Stocks end mixed after rally as earnings loom

NEW YORK — Investors waiting for earnings reports to start rolling in held to modest moves after a two-day spike in stocks.

Stocks ended narrowly mixed Wednesday as financial and energy stocks rose, while industrial, material and technology stocks fell. The Dow Jones industrial average slipped 6 points, while broader indexes rose.

With little economic news to shape sentiment, investors are looking to earnings reports from the July-September quarter for clues about the economy.

Aluminum maker Alcoa Inc. was the first of the 30 companies that make up the Dow Jones industrial average to report results after the end of trading. The company's revenue and earnings topped expectations.

Investors spent the trading day not wanting to place big bets after the Dow had posted its best two-day gain since mid-July.

"Investors are holding tight here," said Eric Ross, director of research at Canaccord Adams. "There are people on both sides of the fence. A lot of people think this market is going to keep running and running and then others that are very nervous."

With the benchmark Standard & Poor's index up 56.3 percent since hitting a 12-year low in March, investors have been questioning whether a continued advance is justified given recent evidence that the economy's recovery will be rocky.

Even with big gains on Monday and Tuesday, the S&P 500 index has fallen in the past two weeks as encouraging trends in labor and manufacturing faltered. How the earnings reports fare in coming weeks will largely determine the direction of the market through the end of the year, Ross said.

Many companies beat modest earnings expectations in the second quarter by cutting costs, helping to fuel the market's rally through the summer. Now investors are hoping to see stronger sales driving earnings, which would signal a rebound in consumer spending. Many analysts are skeptical about how strong that spending will be.

"The consumer is just really damaged," said Len Blum, a managing partner at Westwood Capital LLC. "Every time we see a blip, it's not sustainable."

According to preliminary calculations, the Dow fell 5.67, or 0.1 percent, to 9,725.58. The S&P 500 index rose 2.86, or 0.3 percent, to 1,057.58, while the Nasdaq composite index rose 6.76, or 0.3 percent, to 2,110.33.

Among the earnings reports trickling in Wednesday, Costco Wholesale Corp. said profits fell 6 percent, partly due to a stronger dollar and increased employee benefit costs, but results still beat analysts' expectations. Shares rose $1.07 to $59.