Stocks zigzagged Wednesday, but with stocks far higher than they were only a week ago, traders remain hesitant to push much further into the market even on good news.
The day's earnings reports gave reasons for both hope and concern. Apple and Starbucks jumped after beating analysts' estimates but chipmaker Advanced Micro Devices and major bank Wells Fargo fell after reporting disappointing results.
Strong corporate earnings for the April-June quarter have pushed major stock indicators up more than 8% in the past seven days. The surge has restarted a rally that ran from early March through mid-June before stalling on a scarcity of signs that the economy was stabilizing.
The latest gains have pushed the Dow Jones industrial average up enough to erase its losses for the year and to its highest level since January. The benchmark Standard & Poor's 500 index is at levels not seen since November.
Analysts warn that the stock market could have a harder time advancing because investors are now expecting more polished results. Of the approximately 100 companies in the S&P 500 index that have posted results, 62% have topped analysts' expectations, according to S&P.
"As the earnings season goes on it becomes more difficult because the bar goes higher and higher," said John Canally, economist at LPL Financial in Boston.
Major market indexes seesawed much of Tuesday, but managed to end higher. Investors battled worries over rising loan losses at regional banks and a mixed report from Federal Reserve Chairman Ben Bernanke, who cautioned that the economy's recovery will be gradual because of rising unemployment.
Bernanke continued his two-day address to Congress on Wednesday, speaking in front of the Senate Banking Committee. He again warned that high unemployment is "the most pressing issue" as the country tries to dig out from the longest recession since World War II.
Another rush of earnings reports directed trading again Wednesday.
Wells Fargo wfc reported that its earnings jumped 47% in part because of its acquisition of Wachovia, but the company said that losses from bad loans kept rising.
Analysts say worries about deteriorating credit and messy balance sheets are keeping some investors from embracing better-than-expected results from banks.
"Some of these financials reported what seemed like good numbers but it's hard to see through all the smoke with everything that's going on with the banks nowadays," said Terry Morris, senior equity manager at National Penn Investors Trust Co. in Wyomissing, Pa.
Among other results, WhirlpoolWHR, the world's largest maker of major home appliances, said its second-quarter profit dropped 33% on weak consumer demand.
Apple aapl surpassed Wall Street's expectations in both profit and revenue on robust sales of laptops and iPhones.
Starbucks sbux surged after the coffee chain shut stores, laid off workers and cut other costs to produce fiscal third-quarter results that topped expectations.
Bond prices fell, pushing yields higher. The yield on the benchmark 10-year Treasury note rose to 3.52% from 3.48% late Tuesday.
The dollar was mixed, while gold prices fell.
Light, sweet crude fell 5 cents to $65.56 a barrel on the New York Mercantile Exchange.
Overseas, Britain's FTSE 100 rose 0.3%, Germany's DAX index gained 0.5%, and France's CAC-40 added 0.1%. Japan's Nikkei stock average rose 0.7%.