Stocks Trade Mixed After Intel Shortfall

Stocks were mixed in early trading Wednesday after technology leader Intel Corp. announced disappointing earnings but JPMorgan Chase & Co. offered some relief for investors concerned about the health of banks.

The market was edgy, particularly after a plunge Tuesday that took the Dow Jones industrials down nearly 280 points. Investor patience has been tested by economists' predictions that a recession is at hand and by unsteadiness in the financial sector, where many banks are struggling to restore damaged balance sheets.

Intel's failure to meet earnings and revenue forecasts for the fourth quarter and new first-quarter revenue guidance that is at the low end of analysts' forecasts weighed on technology shares. Earlier this week there was market speculation that the technology sector, which sometimes benefits from a weak dollar and overseas strength, might be able to withstand the weakness sweeping other parts of the economy.

The technology sector saw some cheer Wednesday, thanks to Oracle Corp.'s deal to buy BEA Systems Inc. for about $7.85 billion. Last year BEA rejected a less expensive bid from Oracle, which raised its offer but not to the level sought by BEA.

JPMorgan Chase offered a first-quarter earnings report that revealed relatively light exposure to the subprime lending crisis as it booked a write-down of $1.3 billion, which was smaller than the massive losses of peers like Citigroup Inc. The company had a quarterly profit that fell below analysts' expectations.

In the first hour of trading, the Dow rose 37.31, or 0.30 percent, to 12,538.42.

Broader stock indicators were narrowly mixed. The Standard & Poor's 500 index rose 3.60, or 0.26 percent, to 1,384.55, and the tech-dominated Nasdaq composite index fell 7.12, or 0.29 percent, to 2,410.47, reflecting investors' unease about Intel.

The Labor Department reported that consumer prices in December showed an increase of 0.3 percent for the headline figure and a 0.2 percent advance for the core rate, which strips out often-volatile food and energy prices. Both figures had been expected to rise by 0.2 percent, according to Thomson/IFR.

The Federal Reserve, in setting monetary policy, is known to pay closer attention to the core rate. In any case, investors appear more worried about the prospect of slower growth than that of higher inflation.

In addition, Fed Chairman Ben Bernanke already has sent strong signals that another rate cut is on the way this month. The Fed's next monetary policy meeting is Jan. 29-30, and some investors are calling for a rate cut before then.

The Fed also said output at the nation's factories, mines and utilities showed no growth in December. Wall Street had expected industrial production to show a 0.2 percent decline in output, after a 0.3 percent November gain.

In overseas trade, Japan's Nikkei gave up 3.35 percent. In afternoon trading, London's FTSE 100 fell 0.21 percent, Frankfurt's DAX fell 0.38 percent and Paris' CAC rose 0.40 percent.