Dow Seesaws to 19-Point Loss; Yields Climb

U.S. stocks fell in a volatile session whipped by concern that rising share prices aren’t justified by corporate earnings prospects.

The Dow Jones industrial average snapped its steepest one-month advance in nearly five years, closing down 19.38 points at 6,528.41 after rising 41.74 and tumbling 50.68. The swing was the biggest since the average seesawed through a 137.1-point range Nov. 6.

Although relatively minor, the retreat was the largest for the Dow since late October, underscoring the blue-chip barometer’s almost uninterrupted ascent this month. The Dow jumped 76 points on Monday for its first close above 6,500, pushing November’s advance to more than 8%.

Most broad stock measures ended slightly lower after rebounding from their lows, although the technology-laden Nasdaq market managed to pull higher in the last hour, padding Monday’s record high.

Stocks jumped in the morning as bonds rallied on the latest economic news, briefly sending interest rates toward their lowest level since early March.

In another sign that economic growth may be moderating enough to contain inflation without an interest rate hike, the Conference Board said its consumer confidence index held steady in November.

As bond prices rose Tuesday morning, the yield on the 30-year Treasury bond briefly fell to near 6.36%, from Monday’s 6.42%.

The last time the yield finished a day below 6.40% was March 5. That was just three days before the Dow plunged 171 points as interest rates soared on a report that revealed a potentially inflationary increase in payroll and wage levels--a leading influence on a product’s price.

With investors nervously awaiting what many analysts consider an inevitable pullback after such a sharp advance in stocks and bonds, Tuesday’s early spurt triggered a round of profit taking. As bonds fell, the yield on the long bond rose to its close of 6.44%, pressuring stocks. But as usual, the drop was viewed as a buying opportunity for those with cash on the sidelines.

“Investors are very nervous, and that’s reflected in the action of the market,” said Peter Anderson, chief investment officer at the IDS Advisory Group in Minneapolis. “They’re afraid not to be in it, but scared to be in it. One hour they’re more afraid than greedy, the next hour they’re more greedy than afraid.”

Declining issues outnumbered advancers by nearly a 6-5 margin on the New York Stock Exchange.

The Standard & Poor’s 500-stock index fell 1.07 points to 755.96; the NYSE’s composite index fell 0.88 point to 397.98; the American Stock Exchange’s market value index fell 1.05 points to 588.33.

The Nasdaq composite index rose 0.83 point to 1,281.20, its second straight record finish.

Among Tuesday’s highlights:

* Walt Disney was the Dow’s strongest issue, rising 2 1/2 to 76 after the company reported a 27% gain in quarterly profit that beat expectations.

* The Dow’s biggest decliners included many of the high-fliers of recent weeks. General Electric fell 1 3/4 to 102 and Procter & Gamble fell 1 1/2 to 109 3/8.

* Among technology issues, IBM rose 3/8 to 158 after its board authorized a $3.5-billion stock buyback. IBM’s shares have been trading at their highest point in more than nine years for several days.

Texas Instruments jumped 4 3/8 to 60 7/8 after it signed a 10-year cross-licensing agreement for semiconductor patents with Samsung Electronics, after a delay of almost a year as the two wrangled over terms of the accord.

Dell Computer fell 2 to 99 3/4 after the computer maker’s rating was cut to “hold” from “buy” by CS First Boston Inc.

* Texaco fell 1 1/2 to 100 1/2 amid concern over a boycott against the company sparked by anger over widely published racist comments made by corporate executives.

* Deere fell 2 5/8 to 44 after the company said net income rose less than expected. Other construction equipment firms also lost ground. Caterpillar fell 2 to 78 1/8 and Case lost 1 1/4 to 52 5/8.

* San Ramon, Calif.-based Mecon plunged 8 1/8 to 6 7/8 after the software company said it will report a loss in its fiscal third quarter as it reshuffles top management and moves its corporate headquarters.

* Fleetwood Enterprises fell 4 1/2 to 31 3/4 after the company said it’s seeing less demand for both its recreational vehicles and manufactured homes and that sales in the third quarter are running behind last year’s pace.

* Among the day’s initial public offerings, Omaha-based West Teleservices rose 3 7/8 to 21 7/8 from its initial offering price amid investor enthusiasm for companies that provide telemarketing services.

But Clifton, N.J.-based Linens ‘n Things was little changed, rising 1/8 to 15 5/8 in its first day of trading, on skepticism that the household goods retailer can win customers from powerhouse rival Bed Bath & Beyond, which lost 3/8 to 26 1/4.

Overseas, Japanese stocks fell after a widely watched economic survey showed that executives still lack confidence in the economy.

Tokyo’s Nikkei index fell 0.56%. Traders said they will be looking for signs that Japanese executives are gaining confidence and that the economy is recovering before pushing ahead with a rally that’s sent the benchmark index up almost 5% this month.

Frankfurt’s DAX index rose 0.4%, and London’s FTSE-100 rose 0.3%.