Stocks slip in early trading after 2-day rally

NEW YORK -- After two big days, it was time for the stock market to take a break.

Investors waiting for corporate earnings reports to start rolling in made only modest moves Wednesday after stocks posted their best two-day gain since mid-July. The Dow Jones industrial average slipped 6 points, while broader indexes edged higher.

With little economic news to direct trading, investors were waiting for earnings reports from the July-September quarter for signals about the economy.

Aluminum maker Alcoa Inc. was the first of the 30 companies that make up the Dow Jones industrials to release its numbers, but the report didn't arrive until after the closing bell. Still, investors were happy with the news that the company was profitable again after three losing quarters, and that revenue and earnings topped expectations. Alcoa stock rose in extended-hours trading.

Investors spent Wednesday not wanting to place big bets amid concerns that revenue and earnings won't justify the enormous gains in stocks in the past seven months. The Standard & Poor's index, the basis for many mutual funds, is up 56.3 percent since hitting a 12-year low in March.

"Investors are holding tight here," said Eric Ross, director of research at Canaccord Adams. "There are people on both sides of the fence. A lot of people think this market is going to keep running and running and then others that are very nervous."

The Dow fell 5.67, or 0.1 percent, to 9,725.58. The S&P 500 index rose 2.86, or 0.3 percent, to 1,057.58, while the Nasdaq composite index rose 6.76, or 0.3 percent, to 2,110.33.

A falling dollar and rising commodity prices helped push stocks higher on Tuesday, adding to the previous day's gains that were spurred by signs of growth in the service industry. The Dow rose 244 points in two days, its best back-to-back advance since July 15-16.

Even with the recent gains, stocks are still down during the past two weeks as labor and manufacturing reports have fallen short of expectations. Analysts expect the earnings reports and forecasts that arrive in the coming weeks to have a big influence on the market's direction through the end of the year.

Many companies beat modest earnings expectations in the second quarter by cutting costs. That helped fuel the market's rally through the summer. Now, investors are hoping to see stronger sales driving earnings, which would signal some steadying in consumer spending. Many analysts remain skeptical.

"The consumer is just really damaged," said Len Blum, a managing partner at Westwood Capital LLC. "Every time we see a blip, it's not sustainable."

Alcoa's shares rose 31 cents, or 2.2 percent, to $14.20 before the company reported results, and it climbed to $15 in after-hours trading.

In other trading, shares of Verisk Analytics Inc. shot up 23.7 percent in their market debut, rising $5.22 to $27.22. The insurance data specialist raised $1.9 billion in one of the year's largest initial public offerings.

Gold ended higher after hitting a new high of $1,049.70 an ounce. Prices rose $4.70 to $1,044.40.

Oil fell $1.31 to settle at $69.57 per barrel on the New York Mercantile Exchange.

Investors have been tracking the dollar, which has fallen this year amid rock-bottom interest rates and massive government spending. A weak dollar is good for profits of companies with a strong global operations because it encourages overseas customers to buy U.S. goods and services. Over the long term, however, it could trigger inflation.

Bond prices rose after an auction of 10-year notes drew strong demand. That pushed down the yield on the 10-year Treasury note to 3.19 percent from 3.26 percent late Tuesday.

Advancing stocks narrowly outpaced those that fell on the New York Stock Exchange, where consolidated volume came to 4.3 billion shares compared with 5.1 billion Tuesday.

The Russell 2000 index of smaller companies rose 0.10, or less than 0.1 percent, to 602.08.

Britain's FTSE 100 fell 0.6 percent, Germany's DAX index slipped 0.3 percent, and France's CAC-40 lost 0.4 percent. Japan's Nikkei stock average rose 1.1 percent.