Stocks trimmed their gains, sending blue-chip shares into negative territory in late afternoon trading yesterday as investors weighed the gloomy economic environment against hopes the Federal Reserve's rate cuts could help spur a rebound. The market made a run for the highs of the day in choppy early afternoon trading, building on a rally in the previous session when the Fed sent stocks soaring with its 10th interest rate cut so far this year.

The technology-laced Nasdaq Composite clung to a gain of nine points, or 0.52 per cent, at 1,844, as investors shrugged off disappointing results and a discouraging forecast from wireless telecommunications firm Qualcomm Inc.

Interest-rate-sensitive financial stocks like JP Morgan Chase, up $1.28 at $38.82, and American Express Co, up 94 cents at $31.50, underpinned the blue-chip Dow. Stocks have surged in recent weeks as investors put aside their current economic woes, hopeful that the Fed's rate reductions and a hefty fiscal stimulus package can help the economy spring back by the middle of next year.