Most Stocks Post Gains Despite a Drop in the Dow

U.S. stocks closed mostly higher Tuesday despite a slide in some big-name blue chips.

In other trading, gold prices rebounded as the dollar fell. Bond yields edged up.

Tokyo stocks rallied after the Bank of Japan said it was easing monetary policy to help the economy.

On Wall Street, the Dow Jones industrial average slumped as earnings reports from some key companies triggered profit taking.

The Dow lost 71.85 points, or 0.7%, to 10,528.66, pulled down by 3M, which fell $5.07 to $80.41, and United Technologies, which lost $2.70 to $94.80.

Both companies reported fourth-quarter earnings that beat estimates. But some investors focused on elements of the reports that were less bullish than hoped, analysts said.

The Dow, however, wasn’t representative of the broad market trend Tuesday, as investors returned from the long holiday weekend. Markets were closed Monday in observance of Martin Luther King Day.

The Nasdaq composite index added 7.52 points, or 0.4%, to 2,147.98, a 30-month high. The Standard & Poor’s 500 index slipped less than 0.1%, losing 1.06 points to 1,138.77.

Rising stocks outnumbered losers by nearly 2 to 1 on Nasdaq and by more than 3 to 2 on the New York Stock Exchange.

“You have all the pension money coming in January, and that brings a lot of players back into the market,” said Neil Massa, equity trader at John Hancock Advisers in Boston. Recent strong trading volume “would imply that the market is trending higher, that it’s for real.”

Corporate earnings reports continue to be the principal factor moving share prices.

Stocks rising in the wake of fourth-quarter profit reports Tuesday included Johnson & Johnson, up $1.05 to $51.50, and discount brokerage Ameritrade, up $1.89 to $17.26. Communications equipment maker Harris soared $7.05 to $47.55 after raising its 2004 profit forecast.

But 3M failed to excite investors with its report. Quarterly earnings were up 21% but the company’s sales gains were less than some analysts expected.

United Technologies said earnings were up 10%, but the company declined to raise its 2004 forecast from the previous forecast of $5 to $5.30 a share.

A number of other heavy-industry shares also pulled back, including Illinois Tool Works, down $3.48 to $81.05, and Briggs & Stratton, down $2.26 to $63.36.

“The economy is going to do just fine, but the stock market has priced in much of the improvement,” Stephen Bartholow, who helps manage $1.8 billion at Carret & Co. in Hanover, N.H., told Bloomberg News.

Yet investors worldwide keep finding reasons to buy shares.

Japan’s Nikkei-225 stock index jumped 1.7% on Monday, crossing the 11,000 mark for the first time since October. It rose further Tuesday, adding 66.77 points, or 0.6%, to 11,103.10, after the Bank of Japan said it would raise the amount of cash in the system to help strengthen the country’s economic recovery.

Analysts said the bank’s action would help placate other rich countries concerned about Japan’s slow-growth economy.

In commodities trading, near-term gold futures in New York were up $6 to $412.70 an ounce. The metal dived nearly $20 last week as the dollar strengthened, but the buck resumed its decline Tuesday.

In bond trading Treasury yields were modestly higher. The 10-year T-note ended at 4.05%, up from 4.03% Friday.

Among the day’s highlights:

* Technology stocks helping to lift Nasdaq included Cirrus Logic, up 80 cents to $9.36; JDS Uniphase, up 56 cents to $5.73; and Juniper Networks, up 46 cents to $30.39.

* Energy stocks rose with oil prices. ChevronTexaco gained $1.31 to $86.03, Baker Hughes was up $1.11 to $34.14 and Burlington Resources jumped $2.10 to $58.45.

* Honeywell slid $1.77 to $35.66. The firm, a Dow index member, halted talks to sell its Bendix vehicle brake-pad business, a transaction that was aimed at extricating Honeywell from asbestos-related lawsuits.

Market Roundup, C6-7