US stocks were little changed on Thursday as optimism about technology profits helped cancel out worries about how much the credit crunch has hurt the economy, after disappointing earnings from Bank of America.
Technology stocks once again outperformed the broader market and lifted the Nasdaq, as investors anticipated more strong results in the sector following a flurry of robust earnings this week. Bank of America, the second-largest US bank, had set the tone earlier in the day after its profit plummeted much more than expected, having been bloodied by the summer's credit market turmoil.
A fresh US oil price record at $89.78 a barrel added to investors' concerns about the outlook for consumer and business spending. Oil futures rose 2.4 percent on lingering geopolitical worries and record weakness in the dollar. But companies that benefit from a weaker dollar gained, with shares of material companies soaring. The S&P materials index rose 1.2 percent.
"We've had a continued stream of disappointing earnings from the financial sector, with Bank of America the latest culprit," said Bucky Hellwig, senior vice president at Morgan Asset Management, in Birmingham, Alabama.
The Dow Jones industrial average dipped 3.58 points, or 0.03 percent, to end at 13,888.96. The Standard & Poor's 500 Index was down 1.16 points, or 0.08 percent, at 1,540.08. The Nasdaq Composite Index was up 6.64 points, or 0.24 percent, at 2,799.31.
After the closing bell on Wall Street, shares of Google Inc swung up and down after the Web search leader posted a 46 percent rise in profit that topped analysts' estimates.
During the regular session, Bank of America shares dropped 2.4 percent to close at $48.85 on the New York Stock Exchange. Its earnings were the latest in a series of disappointing bank results. On Monday, No 1 US bank Citigroup reported a large slide in profits and on Wednesday, Washington Mutual Inc, the largest US savings and loan, blamed a sharp drop in earnings on mounting mortgage losses. Shares of Citigroup fell 1.9 percent to $43.83, while Washington Mutual sank 7.7 percent to $30.52.The Philadelphia KBW Bank Index slid 1 percent.
Adding to concerns about the economy, a survey showed factory activity in the US Mid-Atlantic region grew more weakly than expected in October. Earlier, a report suggesting weakness in the labour market raised expectations that the Federal Reserve would cut rates to forestall a downturn. Interest-rate futures showed the perceived chance of a rate cut by the Fed at month's end to help the economy had grown to 72 percent.
Shares of mortgage lender Countrywide Financial Corp fell 4.8 percent to $16.51 after the Wall Street Journal reported federal regulators had begun an informal probe into stock sales by the chief executive.
Baxter International Inc shares rose 7.7 percent to $59.58 after the medical products maker posted better-than-expected earnings on improved gross margins and strong sales for its blood-therapy products.
Trading was thin on the NYSE, with about 1.27 billion shares changing hands, falling short of last year's estimated daily average of 1.84 billion, while on the Nasdaq, about 2.03 billion shares traded, a touch above last year's daily average of 2.02 billion. Declining stocks narrowly edged out advancing ones on both the NYSE and the Nasdaq.