Seesawing Dow Dips 5.22 but Stays Above 6,000

Blue-chip stocks pulled back slightly Tuesday from Monday’s record highs as investors sorted through the heaviest batch of third-quarter corporate earnings reports so far.

The Dow Jones industrial average, which had vaulted 40.62 points Monday to close at a record 6,010.00, slipped 5.22 points Tuesday to end at 6,004.78.

The index pulled up from a loss of about 40 points at midday.

In the broad market, stocks were mostly lower in heavy trading, as profit takers held sway after the market’s recent steep gains.

Losers outnumbered winners by 13 to 11 on the Big Board.

However, the Nasdaq composite index of mostly smaller stocks inched up 1.74 points to a record 1,258.10, largely because of a sharp gain in shares of Intel, the semiconductor giant.

Some major takeover deals, including an $8-billion merger between CSX and Conrail and a $1.5-billion takeover by Warren Buffett’s Berkshire Hathaway--spiced up the session.

But with the bond market calm for the day--ahead of today’s report on September consumer inflation--stock trading was dominated by reaction to the first barrage of third-quarter earnings reports.

Analysts had expected robust results from Intel, which last month said demand for its computer chips would drive third-quarter profit above expectations. But the final earnings number, reported late Monday, outstripped even Wall Street’s revised estimates. Intel shares jumped 3 1/2 to a record 111 1/8 on Tuesday.

Its strength also boosted personal computer makers such as Compaq, up 2 to 74 3/4, and Dell, up 3 1/2 to 88 3/8.

Among other market highlights:

* Stocks reacting favorably to earnings reports included Citicorp, up 1 5/8 to 95; GM, up 1/4 to 52 1/8; Clorox, up 3 7/8 to 101 5/8; Mattel, up 1 to 26 1/8; Caterpillar, up 2 1/8 to 76 1/4; and Chips & Technologies, up 4 7/8 to 19 3/4.

* On the downside, stocks falling after earnings reports included Federal Home Loan Mortgage, down 3 3/4 to 96 3/4; Honeywell, down 2 5/8 to 62 5/8; Wells Fargo, down 4 7/8 to 250 1/4; and Coca-Cola, off 5/8 to 48 3/4.

* On ther merger front, Conrail soared 14 1/8 to 85 1/8 after CSX agreed to merge with it in an $8-billion deal. CSX fell 2 3/4 to 46 3/4. The news pushed the Dow transportation index, which includes both of those stocks, up 47.23 points, or 2.3%, to 2,105.28.

* In the tech sector, Bay Networks tumbled 3 3/8 to 20 7/8 after reporting a drop in profit and the resignation of its chief executive.

Among other tech issues, U.S. Robotics soared 8 7/8 to 78 amid speculation the company will unveil a new high-speed modem today.

In Mexico, stocks closed lower for the fourth straight day on anticipation of a dramatic jump in interest rates because of government efforts to help support a weakened peso.

The market’s key Bolsa index closed down 36.21 points, or 1.1%, to 3,251.17, its lowest level so far this month.

After markets closed, the government indeed announced that the rate on its bellwether 28-day cetes, or Treasury bill, rose 3.16 percentage points at weekly auction to 25.90%.

Although a big jump, expectations were for a rise of about 4 points. Rates for longer maturities also rose.

The peso has weakened substantially in the last week. It strengthened somewhat at session-end on the rate expectation, closing at 7.720 per dollar.

In commodity trading, natural gas futures prices surged on the New York Mercantile Exchange on concerns about supplies after a gas company was forced to shut down a pipeline and fears increased about a tropical storm brewing in the Caribbean.

In the rest of the energy market, crude oil, heating oil and gasoline all fell amid profit taking. In other markets, orange juice futures rose amid fears about a tropical storm near Mexico.

Cocoa prices on the Coffee, Sugar and Cocoa Exchange ended sharply higher on news that the cocoa-rich Ivory Coast would not begin exports Tuesday. The starting date was pushed back because the government had not yet decided how much to pay farmers for the cocoa beans.

Cocoa for December delivery settled at $1,396 a metric ton, up $17 from the previous day.