Stocks struggle in volatile morning
Wall Street seesaws as investors consider Hewlett-Packard's forecast, Congressional hearings on the $700 billion bailout plan and fate of automakers.
NEW YORK (CNNMoney.com) -- Stocks gave up gains, turning lower Tuesday morning, as investors considered Hewlett-Packard's upbeat forecast and Congressional hearings on the bank bailout plan and the fate of the automakers.
The Dow Jones industrial average (INDU) added a few points, with Hewlett-Packard's rally countering the broad weakness.
U.S. stocks were volatile Monday, with the major gauges all ending the session down more than 2%.
The slump sparked losses overseas. Asian markets finished in negative territory and European shares fell in morning trading.
"Hopefully, we can bounce off the lows," said Peter Cardillo, analyst for Avalon Partners.
But Cardillo said the continually weak stock market could have a tough time pulling out of its slump so long as the question of a bailout for the Big Three is left unanswered.
"It's certainly going to give the market the jitters," said Cardillo, referring to the debate over an automaker rescue package.
The hearing came as Congress is debating whether to bail out the hard-hit industry with an additional $25 billion in support on top of the $25 billion the Big Three have already received.
Wall Street bailout: The money for the automakers would come from the $700 billion bank bailout plan, which was also in focus Tuesday as the House Financial Services Committee holds a hearing regarding oversight of the plan.
Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke and FDIC Chairman Sheila Bair were among the speakers scheduled to testify.
Paulson was expected to face tough questions after announcing last week that the reach of plan would be broadened to support non-bank financial institutions that provide consumer credit, such as credit cards and auto loans.
In an interview Monday, Paulson told the Wall Street Journal that the financial system is stabilizing, and that he doesn't plan to use what remains of the rescue fund to launch new programs.
In prepared remarks, Bernanke said the value of the bailout plan in promoting financial stability has already been demonstrated.
Home Depot: In another sign of consumer weakness and an abysmal housing market, home improvement retail giant Home Depot (HD, Fortune 500) said its third-quarter profit fell by nearly one third, to $756 million, or 45 cents per share, from nearly $1.1 billion, or 60 cents per share, during the same period in 2007.
The company still managed to beat expectations. Analysts had expected a profit of 38 cents per share, according to a consensus of projections from Thomson Reuters.
The medical device maker Medtronic (MDT, Fortune 500) reported that profit fell in its most recent quarter to $571 million, or 51 cents per share, from $666 million, or 58 cents per share, in the year-ago quarter. The company blamed a charge from a patent dispute with Johnson & Johnson (JNJ, Fortune 500) for the fall in profit.
Yahoo: Jerry Yang is stepping down as chief executive of Yahoo (YHOO, Fortune 500), the company said late Monday. The company said a search for a new CEO is being led by its chairman, Roy Bostock, and the executive recruitment firm Heidrick & Struggles.
Deflation: The Labor Department released its monthly Producer Price Index, which showed that the wholesale price of goods fell 2.8% in October, a record drop that was steeper than expected.
Prices were expected to decrease by 1.8% in October, according to a consensus of economist projections from Briefing.com, after declining 0.4% in September.
The core PPI, which does not include volatile food and energy prices, increased by 0.4% in October, after increasing 0.4% the prior month. Economists were calling for an increase of only 0.1% in core PPI. Energy prices plunged 12.8% in October.
On Wednesday, the Labor Department will release its monthly report on the Consumer Price Index and the Commerce Department will release its report on housing starts.
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