Stocks turn higher after Obama plan

NEW YORK (CNNMoney) — Stocks drifted back into positive territiory late Wednesday as investors digested President Obama’s plan to cut the U.S. budget deficit by $4 trillion over 12 years.

With an hour left in the session, the Dow Jones industrial average (INDU) was up 13 points, or 0.1%, the S&P 500 (SPX) added 1 point, or 0.1%, and the Nasdaq (COMP) rose 15 points, or 0.6%.

Despite a strong start thanks to better than-expected profit and revenue figures from JPMorgan Chase (JPM, Fortune 500), the first major bank to report first-quarter results, stocks spent the early part of Wednesday’s session in the red.

The losses came after JPMorgan CEO Jamie Dimon’s comments that mortgage-related losses would continue for some time, and a warning that investors should not expect additional dividend increases beyond the 25 cents set for this quarter. Shares of the bank slid more than 1% following the comments.

But the market again reversed course in the afternoon after Obama laid down a series of spending and deficit targets.

U.S. stocks finished lower Tuesday, with all three major indexes losing about 1%, as a 3% drop in oil prices sparked a sell-off in energy stocks, and Alcoa’s sales disappointment weighed down the Dow.

Economy: Economists are continuing to scan the latest data for the domino effect of rising prices on other areas of the economy.

Before the market opened, the government reported retail sales rose 0.4% in March. The number was slightly below forecasts. Stripping out gas, retail sales were only up 0.1% for the month.

“Clearly, higher commodity prices are factoring into higher retail sales,” said Aichi Amemiya, economist with Nomura Securities.

Retail sales for the prior two months were revised significantly higher, causing Nomura to raise its daily revised estimates for first-quarter growth to 2.3%, from 2.1% before.

A separate government report showed that business inventories rose 0.5% in February, slightly below forecasts.

Companies: Shares of Tyco International (TYC) fell 1.8%, after French company Schneider Electric denied reports that it is trying to buy the Swiss manufacturing conglomerate for $30 billion.

World markets: European stocks ended higher. Britain’s FTSE 100 and France’s CAC 40 rose 0.8%, while the DAX in Germany added 1.1%.

Asian markets ended higher. The Shanghai Composite rose just under 1%, the Hang Seng in Hong Kong added 0.7% and Japan’s Nikkei rose 0.9%.

Currencies and commodities: The dollar fell against the euro and the British pound, but rose against the Japanese yen.

Oil for May delivery fell 65 cents to $105.60 a barrel.

Gold futures for June delivery slid 60 cents to $1,453 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury rose, pushing the yield down to 3.48% from 3.50% late Tuesday.  

First Published: April 13, 2011: 9:45 AM ET