Before the bell: Investor caution reigns

The recent strong gains in stock prices appear to have many investors cautious as August winds down. With stock indexes at the highest points all year, any gains may be modest on Wall Street today.

Stocks rose slightly yesterday on news that oil inventories last week were higher than anticipated, leading to speculation that an economic recovery, if on its way, may be slow and anemic.

Stocks to watch include luxury home-builder Toll Brothers (NYSE: TOL), which reported Thursday morning a much larger quarterly loss of $472.3 million, or $2.93 a share, compared to a loss of $29.3 million, or 18 cents a share, a year ago. Included in the loss was a $439.4 million non-cash deferred tax allowance and write-downs totaling $115 million in the quarter. Last year's results included write-downs of $139.4 million. New home buyers wait-and-see attitudes took a toll on the company's revenues, which fell 42% to $461.3 million. But the company said it sees signs of stabilization in the housing market. The company is scheduled to discuss its fiscal third-quarter results today in a conference call at 2 p.m. ET.