Dow, S&P 500 close up; Nasdaq down

After a day of fluttering fluctuations Wednesday, the Dow and Standard & Poor's closed up narrowly and the Nasdaq was down as investors dealt with mixed forecasts about how the fragile economy and rising costs will affect company growth.

The Dow Jones industrial average was up 4.28 points, or 0.04 percent, at 11,410.2. It had been up as much as 120 points around 10:30 a.m. The S&P 500 was up 1.1 points, or 0.09 percent, at 1,193.9, and the Nasdaq composite fell 12 points, or 0.47 percent, to 2,511.5.

Boosting stocks initially, Target Corp., Staples Inc. and Dell Inc. all reported earnings for last quarter that were above analysts' forecasts. However, Dell cut its prediction for revenue growth this year.

Companies in the Standard & Poor's 500 are on track to report higher profits for a ninth straight quarter.

But economic growth is weak around the world, and some economists worry that could trigger a second recession, and investors fear that could hurt companies' future earnings. The price of gold also rose, a sign that investors are looking for comfort in economic uncertainty.

"Is gold the next bubble?" asks Bill DiRocco, a golf company manager in Overland Park, Kan., who shifted 10 percent of his portfolio earlier this year into an investment fund that tracks the price of gold. He stopped buying because the price kept rising.

In October 2007, it sold for about $740 an ounce. A little over a year later, it had risen above $1,000 for the first time. This past March, it began rocketing up. On Wednesday, it traded at $1,795 an ounce, just shy of last week's record of $1,801.

"There are a whole bunch of contradictory signals in the system now, and it's hard to tell which way to go," said Charlie Smith, chief investment officer of Fort Pitt Capital Group, which has slightly more than $1 billion in assets under management.

Investors are still worried about Europe. Some countries have borrowed so much that they may not be able to repay their bonds, and economic growth there has slowed. Concerns about a possible default by a European country have dominated the market in recent weeks, along with worries about the slow U.S. economy.

The increased role of automated trading by computers has increased volatility and made investing more difficult.

"When you get a piece of news, it's almost like the machines are trying to out-quick each other," and they are sending stocks in straight lines up or down, Smith said. "That's what really scares retail investors."

Companies are also feeling more pressure on costs. Higher food prices helped push inflation at the wholesale level to 0.2 percent in July, according to a government report Wednesday. That compares with a 0.4 percent drop in June, but is still well below inflation levels earlier this year when violence in the Middle East forced up oil prices. In February, wholesale prices rose 1.5 percent.

Stocks have been particularly volatile in August on U.S. debt default fears.

Worries rose early in the month during a congressional battle over raising the debt ceiling when factions within the Republican party voiced support for default. President Barack Obama had asked for the debt ceiling vote to be free of extra legislation so the country's credit reputation would not be harmed. At the last minute, a deal was worked out and the ceiling raised, but the partisan attacks took a toll when rating company Standard & Poor's downgraded the U.S. credit rating on Aug. 5 by one notch to AA+ from the top AAA rating.

The downgrade triggered one of Wall Street's wildest weeks. The Dow rose or fell by at least 400 points in each of the first four days of last week, the first time that has happened. At one point it closed down 600 points.

Markets appear to have calmed somewhat since then. Tuesday marked the first time since the Aug. 5 downgrade that the Dow rose or fell by fewer than 100 points. It fell 76 points on worries about Europe's ability to contain its debt problems.