NEW YORK – Stocks ended a quiet session with a moderate gain yesterday on strong earnings news and a decline in the trade deficit.
Wall Street rebounded from Tuesday's losses after Circuit City Stores Inc. reported its earnings jumped 65 percent. The electronic retailer's news, coming off an upbeat earnings report from Alcoa Inc. early in the week, reassured investors nervous about rising commodity prices and their impact on corporate profits.
In economic news, America's trade deficit improved in February, as the imbalance with China dropped to the lowest level in nearly a year.
Gains in the broad market were limited as investors remain concerned that high energy prices and benchmark interest rates near 5 percent will hurt economic growth, analysts said.
“So far we've had pretty strong earnings reports, and of course, that helps,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. “But the reason why we are not seeing investors more enthusiastic about stocks is that oil is once again near $70 and interest rates are on the rise.”
The Dow Jones industrial average rose 40.34, or 0.36 percent, to 11,129.97.
Broader stock indicators also closed higher. The Standard & Poor's 500 index rose 1.55, or 0.12 percent, to 1,288.12, and the Nasdaq composite index rose 4.33, or 0.19 percent, to 2,314.68. The Russell 2000 index of smaller companies rose 5.66, or 0.76 percent, to 747.77.
The market seems to be moving in a pattern similar to recent earnings seasons, in which the market rises with high expectations for earnings before companies begin to announce, then enters a pullback or a lull as earnings season begins, said Richard E. Cripps, chief market strategist for chief market strategist for Stifel Nicolaus brokerage.
Investors were also watching events overseas; nervousness about Iran's nuclear capabilities contributed to Wall Street's decline on Tuesday, when the Dow fell more than 51 points.
Bonds fell, with the yield on the 10-year Treasury note at 4.98 percent, up from 4.93 percent late Tuesday. The U.S. dollar was mixed against other major currencies. Gold prices edged higher.
Crude oil futures fell. A barrel of light crude settled at $68.62, down 36 cents, in trading on the New York Mercantile Exchange.
Energy companies' shares were the biggest drag on the S&P 500, following a retreat in oil prices. Chevron Corp. fell 1.3 percent, or 79 cents, to $58.67, and Exxon Mobil Corp. slid 0.9 percent, or 54 cents, to $61.46 on the New York Stock Exchange.
Alcoa, which reported earnings after the close of trading Monday, was unchanged at $34.09.
Advancing issues narrowly outnumbered decliners on The New York Stock Exchange, where preliminary consolidated volume came to 1.97 billion shares, down from 2.28 billion at the same time Tuesday.
Overseas, Japan's Nikkei stock average fell 1.47 percent. Britain's FTSE 100 dropped 0.26 percent, Germany's DAX index fell 0.12 percent, and France's CAC-40 lost 0.54 percent.
