Stocks Mostly Higher as Rally’s Momentum Slows
The stock market closed mostly higher Tuesday in active trading, though the momentum slowed sharply after Monday’s strong rally.
Treasury bond yields sank on news that an index of activity in the services sector of the economy was weaker than expected in December. The dollar fell to yet another low against the euro.
On Wall Street, stocks struggled early in the day after the big advance Monday -- which had marked the first significant trading session of the new year.
The Dow Jones industrial average, which surged 134.22 points to a 22-month high of 10,544.07 on Monday, fell as low as 10,499.85 early Tuesday.
But by the close, the Dow had pared most of its losses. It finished down 5.41 points at 10,538.66.
Most other major indexes closed modestly higher. The Nasdaq composite rose 10.01 points, or 0.5%, to 2,057.37, a two-year high.
The Standard & Poor’s 500 index eked out a gain of 1.45 points, or 0.1%, to 1,123.67, its highest since April 19, 2002.
The S&P; mid-size stock index rose 1.25 points, or 0.2%, to 581.86, a record high.
Winners outnumbered losers by about 5 to 4 on Nasdaq. Winners had a narrower edge on the New York Stock Exchange.
“What you’re seeing is a slight pause in what is still an upwardly biased market,” said Brian Bush, director of equity research at brokerage Stephens Inc. “And I expect to see more upside.”
Investors kept an upbeat view Tuesday despite some weaker economic data, including the report indicating a slowdown in the expansion of the services sector and a report showing a drop in factory orders in November.
If stock investors were unfazed by the data, bond investors viewed the numbers as perhaps pointing to a deceleration in the economy -- which might delay any credit-tightening move by the Federal Reserve.
Longer-term Treasury bond yields slid, with the 10-year T-note ending at 4.27%, down from 4.38% Monday.
In the currency market, traders continued to bash the dollar, sending it to a record low of $1.277 per euro from $1.267 on Monday.
Traders sold the dollar after Belgian Finance Minister Didier Reynders told Bloomberg News that the euro’s rise “is not a problem” for the European economy, even though the trend makes European exports more expensive in the United States.
“We can have a strong euro with a strong economy,” Reynders said.
The comment was another sign that European governments aren’t interested in taking steps to slow the dollar’s decline.
But central banks in South Africa, Hong Kong and Japan intervened to buy dollars Tuesday. The dollar ended slightly higher against the yen.
In commodities trading, oil and gold prices eased after jumping Monday.
Among the day’s highlights:
* Many technology shares, leaders in the market rally last year, rose further.
Sun Microsystems gained 33 cents, or 7%, to $5.03, highest since midsummer. Merrill Lynch analyst Steven M. Milunovich said Sun might have had a strong fourth quarter.
Other tech winners included Cisco Systems, up 29 cents to $25.06; Black Box, up $1 to $48.10; Agilent Technologies, up 93 cents to $30.48; and Komag, up $4.52 to $19.76 after the computer disk maker raised its forecasts for fourth-quarter results.
* On the downside, personal computer maker Gateway slumped 64 cents to $4.34 after the firm cut its fourth-quarter revenue forecasts.
* EBay hit a record high, up 54 cents to $65.16, one day after saying it would raise fees.
* St. Jude Medical, a maker of devices that shock a stalled heart back into rhythm, jumped $3.67 to $63.55. The company was included in a list of favored stocks by analyst Michael Weinstein of brokerage J.P. Morgan.
* Some hamburger chains rallied after struggling recently on mad cow worries. Sonic surged $3.28 to $34.42, and Jack in the Box rose $1.22 to $23.05.
Market Roundup, C6-7
