Wall St. not smiling so much

NEW YORK (CNNMoney.com) -- Stocks trimmed gains early Tuesday afternoon, as upbeat earnings from Apple continued to boost the Nasdaq, but news that Wal-Mart has cut its spending plans for the year limited the Dow's advance.

The Dow Jones industrial average (Charts) and the S&P 500 (Charts) index both clung to slim gains nearly 2-1/2 hours into the session. The Nasdaq composite (Charts) added 0.6 percent.

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Stocks gained through the mid morning, as upbeat earnings from Apple, American Express and DuPont reassured investors after some recent disappointing quarterly reports.

But the advance hit some turbulence in the late morning after Wal-Mart Stores (Charts, Fortune 500) said it was cutting its capital spending for the year. The world's leading retailer is holding its annual meeting with analysts and investors Tuesday and Wednesday. Shares fell 3 percent.

Additionally, lower-than-expected forecasts from Texas Instruments and Coach weighed on those stocks, reminding Wall Street of how much profit growth is expected to slow this quarter.

Nonetheless, after last week's selloff, investors were willing to scoop up some of the beaten-down shares. Stocks tumbled last week on a mix of credit market fears and record oil prices, with the Dow losing 367 points in a single day.

Stocks may be due for more of a pullback, considering the extent of the recent run, the slower earnings, record oil prices and threats to economic expansion, said Greg Church, president at Church Capital.

However, stocks can probably drift higher this week as investors show caution ahead of the Federal Reserve policy meeting next week.

"We had some good tech earnings today, but some forecasts weren't as good," Church said. "We have a Fed meeting coming up and I think people are looking for a cut. The bulls are hanging their hats on that."

However, after cutting a key short-term interest rate by a half-percentage point last month, the Fed could pass on cutting rates next week. Should that happen, stocks could start that bigger pullback off the recent highs, he said.

After the close Monday, Apple (Charts, Fortune 500) reported sales and earnings that rose from a year earlier and beat estimates. Shares jumped 6 percent Tuesday.

American Express (Charts, Fortune 500) also reported sales and earnings that topped estimates after the close Monday, sending shares higher Tuesday.

DuPont (Charts, Fortune 500) reported higher quarterly earnings Tuesday that topped estimates and lifted its 2007 profit outlook. Shares were little changed.

Dow stock AT&T (Charts, Fortune 500) reported earnings that were in line with forecasts on revenue that beat forecasts, sending shares higher.

But not all the corporate news was so positive. On the downside, Texas Instruments (Charts, Fortune 500) warned that fourth-quarter revenue won't meet forecasts, sending shares lower, despite the company's strong third-quarter earnings.

Level 3 Communications (Charts, Fortune 500) slumped 18 percent in active Nasdaq trade after reporting a wider third-quarter loss versus a year earlier, that nonetheless was narrower than analysts were expecting, on an earnings-per-share basis. The seller of broadband and dial-up Internet services also cut its fiscal 2007 and 2008 outlook.

Coach (Charts) tumbled 11 percent after issuing 2008 profit guidance that is short of estimates, overshadowing the company's stronger third-quarter results.

With 31 percent of the S&P 500 having reported results, earnings are currently on track to have fallen 0.1 percent from the same 2006 period, according to the latest figures from Thomson Financial. That's a blended figure, combining reported and expected earnings.

U.S. light crude oil for December delivery fell for a second session in a row, losing 77 cents to $85.25 a barrel, not far from an all-time high of $90.07 hit last week in electronic trading.

COMEX gold for December delivery rose $1 to $761 an ounce.

Treasury prices rose slightly, with the yield on the benchmark 10-year note at 4.41 percent, little changed from late Monday. Bond prices and yields move in opposite directions.

In currency trading, the dollar fell versus the euro and gained against the yen.