Indexes End on Upswing After Volatile Session

Stocks got a late afternoon lift Wednesday afternoon, as bargain hunting trumped low confidence ahead of the start of earnings season.

Investors failed to find much hope in domestic economic prospects or global responses to the slowdown, but pushed two major indexes into positive territory in the last 30 minutes of trading. Dow component Alcoa (AA) reported after the close, losing a less than expected 26 cents a share before items, signaling the unofficial start of second-quarter earnings season. It was the aluminum maker's third consecutive quarterly loss.

The Group of Eight summit in Italy became the Group of Seven, following Chinese President Hu Jintao's departure to address ethnic and religious unrest in the heavily Muslim western region of his country. The remaining global leaders continued to differ on approaches to handling a global economic slowdown. After a day of swings on the declining side, the Dow Jones Industrial Average closed up 15 points at 8178. The Nasdaq eked out a 1-point gain to close at 1747 and the S&P 500 dipped 1 point to finish at 880.

Family Dollar Stores (FDO) beat Wall Street earnings estimates for a sharp early rise, news that indicates households remain budget conscious and that a recovery may remain tepid thanks to low consumer spending and declining availability of credit. 

The Tuesday bankruptcy filing of auto parts maker Lear spotlighted the fallout from the nation's faltering automakers. American Axle & Manufacturing (AXL) shares slid below $2, continuing a week of daily double-digit percentage declines.

The fate of the dollar as the world's reserve currency remained a hot topic among G-8 summit participants. Negative economic news from Japan also contributed to the downturn. The country's current account surplus fell 34.2% in May from the same month a year ago, and the trade surplus fell 22.1%, according to data released by the Japanese Ministry of Finance Wednesday. Separate data from the Cabinet Office showed core machinery orders fell 3.0% in May from April. Both sets of data suggest the global recession has not waned.

Oil prices continued their decline as pessimism about the economic recovery deepened. Crude stayed lower at $60.18 in afternoon trading on the Nymex after a $2.79 drop in the Wednesday session.