Wall St. bounces around
Stocks flip flop in early trading after last week's brutal selloff; credit markets, earnings in focus.
NEW YORK (CNNMoney.com) -- Investors couldn't make up their minds early Monday, with stocks mixed after the first hours of trading, as everyone kept an eye on the latest credit market news and corporate earnings.
The Dow Jones industrial average (up 46.83 to 13,312.30, Charts) lost about 9 points more than 70 minutes into the session, having been higher early in trading. Last week, the Dow tumbled 585 points on credit and housing market worries, posting its biggest percentage drop since March 2003.
Credit woes, which roiled global stock markets last week, did not appear to have subsided as American Home Mortgage Investment (up $0.00 to $10.47, Charts) announced late Friday that its banks are demanding it put up more cash after the mortgage lender wrote down the value of its loan and security portfolios significantly. Shares of the company lost about half of their value in premarket trade before trading was suspended on the Nasdaq.
Turmoil in the debt markets shook investors last week, raising concerns about a looming credit crunch. Tighter credit could bring the buyout boom, which has helped lift stock prices, to a halt.
It could also raise the borrowing costs for companies and pressure corporate earnings, and trim consumer spending, which is responsible for nearly three-quarters of the nation's economic activity.
On the earnings front, Dow component Verizon Communications (down $0.72 to $41.28, Charts, Fortune 500) reported improved earnings that met forecasts. And Verizon's wireless division, a joint venture with Vodafone Group (down $0.00 to $30.64, Charts), also announced it would purchase Rural Cellular (up $10.96 to $42.77, Charts) for $757 million, sending shares of the smaller carrier 34 percent higher in morning trade on the Nasdaq.
The family that controls Dow Jones (down $0.87 to $53.83, Charts) is due to make a decision on the $5 billion takeover bid by News Corp. (down $0.07 to $22.59, Charts, Fortune 500) by the end of Monday.
Dutch bank ABN Amro (up $0.83 to $48.14, Charts) adopted a neutral position on two rival takeover offer it has received after withdrawing support for a bid from British bank Barclays (up $0.35 to $55.28, Charts).
Treasury prices edged lower, lifting the yield on the 10-year note to 4.77 percent from the 4.76 percent level reached after bonds rallied Friday in reaction to the selloff in equities.
The dollar was lower against the euro and the yen.
Oil prices slipped after climbing above $77 a barrel, as U.S. light for September was trading 58 cents lower at $76.44 a barrel on the New York Mercantile Exchange.
COMEX gold for December gained 90 cents to $673.20 an ounce.