* Wall St little changed as bank results offset Apple
* U.S. dollar rises against euro as risk rally fades
* Oil above $65 after EIA says U.S. crude stocks fell
* Bonds retreat as supply looms after Bernanke rally
(Updates with U.S. markets activity, changes byline, dateline;
previous LONDON)
By Herbert Lash
NEW YORK, July 22 (Reuters) - U.S. stocks seesawed on
Wednesday as poor quarterly banking results offset a robust
earnings report from Apple, while crude oil pared losses after
a U.S. government report said inventories fell last week.
Both Britain's leading stock index and European shares
closed higher for an eighth straight session, boosted by
pharmaceutical stocks, but the gains were slim as investors
questioned how long the rally can be sustained.
The U.S. dollar drifted lower after some encouraging
remarks about the U.S. economy by Federal Reserve Chairman
Benjamin Bernanke, while stronger U.S. housing prices offset a
raft of weak bank results.
The rise in European shares as measured by the pan-European
FTSEurofirst 300 <> index of top regional companies
marked its longest winning streak since December 2006.
"Markets have been a little undecided today, showing that
the rally may not be guaranteed to continue," said Jimmy Yates,
head of equities at CMC Markets.
"Further highlighting the changing mood were the stocks in
focus as investors went to the defensive stocks for
protection," Yates said.
Drugmakers added the most points to the European index
after three of the world's biggest drugmakers posted quarterly
earnings that beat expectations and gave bullish forecasts for
the rest of the year.
The earnings demonstrated the industry's resilience in a
weak economy. The results from the top two drugmakers -- Pfizer
Inc <PFE.N> and GlaxoSmithKline <GSK.L> -- and Eli Lilly and Co
<LLY.N> follow an upbeat report this week from another industry
titan, Merck & Co <MRK.N>.
The FTSEurofirst 300 <> index ended up 0.2 percent at
890.05, its highest close since early January.
At 1 p.m. (1700 GMT), the Dow Jones industrial average
<> was up 13.91 points, or 0.16 percent, at 8,929.85. The
Standard & Poor's 500 Index <.SPX> was up 3.68 points, or 0.39
percent, at 958.26. The Nasdaq Composite Index <> was up
14.27 points, or 0.74 percent, at 1,930.47.
At least nine brokerages raised their price target on Apple
Inc <AAPL.O> a day after the iPhone maker's quarterly results
smashed Wall Street forecasts on strong sales of Macs and
iPhones and higher-than-expected gross margins. For more see
[].
But several major U.S. banks, led by Wells Fargo & Co
<WFC.N>, said the troubled economy drove credit losses higher,
reducing profitability in the second quarter. []
Rising loan losses also reduced earnings at U.S. Bancorp
<USB.N>, SunTrust Banks Inc <STI.N> and KeyCorp <KEY.N>.
Also Morgan Stanley <MS.N> reported a third straight
quarterly loss, falling further behind rival Goldman Sachs as
fixed income and asset management results disappointed.
[]
Oil pared most of its earlier losses to trade above $65 a
barrel. U.S. light sweet crude oil <CLc1> was off 38 cents at
$65.23 a barrel.
U.S. crude stocks fell by 1.8 million barrels, the Energy
Information Administration said. Prices were down earlier in
the session because the American Petroleum Institute on Tuesday
reported a 3.1 million-barrel increase.
Bernanke delivered similar remarks before the U.S. Senate
Banking Committee as he had to the U.S. House Financial
Services Committee on Tuesday, saying he sees positive signs in
the housing market.
His comments seemed in line with data showing U.S. home
prices were up 0.9 percent in May from the previous month
[]. This helped increase risk appetite, boosting
currencies viewed as higher risk such as the euro.
The euro <EUR=> was up 0.17 percent at $1.4235, while the
dollar was down against a basket of major currencies, with the
U.S. Dollar Index <.DXY> off 0.32 percent at 78.673.
Against the yen, the dollar <JPY=> was down 0.01 percent
at 93.67.
U.S. Treasuries fell as investors took profits after the
previous day's gains inspired by Bernanke's all-clear on the
inflation front, and prepared for a looming wave of bond
supply. []
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 9/32 in price to yield 3.52 percent. The 2-year U.S.
Treasury note <US2YT=RR> was down 1/32 in price to yield 0.94
percent.
Spot gold prices <XAU=> rose $4.75 to $952.90 an ounce.
The MSCI index of Asia-Pacific shares outside Japan
<.MIAPJ0000PUS> edged up 0.5 percent to its highest level since
late September before slipping to be down 0.3 percent. Japan's
Nikkei <> gained 0.7 percent.
(Reporting by Rodrigo Campos, Burton Frierson and Gertrude
Chavez-Dreyfuss in New York and Joanne Frearson, Christopher
Johnson and Alex Lawler in London; Writing by Herbert Lash;
Editing by James Dalgleish)
