Market split after big rally

NEW YORK (CNNMoney.com) -- The Dow clung to gains Wednesday afternoon, but the Nasdaq struggled as investors attempted to find some stability after the previous session's big rally.

A mostly positive take on the economy and pricing pressure in the Fed's periodic "beige book" survey seemed to help sentiment, but stocks remained choppy nonetheless.

The Dow Jones industrial average (up 34.85 to 12,242.44, Charts) added a few points with under 2 hours left in the session. The blue-chip barometer jumped 157 points in the previous session, scoring its biggest one-day point gain since July of last year.

The broader S&P 500 (up 2.95 to 1,398.36, Charts) index also added a few points, while the tech-heavy Nasdaq (down 3.15 to 2,381.99, Charts) composite lost a few points. Both major gauges surged the previous day too.

The major gauges had been on both sides of unchanged throughout the morning, before the blue chips finally found a little momentum in the early afternoon.

A run up in oil, gold and silver prices gave a lift to the underlying stocks. In addition, a number of financial and homebuilding stocks bounced.

Nonetheless, gains were limited, as investors continued to react to Tuesday's surprising surge.

"There was a big bounce yesterday and today the market is trying to catch its breath, waiting for another shoe to fall," said Greg Church, president at Church Capital.

"If it can hang in for another few days and basically hold most of the gains, we can then move higher," he said.

Stocks surged Tuesday after a rebound in overseas markets reassured investors after last week's global market decline.

However, the advance seemed to be a one-day wonder, with investors taking a step back Wednesday, particularly ahead of some telling economic reports due later in the week, led by Friday's monthly employment report.

Ahead of that, investors eyed the monthly ADP Employer Services report, which showed that private employers added 57,000 jobs last month, below forecasts for 100,000, Reuters reported.

Wednesday afternoon brought the release of the Fed's beige book survey, which showed that several U.S. regions saw slower economic growth in February. However, the report also showed that there was little increase in pricing pressure, despite tight labor market conditions.

Earlier Wednesday afternoon, Chicago Federal Reserve Bank President Michael Moskow spoke, reiterating the Fed's recent message that a rise in inflation is a greater risk to the economy than a slowdown in growth. Moskow is a voting member of the Fed's policy committee.

Former Federal Reserve Chairman Alan Greenspan said in a speech late Wednesday morning that a bottom has been hit in the decline of U.S. home sales.

U.S. light crude oil for April delivery jumped $1.40 to $61.70 a barrel on the New York Mercantile Exchange after a report showed a bigger-than-expected dip in weekly crude oil inventories.

While the rise in oil prices was a negative for investor sentiment, it was a positive for underlying oil service stocks, which rallied. Also rallying: natural gas, gold and silver stocks.

Alcoa (up $0.41 to $32.82, Charts), Boeing (up $1.33 to $89.15, Charts), Caterpillar (up $0.94 to $64.56, Charts), Hewlett Packard (up $0.83 to $40.26, Charts) and Exxon Mobil (up $1.65 to $72.65, Charts) were among the stocks giving the Dow a boost.

Financial stocks were higher, including a number of companies in the subprime lending space.

Fremont General (up $1.45 to $8.23, Charts) jumped 22 percent on reports that it is in talks with 5 or 6 buyers about unloading its mortgage business. That gave a lift to New Century Financial (up $0.45 to $5.47, Charts) and a few others in the sector.

But weakness in a variety of technology shares kept the Nasdaq near unchanged.

CV Therapeutics (down $3.09 to $9.21, Charts) slumped 25 percent in active Nasdaq trading after the biotech said late Tuesday that its angina treatment was not effective in a study of patients with acute or long-term heart disease.

Another biotech, Insmed (down $0.70 to $0.85, Charts), slumped more than 40 percent after saying that it is cutting one-third of its staff and reducing production following the settlement of a lawsuit regarding its growth-deficiency treatment. (Full story)

Take-Two Interactive (up $1.69 to $19.30, Charts) rallied 10 percent on news that a group of its largest investors is seeking a management shakeup at the video game manufacturer, including the ouster of its CEO.

Market breadth turned positive. On the New York Stock Exchange, winners beat losers 3 to 2 on volume of 1.09 billion shares. On the Nasdaq, advancers topped decliners by a narrow margin on volume of 1.37 billion shares.

Overseas, markets were mixed, with most Asian markets ending lower and most European markets ending higher.

In currency trading, the dollar slipped versus the yen and the euro.

Treasury prices rose slightly, lowering the yield on the 10-year note to 4.52 percent from around 4.53 percent late Tuesday. Treasury prices and yields move in opposite directions.

COMEX gold for April delivery rose $6.30 to $652.50 an ounce.

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