Stocks in early struggle

Wall Street manages a mixed start as investors consider Merck's earnings and gear up for auto sales.

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NEW YORK( -- Better-than-expected earnings from Merck gave a lift to the blue chips Tuesday morning, but the broader market was mixed ahead of the release of the January auto sales and pending home sales reports.

The Dow Jones industrial average (INDU) rose 15 points, or 0.1%, in the early going.

The Standard & Poor's 500 (SPX) index was little changed. The Nasdaq composite (COMP) lost 4 points, or 0.2%.

Peter Cardillo, chief market economist for Avalon Partners, said that investors appeared to be reacting to Merck's relatively strong earnings.

Merck (MRK, Fortune 500) reported net income of more than $1.6 billion for the fourth-quarter, compared to a loss in the year-earlier quarter. The drugmaker announced earnings of 78 cents per share, excluding charges related to restructuring. Analysts had expected Merck to report earnings of 74 cents per share, according to a survey from Thomson Reuters. Shares gained 3.3% Tuesday morning.

This follows mixed trading on Monday, when investors were focused on the Senate debate over the $885 billion stimulus package. The debate continues Tuesday.

"The moving factor today, initially, will be earnings and car sales and then, as we move through the rest of the day, the rhetoric out of Washington," said Cardillo.

Corporate results: Dow Chemical (DOW, Fortune 500) reported a loss of $1.55 billion for the fourth quarter, or a loss of $1.68 per share. The company blamed nearly $1 billion in charges stemming from restructuring costs, the impact of Hurricanes Gustav and Ike, and other factors. Shares were little changed.

Motorola (MOT, Fortune 500) reported a fourth-quarter net loss of $3.6 billion, or $1.57 per share, and said it was suspending its dividend. The company said it would cut $1.5 billion in costs this year, and appointed an acting chief financial officer. Shares fell 8.5% in early trading.

UPS (UPS, Fortune 500) reported adjusted diluted earnings of 83 cents per share for the fourth quarter, down 22% from the year-ago quarter. Chief Executive Scott Davis blamed "a severe decline in economic activity around the world" resulting in "sharply lower package and freight volume for UPS." Shares gained 3.5% Tuesday morning.

Economy: The National Association of Realtors' pending home sales index for December is due after the opening bell. Auto sales, which are expected to plunge, are due beginning at midday.

World markets: Stocks closed lower in Asia, despite new measures from the governments of Australia and Japan to boost economic growth. European indexes rose in the afternoon.

Oil and money: Oil prices rose 46 cents a barrel to $40.54 on the New York Mercantile Exchange. The dollar rose versus the yen and the British pound, but fell against the euro. To top of page

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