US Markets

U.S. stocks closed lower Wednesday as investors traded cautiously a day after the Dow Jones Industrial Average notched its biggest advance of the year. The Dow finished down 15.51 points, or 0.12%, at 12571.91, after fluctuating between positive and negative territory for much of the session. The index surged 202 points Tuesday, its biggest gain since December. United Technologies led the blue-chip index lower, shedding $1.60, or 1.8%, to 87.22, while International Business Machines fell 1.56, or 0.8%, to 183.65, a day after hitting a record high on strong earnings results. Microsoft slumped 48 cents, or 1.7%, to 27.06. The Standard & Poor's 500-stock index dropped 0.89 point, or 0.07%, to 1325.84, as consumer discretionary and technology stocks lagged.

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Surprisingly strong earnings from Apple prompted investors to push the stock up 10.05, or 2.67%, to 386.90. The company more than doubled its quarterly earnings and reported higher revenue on strong iPhone and iPad sales. Apple's results, however, weren't enough to lift the Nasdaq Composite, which finished down 12.29 points, or 0.43%, at 2814.23. Wednesday's action came amid some weak economic data and a general reassessment of the $3.7 trillion debt-reduction plan.

Existing-home sales in the U.S. fell 0.8% in June from a month earlier, to the lowest level in seven months. The decline was bigger than economists expected and comes a day after housing starts rose to the highest level in five months. Financials were the S&P 500's biggest-gaining sector, rising 1.1%. E*Trade Financial surged 1.77, or 14%, to 14.72. The online brokerage disclosed it received a letter from hedge-fund group Citadel, its largest shareholder, requesting that E*Trade explore a possible sale of the company. Goldman Sachs Group rose 4.26, or 3.3%, to 132.75, and Morgan Stanley gained 74 cents, or 3.5%, to 21.72. Bank of America was the Dow's biggest gainer, rising 28 cents, or 2.9%, to 9.85, a day after reporting its third loss in four quarters. The stock is still down 10% this month.

European Markets

European stocks rose sharply, as recently beaten-down banks rallied, heavyweight BP rose and Apple's earnings gave the region's blue chip technology names a boost. The Stoxx Europe 600 index followed Tuesday's 0.8% rise with a 1.3% gain to 267.73. BP, a component of the index, rose 2.5% on market speculation the oil company could be getting a payment from Anadarko Petroleum, joint operator of the Deepwater Horizon oil rig, regarding last year's explosion and oil spill in the Gulf of Mexico.

Spokesmen for BP and Anadarko declined to comment. Banks rose on signs there might soon be a resolution to the U.S. debt-ceiling negotiations, after President Barack Obama shed light on a possible bipartisan deal to manage the U.S. deficit. The Stoxx Europe 600 banks index rose 3.7%. Societe Generale jumped 5.1% in Paris and Banca Popolare di Milano rose 7% in Milan. The Stoxx Europe 600 technology index ended 0.8% higher, though off the day's high. Chip designer ARM Holdings jumped 4.9% in London after Apple said earnings more than doubled and iPhone sales will top targets. ARM designs chips for the iPhone.

Finnish mobile-phone maker Nokia rose 4.8% ahead of second-quarter earnings expected Thursday. In London, the FTSE 100 rose 1.1% to 5853.82. helped by BP. Barclays soared 5.2%, Lloyds Banking Group 4.1% and Royal Bank of Scotland Group rose 3.1% after a Treasury Committee said more work needed to be done on an overhaul of the banking system. In Frankfurt, the DAX increased 0.4% to 7221.36. Deutsche Bank rose 3.4% and Commerzbank added 6.3%. Infineon Technologies gave up an early advance to finish down 3.2%. In Paris, the CAC-40 rose 1.6% to 3754.60. BNP Paribas and Credit Agricole each surged 4.6%. EADS jumped 3.6% as AMR, parent of the American Airlines, said it will buy 460 new aircraft from Boeing and EADS-owned Airbus.

Asian Markets

Asian stock markets ended mostly higher Wednesday as the prospect of U.S. lawmakers' agreeing to raise the nation's debt ceiling to avoid default and robust earnings from Apple spurred buying, with technology stocks leading the charge. Japan's Nikkei Stock Average ended 1.2% higher at 10005.90 and Taiwan's Taiex rose 2.1%, its best percentage gain since Sept. 13, to finish at 8706.17. South Korea's Kospi gained 1.2% to 2154.95.

However, China's Shanghai Composite fell 0.1% to 2794.20 as property developers and banks dropped amid worries about slowing economic growth and high inflation. And India's Sensex fell 0.8% to 18502.38, dragged down in part by a weak outlook from software-services exporter Wipro. Hong Kong's gains were capped by a 3.2% fall in Cnooc after the energy major announced a $2.1 billion acquisition of OPTI Canada Inc. The Hang Seng Index finished 0.5% higher at 22003.69.

Technology stocks in the region were particularly buoyant, after Apple posted better than expected earnings late Tuesday. Shares of Toshiba added 2.7% and Elpida Memory gained 2.2% in Tokyo, while Samsung Electronics rose 3.5% and LG Display climbed 4.8% in Seoul.

Among companies that assemble or supply parts for Apple's iPad tablets and iPhone smart phones, Foxconn International Holdings rose 2.6% in Hong Kong and Hon Hai Precision Industry gained 4.6% in Taipei. Shares of Taiwanese handset maker HTC jumped by the day's 7% limit after Google Chief Executive Eric Schmidt expressed support for the company in its patent battle with Apple. Many financial stocks improved: Mitsubishi UFJ Financial Group rose 1.6% in Tokyo and Bank of Communications rose 1.4% in Hong Kong.

Base Metals

Base metals closed mostly lower on the London Metal Exchange Wednesday amid mixed sentiment, with investors keenly awaiting fresh developments from Europe and the U.S. While a weak dollar capped losses, the markets struggled to hold their ground as optimistic expectations on breakthroughs for both Greece aid talks and U.S. debt ceiling negotiations began to ebb. LME three-month copper closed the afternoon open outcry session at $9,755 a metric ton, down 0.9% from Tuesday's PM kerb close.

Oil futures ended slightly higher Wednesday in volatile trading after a government report showed a steep drop in U.S. oil inventories last week. Light, sweet crude for August delivery settled up 64 cents, or 0.7%, at $98.14 a barrel on the New York Mercantile Exchange. With the front-month contract expiring at the close of trading, the more actively traded September contract settled up 54 cents, or 0.6%, at $98.40 a barrel.

Brent crude on the ICE futures exchange settled up $1.09, or 0.9%, at $118.15 a barrel. Futures ended higher after the after the Department of Energy said U.S. oil stockpiles fell 3.7 million barrels last week. The decline was bigger than expected, though it was offset somewhat by increases in inventories of refined products.

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