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Disappointing results from Amazon.com Inc. and a weak profit outlook from Boeing Co. prompted the stocks to end lower. However, a Federal Reserve survey on the economy kept investor hopes alive that the central bank may stop raising interest rates soon.

Today, the Dow Jones industrial average closed down 1.2 or 0.01% to 11,106.20, the broader Standard & Poor’s 500 index closed down 0.48 or 0.04% to 1,268.43, and the Nasdaq composite index closed down 3.44 or 0.17% to 2,070.46.

Market breadth turned positive after being negative through the morning. On the New York Stock Exchange, winners beat losers by a margin of 9 to 7 on volume of 1.4 billion shares. On the Nasdaq, advancers edged out decliners 16 to 13 as 1.7 billion shares changed hands.

This daily volatility is a trend that is likely to continue over the next couple of months until the Federal Reserve offers a clearer outlook on the economy and interest rates. The Federal Reserve, in its Beige Book read on the economy, said it saw signs of a slowdown in some regional markets but that the overall economy grew in the June through mid-July period. It is evident that upward pressure from energy and other inputs is persisting, despite reports that the pace of growth in the U.S. economy has slowed. Monetary policy makers are worried that the stubbornly high energy prices will spill over into a more general increase in prices unless interest rates are raised further.

Shares in Black & Decker fell $5.22 or 6.8% at $71.15 after the power tool manufacturer missed Wall Street profit targets for the second quarter and forecast lower earnings for the third amid rising commodity costs and disappointing orders. It reported that the net profit rose 0.9% to $152.2 million, while sales slipped 0.1% to almost $1.7 billion.

Stock of General Motors closed up $1.39 or 5.5% to $32.05, as it reported a large operating profit and made money from its core auto operations for the first time since 2004. The company reported a net loss of $3.2 billion, due to charges it took to trim staff using buyouts and early retirement bonuses, as well as loss related to the pending sale of 51% of GMAC. It also reported income excluding special items of $1.2 billion, compared to the loss of $231 million in the year earlier period.

Shares of Amazon closed down 21.8% to $26.26 after the online retail pioneer posted sharply lower second quarter profit. The company has been hurt by the cost of employee stock options and higher operating expenses.

Boeing tumbled $3.77 or 4.6% to $79.90, after reporting a quarterly loss versus a year ago that was nonetheless in line with estimates. The aerospace giant also lowered its 2006 EPS forecast, although it increased its outlook for 2007. It reported a second quarter loss of $160 million, compared with a year-ago profit of $566 million.

Shares of Corning closed down $3.10 or 12% to $18.55, after reporting quarterly earnings that rose and beat estimates. While revenue rose from a year ago, it missed analysts’ estimates. Additionally, the company has also forecast third-quarter earnings and sales that are shy of current expectations.

Shares of GlaxoSmithKline slipped 1.5% to $56.04. The company reported a 14% profit improvement to $2.45 billion, with revenue up 11% to 5.81 billion pounds. The rise was helped by sales of diabetes and asthma drugs.

Stock of Hewlett Packard closed up $0.43 or 2% to $31.76, after it announced that it would buy Mercury Interactive, a software and business services firm in a bid to expand the computer maker’s business software operations. The deal is for about $4.5 billion in stock, or $52 per share.

U.S. light crude oil for September delivery rose 19 cents to settle at $73.94 a barrel on the New York Mercantile Exchange after the government’s weekly oil inventory report showed a bigger-than expected decline in U.S. gasoline inventories.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter
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