Uneasy markets end day higher

NEW YORK - Wall Street managed an advance the hard way -- zigzagging on a mix of earnings and economic news before closing moderately higher.

The major indexes changed course several times in Monday's session, rising in response to Pfizer Incorporated's $68 billion planned acquisition of Wyeth, a deal that reassured investors that mergers could still occur in a recession.

And the National Association of Realtors said sales of existing homes rose rather than fell in December, stirring hopes that lower prices and falling interest rates are starting to erase at a glut of homes with "for sale" signs.

But news from big companies weighed on the market. Downbeat comments from Caterpillar Inc. about the health of its business curbed the advance in the Dow Jones industrials.

Caterpillar shares dropped more than 8 percent after the maker of heavy equipment said plunging commodity prices left the company "whipsawed" in the fourth quarter. Caterpillar said it would offer buyouts to 25,000 U.S. employees and cut executive pay.

Home Depot Inc., another Dow component, said it would slash 7,000 jobs and close its smaller Expo chain as it struggles with the weak housing market. Its Home Depot stores will remain open.

Volatility predicted

Analysts expected that with earnings reports flooding in, the market would have a hard time sorting through all the data and settling on a direction. They're also expecting more volatility as reports continue over the next two to three weeks.

The Dow rose 38.47, or 0.48 percent, to 8,116.03, after briefly moving into negative territory. Monday's advance was just the sixth for the Dow this month.

The Standard & Poor's 500 index rose 4.62, or 0.56 percent, to 836.57, and the Nasdaq composite index rose 12.17, or 0.82 percent, to 1,489.46.

Light, sweet crude slipped 74 cents to settle at $45.73 on the New York Mercantile Exchange.

ASSOCIATED PRESS