Wall Street rallying on tech, financial stocks

NEW YORK (AP) – Wall Street adopted a “glass is half full” approach to earnings Friday, rebounding from a sharp early loss as investors decided to focus on some bright spots among otherwise weak corporate earnings reports. The broad market indexes were up moderately, while the Dow Jones industrial average was little changed.

Jim Herrell, chief investment office at Partnervest Financial Group, said Google’s better-than-expected results announced Thursday after the market closed and after insurer Aflac Inc. affirmed its financial health.

Technology stocks got a boost from Google’s surpassing analysts’ estimates. Excluding one-time charges, Google said after the end of trading Thursday that it earned about $5.10 per share, compared with analysts’ expectations for profit of $4.95 per share, according to Thomson Reuters. Google stock rose $22.86, or 7.5 percent, to $329.36.

The battered financial industry was rallying on the strength of the insurance industry, particularly Aflac. After its shares tumbled 37 percent Thursday on reports it did not have enough capital to cover risky investments, shares of Aflac are up sharply Friday. The company issued a statement and an analyst released a research note backing the company’s financial position. Aflac shares rose $3.85, or 16.8 percent, to $26.75.

In afternoon trading, the Dow industrials fell 4.62, or 0.06 percent, to 8,118.18. The Dow had been down more than 200 points early in the day.

Broader stock indicators were higher. The Standard & Poor’s 500 index rose 7.92, or 0.96 percent, to 835.42, while the Nasdaq composite index rose 24.91, or 1.70 percent, to 1,490.40.

Herrell said General Electric Co.’s fourth-quarter results were worrying investors and holding down the Dow. GE is a component of the Dow.

While the 46 percent drop in earnings met Wall Street’s lowered expectations, investors are worried GE will reduce its dividend. They are also nervous the company could lose its coveted “AAA” credit rating because of the recession that has crimped lending at GE Capital and hurt its industrial and entertainment businesses. GE fell $1.15, or 8.5 percent, to $12.33.

The intraday comeback is just the latest in a turbulent week, with the Dow tumbling 4 percent Tuesday only to regain more than 3 percent Wednesday, followed by another big drop Thursday. Volatility has been more the rule than the exception in recent trading as investors sort through a plethora of wide-ranging earnings reports.

“I think it’s just a matter of what side of the bed the market wakes up on,” said Joe Clark, managing partner at Financial Enhancement Group.

Corporate results are pushing and pulling the market as investors try to determine where the economy is headed.

Markets fell sharply Friday morning, weighed down by worse-than-expected results at a wide range of companies that had investors worrying that the economy is in for an even longer recession than expected.

Reports from a range of industries gave fresh evidence of the toll the weak economy is taking: Copier and printer maker Xerox Corp. fell 7 percent after its results fell short of expectations. Capital One Financial Corp., which focuses on credit card lending, reported a loss rather than the profit Wall Street expected after it set aside money to cover bad debt. The stock lost 12 percent. And Harley-Davidson Inc. said it will cut jobs and reduce shipments because of falling demand. The company’s earnings for the final quarter of 2008 fell nearly 60 percent, sending the stock down 4 percent.

In other corporate news, The Wall Street Journal is reporting drug maker Pfizer Inc. is in talks to acquire rival Wyeth in a deal valued at more than $60 billion. Citing unidentified sources, the Journal said the discussions have been going on for months, but a deal is not imminent. Wyeth jumped $3.18, or 8.2 percent, to $42.01, while Pfizer fell 13 cents to $17.08.

Meanwhile, bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.64 percent from 2.60 percent late Thursday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.11 percent from 0.09 percent late Thursday.

The dollar was mixed against other major currencies, while gold prices also rose.

Oil prices rose $1.95 to $45.62 a barrel on the New York Mercantile Exchange.

Overseas, Japan’s Nikkei stock average fell 3.8 percent. Britain’s FTSE 100 rose 0.01 percent, Germany’s DAX index fell 0.96 percent, and France’s CAC-40 lost 0.71 percent.