Stocks fluctuate after quarterly reports

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NEW YORK -- Wall Street turned lower Thursday after a batch of mixed earnings reports made investors more cautious about buying stocks in an uncertain economy. The pullback followed a huge rally in the previous session.

The market was jittery after the Philadelphia Federal Reserve said regional manufacturing activity has weakened further in April. The index of manufacturing activity fell to a negative 24.9 from a negative 17.4 in March. The survey found most manufacturing executives were "cautiously optimistic" about future activity.

Merrill Lynch & Co. reported a first-quarter loss of $2.14 billion, a shortfall that was wider than the average analyst estimate. The loss came after the world's largest brokerage wrote down the value of assets tied to mortgages and leveraged loans by several billion dollars. The company also said it would eliminate a total of 4,000 jobs. However, Merrill Chief Executive John Thain said during a conference call that business conditions in April appear better than in the first quarter.

Merrill's report followed a larger-than-anticipated rise in IBM Corp.'s quarterly earnings, but there were also disappointing results from Nokia Corp., the world's biggest mobile phone company, as well as drug maker Pfizer Inc.

Dan Laufenberg, chief economist for Ameriprise, said the market remains cautious, though less so than it has been in recent weeks and months.

"The market is going to go up and down. When you have nice moves like you had yesterday and you hold onto most of that gain I think that tends to be a more positive signal," he said.

In late morning trading, the Dow Jones industrial average fell 44.46, or 0.35%, to 12,574.81 after fluctuating in earlier trading.

Broader stock indicators declined. The Standard & Poor's 500 index slipped 6.63, or 0.49%, to 1,358.08, and the Nasdaq composite index fell 21.67, or 0.92%, to 2,328.44.

Declining issues outnumbered advancers by about 4 to 3 on the New York Stock Exchange, where volume came to 394.8 million shares.

Wall Street's retreat came a day after stocks shot higher in response to stronger-than-expected earnings from JPMorgan Chase & Co., Coca-Cola Co. and Intel Corp. On Wednesday, the major indexes each rose more than 2%, with the Dow jumping more than 250 points.

The quarterly reports that investors parsed on Thursday were not as auspicious. Nokia, the Helsinki-based cell phone maker, said its profit rose by a weaker-than-expected 25%. It also said that its global market share is down slightly. Its U.S. shares fell $4.68, or 14%, to $29.02.

Pfizer fell 67 cents, or 3.2%, to $20.45 following the company's report that its first-quarter profit fell 18% due to competition from generics and falling sales of drugs including Lipitor, Norvasc and Zyrtec.

Meanwhile, Harley Davidson Inc. fell 73 cents to $36.06 after the motorcycle maker said its profit declined, that it was cutting hundreds of jobs and that it would ship up to 27,000 fewer motorcycles this year.

Merrill rose $1.11, or 2.5%, to $46.01.

IBM was a bright spot, boasting a higher-than-expected 26% jump in profits. IBM rose $2.92, or 2.4%, to $123.39.

Government bonds rose slightly in early trading. The 10-year Treasury note's yield, which moves opposite its price, dipped to 3.70% from 3.71% late Wednesday.

In economic news, the Labor Department reported that initial weekly claims rose by 17,000 to 372,000.

Oil prices continue to hit record highs, and recently surpassed the $115-a-barrel mark. Crude slipped 1 cent to $114.92 per barrel on the New York Mercantile Exchange.

Gold prices rose, while the dollar was mixed against other major currencies.

The Russell 2000 index of smaller companies fell 9.27, or 1.30%, to 704.12.

Overseas, Japan's Nikkei stock average rose 1.92%. Britain's FTSE 100 fell 1.15%, Germany's DAX index fell 0.24%, and France's CAC-40 declined 0.24%.
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