Wall Street rises on deals, profit reports

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NEW YORK -- Wall Street rose Wednesday on some strong earnings and new deals, but not without a struggle, as mounting signs of a tougher lending climate continued to dog investors.

The stock market, coming off Tuesday's 226-point tumble in the Dow Jones industrial average, seesawed throughout Wednesday's session. Ultimately, it drew confidence from better-than-expected quarterly profits at Web retailer Amazon.com Inc. and plane manufacturer Boeing Co., and acquisitions involving German engineering company Siemens AG and drug maker Merck & Co.

Still, some investors worried that deteriorating lending conditions in both the home mortgage and corporate debt markets will cork this year's heavy stream of dealmaking. Buyouts usually involve taking on debt, and Wednesday, the banks raising funds for the turnaround of Chrysler Group had to postpone a $12 billion debt offer after investors balked at the deal's terms, according to people familiar with the situation who were not authorized to speak publicly.

Meanwhile, the National Association of Realtors on Wednesday confirmed that the housing market is far from recovery when it reported that sales of existing homes dropped 3.8% in June to the slowest rate in more than 4 years. The figure was worse than analysts expected, and followed data from the Mortgage Bankers Association showing mortgage applications fell for the first time in four weeks to a five-month low.

Wall Street, now at the peak of second-quarter earnings season, has been incredibly volatile lately. The stock market hasn't finished in the same direction for two straight sessions since Monday and Tuesday of last week, and Wednesday's movements over the course of the day mirrored that lurching, up-and-down pattern. The market will likely remain rocky as investors try to assess whether problems related to home lending will hurt the broader economy.

"It's an open-ended unknown, and that's the problem," said Richard E. Cripps, chief market strategist for St. Louis-based broker Stifel Nicolaus.

According to preliminary calculations, the Dow Jones industrial average rose 68.12, or 0.50%, to 13,785.07, after trading up more than 100 points and down more than 40.

Broader stock indicators also rose after falling earlier in the day. The Standard & Poor's 500 index climbed 7.05, or 0.47%, to 1,518.09, and the Nasdaq composite index rose 8.31, or 0.31%, to 2,648.17.

Despite the gains in the major indexes, declining issues outnumbered advancers by about 10 to 7 on the New York Stock Exchange, where volume came to 2.03 billion shares.
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