US stocks waver on upbeat earnings, data

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Stocks lost momentum after opening with modest gains. The Dow Jones Industrial Average edged up 13.17 points (0.11 per cent) to 12,214.84 at around 1500 GMT, while the tech-heavy Nasdaq Composite fell 2.51 points (0.09 per cent) to 2,732.87.

The broad-market S&P 500 stock index advanced a mere 0.85 point (0.07 per cent) to 1,305.99.

"A sudden flurry of selling pressure has dashed stocks' early advance," Briefing.com analysts said.

The equity markets had been on the upswing following Monday's sharp losses after Standard & Poor's downgraded the US credit rating outlook, "fueled by a plethora of favorable data from the earnings and economic fronts," Charles Schwab analysts said in a client note.

"Goldman Sachs Group Inc. easily exceeded analysts' earnings and revenue projections, along with Dow member Johnson & Johnson," they added.

Wall Street titan Goldman Sachs reported a 72 per cent drop in first-quarter profit from a year ago on falling revenue, but cited improving market and economic conditions. Goldman shares reversed early gains in the downdraft and fell 0.5 per cent to $153.03.

Health-care giant Johnson & Johnson surged 3.2 per cent to $62.40 after reporting a 23 per cent drop in net profit that was better than the consensus forecast.

Computer chip maker Texas Instruments slumped 2.0 per cent to $13.91. The company reported after the market closed Monday disappointing earnings, citing the impact of a March 11 earthquake on Japanese demand.

On the merger and acquisition front, US securities exchanges Nasdaq and ICE announced Tuesday a sweetened bid to buy NYSE Euronext, in a battle to top a rival offer from Deutsche Boerse and create the world's biggest exchange.

The NASDAQ OMX and Intercontinental Exchange cash-and-stock bid values NYSE Euronext at $42.67 per share, the companies said, raising their rejected initial bid of $42.50 per share.

The offer is 21 per cent, or $2 billion, above Deutsche Boerse's merger proposal valued at $35.29 per share, the two firms said.

NASDAQ OMX slipped 0.4 per cent to $27.46, ICE was down 0.6 per cent at $119.07 and Deutsche Boerse rose 0.3 per cent to $7.53.

Investors digested improved numbers on the deeply depressed housing sector.

Construction of new homes rebounded in March, with gains in both starts and permits, the Commerce Department reported.

"Residential construction regained some lost ground in March, but construction starts remain very low from a historical perspective," said Alexander Miron at Moody's Analytics.

US stocks tumbled Monday after the S&P's first warning on US debt. The Dow fell 1.14 per cent, the Nasdaq skidded 1.06 per cent and the S&P 500 shed 1.10 per cent.

The bond market, which had finished higher despite the S&P warning, continued to firm. The yield on the 10-year Treasury was flat at 3.37 per cent, while that on the 30-year Treasury slipped to 4.44 per cent from 4.45 per cent.

Bond yields and prices move in opposite directions.