Johnson also had better-than-expected results, although its profits fell 3.5 percent.

Meanwhile, the day's economic reports reminded investors of the challenges businesses still face. Retail sales posted their largest gain in five months in June, but much of that increase came from higher gas prices. Prices for gas have fallen sharply since mid-June amid increasing concerns about energy demand, so the higher sales figures may not be sustainable.

Investors were also uneasy after a separate report showing wholesale prices rose far more than expected last month and the most since November 2007, due partly to higher energy prices. That sent Treasurys falling and their yields climbing.

The mix of earnings and economic reports over the next few weeks is likely to make for some difficult days on Wall Street. The stock market has already been drifting over the past month, having given up on a massive spring rally as troubling signs began to emerge on the economy including rising unemployment and waning consumer confidence. Unless companies start issuing promising outlooks for the second half of the year, it will be hard, if not impossible, for the market to resume that rally.

"We need a general consistent pattern of bullish news coming out to turn this market around," said Darin Newsom, senior analyst at DTN.

In late afternoon trading, the Dow rose 12.92, or 0.2 percent, to 8,344.60. The Standard & Poor's 500 index rose 2.55, or 0.3 percent, to 903.60, while the Nasdaq composite index rose 5.13, or 0.3 percent, to 1,798.34.