By Jonathan Cheng U.S. stocks bobbed in and out of positive territory as investors continued to track developments on Europe's debt crisis. The Dow Jones Industrial Average gained 34 points, or 0.3%, to 11224 in midday trading. The Standard & Poor's 500-stock index was flat at 1177, while the Nasdaq Composite was off two points, or 0.1%, to 2545. If stocks can finish with gains, they will extend the recent winning streak to four days, though some bulls have been discouraged by the market's inability to hold gains throughout the trading day. Wednesday morning, the Dow gave up gains of more than 125 points before bouncing back. The moves came on a day when Finland voted to approve changes to the euro-zone bailout fund, after leaders raised concerns earlier this month that they would demand collateral as a precondition for participation. Germany votes on the changes Thursday. The changes need to be approved by all 17 euro-zone members to take effect. "The market gets pumped up on hope, and then it gets the rug pulled out from under it," said Keith Springer, president of Springer Financial Advisors. "We're all hoping that the European leaders can create a backstop here, but we all know that the backstop is just short term. They're just kicking the can down the road." Italy's business confidence index plummeted in September in response to slowing global demand and after the government announced tax-heavy austerity measures to fix public finances, with the reading suffering its biggest monthly drop since the fall of 2008. Stocks in Europe finished near the lows of the day. The Stoxx Europe 600 fell 1.1%, while the French CAC-40 index lost 0.9%. Asian bourses were mixed, with Japan's Nikkei Stock Average edging up 0.1% but China's Shanghai Composite shedding 1%. "This is not a market that has a lot of conviction," said Howard Ward, chief investment officer for the Gamco Growth Fund. "When you look at the numbers on retail outflows from equity funds, we can see the little guy has pulled his money from stocks. He's not waiting around for fear of the bottom falling out of this market." With markets as volatile as they have been, "the biggest threat to the economy is financial markets themselves. This market beats people up too much," Mr. Ward said. "That kind of volatility is not welcomed by most investors." Dragging on the downside Wednesday were materials stocks. Alcoa fell 2.5% to lead the Dow decliners as the prices of some commodities faltered. Alpha Natural Resources and Cliffs Natural Resources were the biggest losers on the S&P 500, dropping 8% and 6.9% respectively. Copper prices dropped more than 5%, while crude oil fell 2.4% to below $83 a barrel. Gold futures slipped to about $1,630 an ounce. Pulling on the upside were relatively defensive stocks, led by telecommunications and utilities stocks. AT&T and Verizon Communications gained 1% each. Amazon.com climbed 4.9% after the online retailer unveiled its Kindle Fire tablet, which is to compete with Apple's iPad. Apple added 0.6%, while Barnes & Noble, which owns the Nook e-reader that competes with another version of the Kindle, tumbled 13%. In economic headlines, durable-goods orders during August slipped 0.1%, the second drop in three months as manufacturers struggled with the tough economy, disappointing hopes for a 0.2% rise. The drop followed a 4.1% surge in July and a 1.1% decline during June. The number of mortgage applications filed in the U.S. last week rose 9.3% from the prior week, as interest rates continued to slide following the Federal Reserve's latest stimulus measure. Refinance activity climbed 11%. The dollar fell against the euro and the yen, while the yield on the 10-year Treasury rose to 2.0546%. Among other stocks, Jabil Circuit surged 8.7% to lead S&P 500 components after the electronics contract manufacturer reported a big gain in profit and issued a stronger-than-expected forecast. Family Dollar Stores slipped 0.1% after the discount retailer approved the buyback of up to $250 million of its common stock. Accenture gained 2.7% after the outsourcing and consulting company topped earnings and revenue estimates and providing a favorable outlook. Paychex rose 1.9% after the payroll services company topped fiscal first-quarter earnings and revenue estimates, and affirmed its full-year outlook.
