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Friday, January 27, 2012

DJIA, SPX Surrender Early Gains on Disappointing Data

Nevertheless, the blue-chip barometer maintained a perch atop 12,700
U.S. stocks spent time on both sides of the breakeven line today, as Wall Street weighed hot-and-cold earnings and economic reports. Initially, stronger-than-expected quarterly reports from Caterpillar (CAT) and 3M Company (MMM) bolstered the blue chips, while Netflix (NFLX) lured buyers to the Internet sector. Furthermore, a bigger-than-expected jump in durable-goods orders also helped the bulls maintain the reins in early trading. 

However, a hefty quarterly loss from AT&T (T) tempered the Street's earnings enthusiasm, while a lackluster report on new-home sales and a rise in weekly jobless claims eventually tipped the scales in the bears' favor. 

Against this backdrop, stocks whittled their gains as the session progressed, with all three major market indexes in the red by the closing bell.

The Dow Jones Industrial Average (DJIA – 12,734.63) peaked at 12,841.95 in early trading, but eventually finished 22.3 points, or 0.2%, lower. Nevertheless, the 12,700 level stepped up to provide support. Among the index's 30 components, Caterpillar and 3M paced the six advancing equities, notching earnings-related gains of 2.1% and 1.3%, respectively. Meanwhile, AT&T led the bearish majority, surrendering 2.5%, while Cisco Systems (CSCO) finished flat.

The S&P 500 Index (SPX – 1,318.45) traded as high as 1,333.47 before performing an about-face, giving up 7.6 points, or 0.6%, when all was said and done. 

Finally, the Nasdaq Composite (COMP – 2,805.28) jumped to 2,834.30 right out of the gate, but backpedaled to a loss of 13 points, or 0.5%, by the time the dust settled. Like the Dow, however, the tech-rich COMP found round-number support in afternoon trading, maintaining its perch atop the 2,800 level.


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