NEW YORK - U.S. stocks were mixed Wednesday, as investors sorted through a batch of earnings reports, including solid results from Caterpillar and Boeing, and a big miss from Apple.
The Dow Jones industrial average rose more than 75 points, or 0.3%, with Caterpillar leading the way. Caterpillar, one of the Dow's most heavily weighted stocks, is closely watched as a gauge for global economic strength. The manufacturing giant beat expectations and raised its outlook for the year.
"Caterpillar's results are a great lense into what's going on in international markets, especially China," said Timothy Ralph, portfolio manager at Bilmore Capital. "A lot of their machinery is being used in real estate projects and other constructinos plans, which is a a positive signs, especially as a follow-up to the recent improvement in Chinese manufacturing data."
Boeing was also a big gainer in the Dow. The airplane maker also topped forecasts and boosted its guidance for the year.
The S&P 500 slid 5 points, or 0.3%. Disappointments from Netflix and TripAdvisor pressured the broad index, but positive results from chipmakers Altera and Broadcom helped limit the losses.
The Nasdaq lost 18 points, or 0.6%, dragged lower by Apple's weak earnings. Apple is the biggest component of the tech-heavy index by far, and shares were down nearly 5%.
"We were disappointed with the results, but think Apple is ultimately an incredible company and expect that a lot of people are just waiting for the iPhone 5 to come out this fall," said Ralph.
Aside from earnings, Europe continues to be a worry for investors, with Spain's borrowing costs skyrocketing, weakening business confidence in Germany, and Greece's creditors taking stock of that nation's progress.
Fears that Spain is moving closer to needing a full-blown bailout -- like those granted to Greece, Ireland and Portugal -- continued to build, with Spain's 10-year yield hitting a new record high of 7.751%.
Also adding to the nervousness, Germany's business confidence index declined for a third straight month in July, hitting the lowest level in more than two years amid Europe's escalating debt crisis.
Treasury Secretary Tim Geithner, testifying before the House Financial Services Committee Wednesday morning, also said that Europes the biggest threat to the U.S. economy.
U.S. stocks fell sharply Tuesday, with the Dow suffering a triple-digit decline for a third session. However, the market recovered some ground just before the closing bell, after a report in The Wall Street Journal suggested the Federal Reserve may be moving toward more simulative monetary policies.
World markets: European stocks were higher in afternoon trading. Britain's FTSE 100 ticked up 0.4%, the DAX in Germany added 0.3% and France's CAC 40 rose 0.6%.
The shares got a lift thanks to comments by European Central Bank policymaker Ewald Nowotny, who said it may be justified to take steps that would boost the firepower of the eurozone's new bailout fund.
Nowotny said that there are some arguments in favor of granting the European Stability Mechanism (ESM) a banking license that would allow it to borrow unlimited money from the ECB.
However, the relief is likely temporary since the comments appear to be "off the cuff and purely a personal opinion, with Nowotny admitting that the issue is not even under discussion at the ECB," said Grant Lewis, head of research at Daiwa Capital Markets in London.
"Such a move remains highly improbable," Lewis added. "Both the German government and the ECB remain implacably opposed to this, arguing that it would be akin to direct central bank deficit financing, something explicitly ruled out by the European Union treaties."
Asian markets ended in the red. The Shanghai Composite lost 0.5%, the Hang Seng in Hong Kong slipped 0.1% and Japan's Nikkei dropped 1.4%.
Economy: A report from the Census Bureau showed that new home sales for June fell 8.4% to an annual rate of 350,000 units from 382,000 in May. Sales were expected to have come in at an annual rate of 373,000 units, according to a survey of economists by Briefing.com.
Companies: Ford's second-quarter profit dropped 57% to $1 billion, hurt by a loss in the company's European operations. Shares of Ford were trading lower.
PepsiCo shares rose after the reported better-than-expected earnings before the opening bell. But, like many global companies, its revenue was hurt by unfavorable currency exchange rates.
Nasdaq, which has been in the spotlight since Facebook's botched market debut in May, also reported results. The exchange operator's revenue and profit rose slightly during the quarter and topped expectations. Shares were higher.
Numbers are due from Visa and Zynga after the bell.
Shares of Symantec jumped after the security software company ousted CEO Enrique Salem, and named chairman Steve Bennett as his replacement.
Currencies and commodities: The dollar fell against the euro, but gained ground
versus the British pound and Japanese yen.
Oil for September delivery fell 12 cents to $88.38 a barrel.
Gold futures for August delivery rose $23.80 to $1,600 an ounce.
Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 1.41% from 1.40% late Tuesday.