With Federal Reserve chairman Ben Bernanke singing the same tune to the Senate that investors heard from the House yesterday, market attention is focussed on mixed earnings reports. Poor earnings from Yahoo! and AMD put the direction of futures on a downward slope, but after mixed earnings from the financial sector the market regained its footing after 90 minutes of trading

As of 12:30, the S&P 500 is slightly higher at 957, the Dow is a 0.27% lower at 8939, and the NASDAQ is up +0.69% 1929.

Earnings Recap:

Morgan Stanley Disappoints:  The Q2 loss for Morgan Stanley was worse than estimates as the cost of repaying bailout money overtook new revenue. Earnings per share fell by $1.37 compared to last year, far worse than forecasts that were looking for a loss of just 54 cents. Net income was $149 million in the quarter, compared from $1.14 billion one year ago. An hour into the session, stock is down 1.5%.

Profit Surges at Wells Fargo: First, the good news ― WF earned $3.17 billion in the second quarter, or 57 cents a share, gaining 81% from the same period one year ago. Looking ahead, things may be less optimistic ― as debtors struggle to make payments amidst the recession, bad assets are piling up at Wells, the biggest home lender. WF stock fell 6% in early trading. 

Boeing Continues Flying: The largest aircraft manufacturer recorded a 17% jump in revenue in the second quarter. With net income at $998 million, earnings per share were $1.41, topping analysts’ estimates by 20 cents and beating last year’s Q2 income of $852 million ($1.16 per share). Stock is up 0.28%.

Pfizer on a High: The world’s largest pharmaceutical company beat earnings estimates with Q2 revenue of$3.25 billion, or 48 cents a share, compared with estimates of 47 cents per share. One year earlier quarterly revenue was $3.7 billion. Pfizer said profits would have been higher but that foreign exchange hurt revenue by more than $1 billion.

Data Recap:

No major data is on Wednesday’s schedule, but the latest home price index from the Federal Housing Finance Agency said U.S. home prices rose 0.9% in May. On a yearly basis, prices are still down 5.6%, but the gain two months ago is another signal that the market could be stabilizing.

FHFA director James Lockhart said, “Revisions and volatility of the monthly index make it hard to draw any conclusions, but the seasonally-adjusted HPI for the first five months of this year is up 0.3% or 0.7% on an annualized basis.”