NEW YORK — Wall Street managed an advance the hard way Monday — zigzagging on a mix of earnings and economic news before closing moderately higher.
The major indexes changed course several times in the session, rising in response to Pfizer’s $68 billion planned acquisition of Wyeth, a deal that reassured investors that mergers could still take place in a recession.
And the National Association of Realtors said home resales rose rather than fell in December, stirring hopes that lower prices and falling interest rates are starting to erode a glut of homes with “for sale” signs.
But news from big companies weighed on the market.
Downbeat comments from Caterpillar about the health of its business curbed the advance in the Dow Jones industrials. Caterpillar shares dropped more than 8 percent after the maker of heavy equipment said plunging commodity prices left the company “whipsawed” in the fourth quarter. Caterpillar said it would offer buyouts to 25,000 employees in the U.S. and cut executive pay.
Home Depot, another Dow component, also announced big job cuts. The company said it would slash 7,000 jobs and close its smaller Expo chain as it struggles with the weak housing market.
Analysts expected that with earnings reports flooding in, the market would have a hard time sorting through all the data and settling on a direction. They also expect more volatility as reports continue over the next two to three weeks.
The Dow rose 38.47,or 0.48 percent, to 8,116.03, after briefly moving into negative territory. Monday’s advance was just the sixth for the Dow this month; after a late-year rally, the market has again been torn by volatility as investors worry about the economy, earnings and the health of the banking industry.
The Standard & Poor’s 500 index rose 4.62, or 0.56 percent, to 836.57, and the Nasdaq composite index rose 12.17, or 0.82 percent, to 1,489.46.
The Russell 2000 index of smaller companies rose 5.70, or 1.28 percent, to 450.06.
Senate committees are scheduled to take up a stimulus plan today, and the full House is expected to vote on its version of the $825 billion package Wednesday. The plan could include big tax cuts and a massive public- works program.
“They know things aren’t going to get any better soon but want to see what this package is going to look like,” Doug Roberts, chief investment strategist at Channel Capital Research, said of investors.
Meanwhile, earnings are likely to make the next few weeks rocky.
“It’s almost like a teeter-totter right now,” said Alan Lancz, money manager at Alan B. Lancz & Associates. “Earnings season is always treacherous in this kind of global economic environment with all the uncertainty.”
