Stocks Edge Higher in Early Trading

By REUTERS July 9, 2014

Wall Street edged higher on Wednesday as companies began reporting quarterly earnings and traders looked for reasons to resume buying after a sharp decline from recent highs.

In early trading the Standard & Poor's 500-stock index, the Dow Jones industrial average and the Nasdaq composite were all about 0.2 percent higher.

The S.& P. is coming off its biggest two-day slump since mid-May.

Alcoa rose 3 percent a day after reporting second-quarter adjusted earnings and revenue that topped expectations.

While the former Dow component is not considered a market-moving industry bellwether, the aluminum maker is sometimes viewed as setting the tone for the season because it is one of the first high-profile names out of the gate. Wells Fargo will report on Friday, while dozens of closely watched companies, including numerous Dow components, will come out next week.

S.&P. 500 profits are predicted to gain 6.2 percent in the second quarter, according to Thomson Reuters data, down from the 8.4 percent growth forecast at the start of April. Revenue is expected to be up 3 percent. Analysts are looking to earnings for confirmation that the economy recovered in the second quarter from the impact of a harsh winter weather in the first quarter.

Investors are also looking ahead to the release of minutes from the Federal Open Market Committee's June meeting, which will be released at Wednesday at 2 p.m. The minutes will be scrutinized for any insight into when the Federal Reserve will raise interest rates. The strength of the recent payroll report led to speculation that it would come sooner than previously anticipated.

While the Dow closed back below 17,000 in Tuesday's decline, the S.&P. recovered from its lows of the session and held near its 14-day moving average. If the benchmark index had ended decisively below that level, it would be a sign of weak near-term momentum. The two-day skid comes after a sharp Wall Street rally that took major indexes to repeated records.

Citigroup is said to be close to paying about $7 billion to resolve a federal inquiry into whether it defrauded investors on billions of dollars worth of mortgage securities in the run-up to the financial crisis, a source familiar with the matter told Reuters late Tuesday. Shares fell 1 percent.

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