Stocks trade in tight range following fresh earnings; traders eye G-20 conference 

Stephen Bernard, AP Business Writer, On Friday October 22, 2010

NEW YORK (AP) — Stocks fluctuated in a tight range Friday as traders poured through another batch of earnings looking for clues about the health of the economy.

Friday’s moves also appear to be held in check as investors turn some of their attention to a meeting of finance ministers and central bank governors from the Group of 20. The group is meeting as tensions grow over a brewing currency battle that could affect global trade.

Traders received another batch of earnings that beat analysts’ forecasts, led by Dow Jones components Verizon Communications Inc. and American Express Co. But results were not strong enough to give investors the confidence to drive shares sharply higher. The Dow fell about 20 points in morning trading, but broader indexes were slightly positive and rising stocks outpaced those that fell on the New York Stock Exchange.

Verizon shares dipped after it added its fewest number of overall subscribers in a decade and its profit fell. Manufacturer Honeywell International Inc. reported a profit that beat estimates, but it raised its earnings outlook to a level that still fell short of expectations.

Amazon.com Inc. shares slipped even though it also beat forecasts with its report Thursday after the market closed. The online retailer’s margins narrowed as it ramped up spending, which concerned investors.

Oil services company Schlumberger Ltd. and regional bank KeyCorp were among the biggest beneficiaries of strong earnings. Schlumberger’s results got a big lift from increased land-based drilling activities in the U.S. and Canada. KeyCorp’s profits were helped by a drop in losses from customers defaulting on loans.

The Dow fell 20.74, or 0.2 percent, to 11,125.98 in morning trading.

The Dow is trying to extend a two-day winning streak that has been built on upbeat earnings and corporate outlooks. It ended Thursday at its highest closing level since May 3 and was on the brink of closing at its highest level in more than two years before shares pared their gains in afternoon trading.

The Standard & Poor’s 500 index rose 0.35, or less than 0.1 percent, to 1,180.61, while the Nasdaq composite index rose 4.06, or 0.2 percent, to 2,463.73.

The G-20 meeting is adding some caution to the market, which has been volatile throughout the week. Shares dropped early in the week because of global economic concerns before recovering in recent days following the string of earnings reports.

Finance ministers and central bank governors are meeting to discuss a growing trend of countries trying to devalue their currency to gain an advantage in the international marketplace.

There are worries that some countries, like China, are holding their currencies at artificially low levels. That gives them an advantage in exporting goods as the global economy slowly recovers from a deep recession.

The dollar fell slightly against other major currencies, but still remains near a 15-year low against Japan’s yen. It’s also near its lowest level of the year against the euro.

Since the end of August, the ICE Futures US dollar index, which measures the dollar against six other currencies, has dropped nearly 7 percent.

Verizon shares fell 45 cents to $32.07, while American Express dropped $1.07, or 2.7 percent, to $39.20. Honeywell fell 67 cents to $46.00. Amazon fell $1.48 to $163.49.

Schlumberger jumped $2.68, or 4.2 percent, to $66.99. KeyCorp rose 10 cents to $8.44.

Source: Associated Press