Market Posts Broad Advance, Though Nasdaq Slips

Stocks were broadly higher Tuesday amid the first major wave of fourth-quarter corporate earnings reports, though the tech sector still struggled.

Investors awaiting the release of Intel’s earnings were mostly shopping for blue-chip stocks much of the day, pushing the Dow Jones industrials up 127.28 points, or 1.2%, to 10,652.66.

The Nasdaq composite closed off 7.95 points, or 0.3%, to 2,618.55, but it rallied from a low of 2,576.

Intel released its results after the market closed, and earnings were better than expected, though the company predicted tough months ahead.

Considering the uncertainty as traders awaited Intel, the strength in the broad market impressed analysts: Winners handily outnumbered losers 24 to 15 on Nasdaq, where 2.4 billion shares were traded. Winners led losers by a 17-12 margin on the New York Stock Exchange, where trading was active.

With fourth-quarter earnings reports beginning, Wall Street spent the session focused on earnings outlooks rather than quarterly results, which in many cases have already been factored into stock prices.

Many big-name tech stocks closed lower, including Microsoft, down 94 cents to $52.56; Oracle, down 50 cents to $31.81; and Gateway, down 94 cents to $20.16.

Gateway was cut to “neutral” from “buy” by Noble Financial Group earlier in the day.

“The tone on technology has been negative for a while. No one knows how deep this slowdown is going to be,” said Matt Brown, head of equity management at Wilmington Trust.

Juniper Networks, which reported earnings after the market’s close, was up $4.94 at $132.94 in after-hours activity after falling $3.50 at $128 in regular trading. Its results beat analyst estimates by 6 cents.

The market was more bullish on so-called old-economy issues ranging from car manufacturing to aluminum. In regular trading, Alcoa rose $1.75 to $33.56. General Motors, expected to announce its earnings today, climbed $2.88 to $55.75.

Drug issues also fared well. Among drug firms reporting earnings, Abbott Labs rose $1.44 to $45 and Forest Labs gained $2.75 to $62.31.

A Commerce Department report showing a 0.5% increase in inventories at U.S. companies and a 0.5% drop in sales added to the sentiment that the economy is weakening, and helped send Treasury yields slightly lower.

Among Tuesday’s highlights:

* Banking stocks advanced after a number of companies posted strong earnings. The BKX index of 24 major banks rose 2.2%, with Citigroup rising $1.56 to 54.69 and Wells Fargo climbing $1.25 to $49.94. Bank of America gained $1.88 to $50.94 despite posting a 27% drop in earnings.

Insurance stocks also were strong, led by Progressive, up $3.44 to $87.44, and St. Paul, up $1.19 to $46.31.

* Internet stocks continued the mild rally that began Friday. TheStreet.com’s Internet index was up 2.1% on gains by names such as EBay, up $3.75 to $43.81; Yahoo, up 81 cents to $27.38; and BroadVision, up $1 to $16.81.

But many chip stocks were weak. Micron Technology slid $2.50 to $38.94, Vitesse Semiconductor dropped $3.63 to $54.44 and Broadcom lost $5.31 to $117.88.

In the telecom sector, Nokia fell $2 to $39.38.

* Utility stocks were hit amid new problems for Edison International, which fell 63 cents to $9.56, and PG&E;, which lost 63 cents to $10.94. The Dow utility index fell 1.8% and is down 17.6% since Dec. 31.

Associated Press and Bloomberg News were used in compiling this report.

Market Roundup, C8, C10