The Dow Jones Industrial Average inched up 4.28 points, or 0.04%, at 11410.21, after gaining 124 points early in the session. The Standard & Poor's 500-stock index gained 1.13 points, or 0.09%, to 1193.89, while the Nasdaq Composite fell 11.97 points, or 0.47%, to 2511.48.
Pulling on the upside were stocks in the most defensive sectors: telecommunications, utilities and consumer staples. Verizon Communications gained 2.1%, AT&T added 1.3%, and Coca-Cola rose 1.6%.
The strength in utilities stocks "is a sign of people looking for yield and safety," added Russell Croft, co-manager of the Croft Value fund. Underscoring that point, Treasurys found a strong bid, with the yield on the benchmark 10-year note falling to 2.170%. "The 2008 and 2009 selloff is still fresh in people's heads, and a week like last week didn't make people feel any better," Mr. Croft said.
Leading the decliners were technology stocks. Hewlett-Packard fell 3.7% to lead the Dow laggards, after rival Dell tumbled 10%. Investors dumped shares in computer maker Dell after it reported slowing sales and lowered its full-year revenue target. Dell said it expected revenue to climb 1% to 5% for the year, lower than its previous range of 5% to 9%, as it faces a challenging sales environment.
Other tech giants fell, with Cisco Systems down 0.9%, Intel off 0.6%, and Microsoft shedding 0.4%.
"I don't believe we're going into recession, which helps on the downside, but there's very little visibility on the upside--how are we going to get growth?" said Morris Mark, president of Mark Asset Management. "Europe may not get much worse, but it's not likely to get much better, and the failure to come up with a grand bargain in Washington leaves us with no growth policy until the election next year. When you look at growth coming out of any policy, it doesn't seem to be there."
Retail stocks were in focus Wednesday, after a batch of high-profile names reported earnings.
Target rose 2.4% after its quarterly earnings report topped estimates, driven by same-store sales growth. The retailer's full-year earnings forecast was also stronger than expectations.
Staples edged up 0.5% after it reported second-quarter profit that topped forecasts, boosted by an increase in international sales and a rosy full-year forecast.
Abercrombie & Fitch fell 8.7% as rising costs from increased raw-material costs cut into profit margins, though fiscal-second-quarter earnings rose 64% amid rising sales at the teen-apparel retailer. "Costing pressures will be greater in the second half of the year, and macroeconomic uncertainty has increased," its chairman and chief executive, Mike Jeffries, said.
Deere slipped 1.2% after fiscal third-quarter earnings rose 15% on an increase in farm-equipment sales, sharply lower than in recent quarters but still above expectations.
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