Stocks edge up in erratic trade

NEW YORK - Stocks ended another erratic session mostly higher yesterday as investors, waiting for the Federal Reserve's next move to steady the markets, made few big commitments to equities.

The Fed has taken a number of steps to prop up the nation's financial institutions ahead of its scheduled Sept. 18 meeting, including injecting more liquidity into the banking industry and cutting the discount rate. But many on Wall Street want the Fed to do more, including lowering the more important federal funds rate, and to do it before next month's meeting.

The 30-stock Dow Jones industrial average fell 30.49, or 0.23 percent, to 13,090.86 after moving in and out of positive territory throughout the day.

Broader market indexes were slightly higher. The Standard & Poor's 500 index rose 1.57, or 0.11 percent, to 1,447.12, and the Nasdaq composite index rose 12.71, or 0.51 percent, to 2,521.30. The Russell 2000 index of smaller companies added 0.93, or 0.12 percent, to 788.38.

Bonds continued to rally as more investors moved money from stocks to the haven of the Treasury market. The yield on the benchmark 10-year Treasury note fell to 4.59 percent from 4.63 percent late Monday. Bond prices move in the opposite direction from yields.

Trading also reflected speculation that the global credit crunch is nowhere near over. Countrywide Financial Corp. was said to be a takeover target because of losses linked to distressed subprime mortgages. And investors expected more layoffs after Capital One Financial Corp. said it was shuttering its GreenPoint Mortgage unit and slashing 1,900 jobs.

Capital One shares rose $1.75, or 2.6 percent, to $68.47; Countrywide spiked $1.98, or 10 percent, to $21.79.

With no major economic reports scheduled, investors pored over a number of earnings reports from retailers to gauge the health of consumer spending. However, the reports failed to give the market direction.

BJ's Wholesale Club Inc. reported that second-quarter profit rose 37 percent, surpassing projections. Its shares rose 92 cents, or 3 percent, to $31.71.

Target Corp. rose $1.01, to $60.10, after it reported profit had grown 13 percent. The discount retailer expressed caution on the rest of the year.

Staples Inc., the largest U.S. office-supplies retailer, reported a higher quarterly profit yesterday, matching Wall Street projections. However, it issued a cautious forecast for the rest of the year. The stock fell 1 cent to settle at $23.30.

Overseas, Britain's FTSE 100 rose 0.12 percent, Germany's DAX index rose 0.23 percent, and France's CAC-40 rose 0.36 percent. Hong Kong's Hang Seng Index rose 0.62 percent.

China's central bank said yesterday that it would raise its benchmark lending and deposit rates to curb inflation. The often-volatile Shanghai Composite Index rose 1.03 percent.