(Updates to early afternoon)
By Kristina Cooke
NEW YORK, Jan 16 (Reuters) -U.S. stocks fell in choppy trade
on Wednesday, as pessimism about the U.S. economy mounted after
Intel Corp <INTC.O>, the world's largest chip maker, posted
earnings and a profit forecast that disappointed investors.
But JPMorgan Chase & Co <JPM.N>, the No. 3 U.S. bank,
provided comparative relief from the gloom cast by Citigroup's
record quarterly loss on Tuesday, and lent support to the Dow.
JP Morgan's results suggested some banks can still make a
profit despite turmoil in the credit market. A
smaller-than-expected profit decline by Wells Fargo & Co
<WFC.N>, the No 2. U.S. mortgage lender, also helped the
financial sector.
But semiconductors, computer hardware and software shares
were among the worst drags following Intel's results. Intel
microprocessors are the computing engines of about 80 percent
of the world's personal computers.
"The Intel numbers weren't good, and we had such bad
selling yesterday on economic concerns, so its reassuring we're
not down more," said Paul Nolte, director of investments at
Hinsdale Associates, in Hinsdale Illinois. "JP Morgan's numbers
were OK, so that's helping financials and mitigating at least
some of the worst concerns about credit issues."
The Dow Jones industrial average <> was down 10.16
points, or 0.08 percent, at 12,490.95. The Standard & Poor's
500 Index <.SPX> was down 5.82 points, or 0.42 percent, at
1,375.13. The Nasdaq Composite Index <> was down 23.59
points, or 0.98 percent, at 2,394.00.
On the economic front, U.S. shoppers faced moderate price
rises in December, but that capped a year in which prices
soared at the sharpest rate in 17 years, pressuring households
also dealing with a steep housing downturn and tighter credit.
The Labor Department said its Consumer Price Index rose 0.3
percent in December, down from November's 0.8 percent jump.
The Federal Reserve's Beige Book, which provides an
anecdotal description of economic conditions, is due at 2 p.m.
and could give clues about the Fed's next move on interest
rates.
Shares of Intel dropped 11.9 percent to $19.98 on the
Nasdaq. Other major tech shares trading sharply lower were
Apple Inc <AAPL.O>, down 5 percent to $160.51, and Blackberry
maker Research in Motion Ltd <RIM.TO><RIMM.O>, down 2.7 percent
to $88.42.
Energy stocks were another big drag on the market after
crude oil futures <CLc1> fell. Shares of Devon Energy Corp
<DVN.N> fell 3.5 percent to $84.27, and oil field services
company Schlumberger Ltd <SLB.N> fell 4.3 percent to $85.07.
JPMorgan shares rose 6.8 percent at $41.85. Wells Fargo
fell 2.7 percent to $27.20.
(Editing by Kenneth Barry)
