Dow clings to 10,000; oil tops $78

Updated: 3:45 p.m. ET.

 

This is one of those days that has to drive market bears completely crazy.

 

They've been screaming that the market has risen to ridiculous levels. A big sell-off is coming.

 

They get disappointing results from General Electric (GE) and Bank of America (BAC) -- not to mention IBM (IBM) -- and the Dow Jones industrials ($INDU) promptly drop 123 points to 9,940 by 10 a.m. ET. 

 

And then the buyers come back in and cut the Dow's loss to less than 60 points. The Dow even regained 10,000, standing at 10,001.73, a loss of just 61 points, by 3:15 p.m. ET.

 

The Standard & Poor's 500 Index ($INX) was off 8 points to 1,089, and the Nasdaq Composite Index ($COMPX) was at 2,159, down 14 points.

 

What happened? Crude oil jumped 94 cents to $78.53 a barrel, erasing a modest pullback from Thursday, and energy stocks moved up from early losses. The rest of the market followed.

 

In other words, there is support in the market: buyers who wait for dips. And when they get dips, they buy.

 

To be sure, the market rally since March 9 has been huge: nearly 53% for the Dow, 61% for the S&P 500 and 70% for the Nasdaq.

 

And there is every reason to question how much higher the U.S. stock market can rise without demonstrable improvements in the economy, in the health of the American consumer and in corporate profits.

 

And the results from GE -- especially its financial-services business -- and Bank of America today and Citigroup (C) earlier this week  suggest that consumer and corporate health is not all that great yet. GE was off 4.1% to $16.11. Bank of America was down 4.2% to $17.34.

 

Which brings us to IBM. The stock is off 4.7% to $122 this afternoon because revenue fell while earnings improved. But the Street wants to see revenue growth along with earnings gains.

 

And because of how the Dow is calculated, IBM's stock price decline is contributing more than half of the Dow's loss by itself.

 

Bank of America lost $1 billion, or 26 cents per share. That was down from net income of $1.18 billion, or 15 cents per share, last year and worse than Wall Street's expectation of a loss of 21 cents per share.

 

Losses on home lending and insurance widened to $1.6 billion from $724 million, and credit card losses grew to $1.04 billion from $167 million.

 

Bank of America said it took $2.6 billion in write-downs and a $402 million charge to pay the U.S. government to end its asset-guarantee term sheet.

 

Its provision for credit losses was $11.7 billion, nearly double the $6.45 billion last year, but $1.7 billion lower than the second quarter.

 

GE said third-quarter net income fell 44% to $2.4 billion, or 23 cents per share, from $4.3 billion, or 43 cents per share, last year.

 

Excluding one-time charges, GE earned 28 cents per share in the quarter, better than analysts' expectations of 20 cents per share.

 

Sales fell 20% to $37.8 billion, missing Wall Street's estimate of $39.5 billion.

 

Profit at GE Capital, the company's financial arm, plunged 87% to $263 million. And that was helped by a tax benefit.

 

IBM said third-quarter profit rose 14% to $3.2 billion, or $2.40 per share. Revenue fell to $23.6 billion from $25.3 billion in the same period last year. Analysts were expecting $2.38 per share on $23.86 billion in sales.

 

All was not bad in the markets. Google's (GOOG) strong results, reported late Thursday, helped the stock gain 4.2% to $552.04. It was the best performer among stocks in the Nasdaq-100 Index ($NDX.X). The index was down 12 points to 1,741. 

 

But Apple, which reports fiscal-fourth-quarter earnings after Monday's close, was down 0.9% to $188.83.

 

Elizabeth Strott contributed to this report.