(Updates to afternoon, changes byline)
By Caroline Valetkevitch
NEW YORK, April 17 (Reuters) - The Dow average inched
higher on Thursday afternoon, but the S&P 500 and the Nasdaq
dipped as earnings from Pfizer <PFE.N> and cautious outlooks
from eBay Inc <EBAY.O> and United Technologies Corp <UTX.N>
offset stronger-than-expected results from IBM <IBM.N>.
The S&P 500 and the Nasdaq were only slightly lower, even
after all three major indexes rose sharply on Wednesday, when
investors saw reassuring results from Intel Corp <INTC.O> and
JPMorgan Chase & Co <JPM.N>.
Adding to negative sentiment was a report from the Federal
Reserve Bank of Philadelphia showing that factory activity in
the mid-Atlantic region contracted for a fifth straight month
in April. For details, see [].
"The market is pretty flat, but that's a big deal because
most market participants would have thought we would have seen
a sell-off after yesterday," said Peter Kenny, managing
director at Knight Equity Markets in Jersey City, New Jersey.
"The market hasn't given anything back, which tells you we
might have further legs to the upside."
Pfizer shares dropped 3.9 percent to $20.28 on the New
York Stock Exchange, while eBay shares slid 4 percent to
$30.84, a drop that ranked the stock among the Nasdaq's worst
performers, along with biotechnology company Gilead Sciences
Inc <GILD.O>, which fell 3.3 percent to $50.08.
The Dow Jones industrial average <> inched up 7.24
points, or 0.06 percent, to 12,626.51. But the Standard &
Poor's 500 Index <.SPX> dipped 0.22 of a point, or 0.02
percent, to 1,364.49. The Nasdaq Composite Index <> fell
9.35 points, or 0.40 percent, to 2,340.76.
International Business Machines Corp, a tech bellwether,
lifted the Dow after the technology services company raised
its 2008 outlook late on Wednesday. IBM's stock rose 2.2
percent to $123.20.
Another bright spot was Merrill Lynch & Co Inc <MER.N>,
whose stock rose 4.8 percent to $47.04 after the investment
bank reported write-downs of $6.5 billion in subprime
mortgages and other risky debt, which met analysts'
expectations.
"Not only is risk associated with this credit meltdown
being managed, but it looks like it might be coming to an
end," Kenny said.
Pfizer shares were among the biggest drags on the Dow and
limited its afternoon gain after the drug maker reported a
larger-than-expected drop in quarterly profit.
Diversified manufacturer United Technologies warned of a
slowing economy, sending its stock down 2.3 percent to $70.97
on the NYSE.
Investors sold some eBay shares after the online
auctioneer said the softening U.S. and UK economies had
modestly slowed demand. [] in afternoon trading,
the stock was the second-heaviest weight on the Nasdaq 100
<>.
Among Thursday's economic reports, the Philadelphia
Federal Reserve Bank's index of business activity, which
covers the Middle Atlantic states, recorded its worst
performance in seven years.
(Additional reporting by Cal Mankowski; Editing by Jan
Paschal)
