Blue Chips Pad Recent Gains; T-Bond Yields Edge Higher

The Dow Jones industrial average moved into positive territory for the year on Friday as investors continued to push back into the market.

Wall Street finished the week mixed, however, as a pickup in tech stocks Friday wasn’t enough to overcome losses in previous sessions.

In other trading, long-term Treasury bond yields edged up Friday after rebounding Thursday from their lowest levels since at least late October.

In the stock market, a flood of buy orders from institutional traders, impressed with the market’s ability to hold on to last week’s gains, drove stocks broadly higher, analysts said.

“The market was quite oversold over the past few days, and I think we’re bouncing off of that,” said Ken Tower, chief market strategist for Schwab’s CyberTrader.

The Dow Jones industrial average rose 46.40 points, or 0.4%, to 10,796.01, after gaining 85.50 points Thursday. The Dow is up 0.1% year to date.

Broader market indicators also moved higher. The Standard & Poor’s 500 index rose 8.29 points, or 0.7%, to 1,205.30, and the Nasdaq composite gained 23.56 points, or 1.2%, to 2,076.66. Both remained down for the year, however.

Advancing stocks topped losers by more than 2 to 1 on the New York Stock Exchange.

Wall Street had a volatile week as investors dumped technology shares and small-cap stocks Wednesday, in a reprise of the selling wave that dominated in January.

By contrast, blue-chip issues held up relatively well. For the week, the Dow rose 0.8% and the S&P; climbed 0.2%, while Nasdaq fell 0.5%.

Most companies already have reported fourth-quarter earnings. Operating profit for the S&P; 500 companies that have reported results are up 21.1%, on average, from a year earlier, according to Thomson First Call.

Next week’s big event may be Federal Reserve Chairman Alan Greenspan’s testimony before Congress on Wednesday and Thursday, analysts said.

His remarks also could be important to the bond market. Bond yields have tumbled in recent weeks, in part on expectations that the Fed might soon be done tightening credit. But there was more doubt about that prospect as the week ended.

The 10-year Treasury note yield was at 4.08% on Friday, up from 4.07% on Thursday and unchanged from a week earlier.

In Friday’s market highlights:

* Apple Computer jumped $2.85 to a record closing high of $81.21 after saying it would split its stock 2 for 1.

But rival Dell lost $1.58 to $39.99. It beat analysts’ quarterly profit estimates by a penny a share, but sales were lower than expected and investors were further disappointed by a tepid outlook for the current quarter.

* Semiconductor stocks continued their rebound. The SOX chip stock index jumped 3.6%.

* Watson Pharmaceuticals gained $2.54 to $30.65 for the biggest increase in the S&P; 500. The Corona-based drug maker said fourth-quarter profit rose to 46 cents a share on higher sales of its generic products and lower expenses. The average analyst estimate was 43 cents.

* Verizon Communications rose 27 cents to $36.31. The company may announce an agreement to buy MCI in the next few days, the Wall Street Journal reported.

* Home builders declined after a Smith Barney analyst lowered his rating on six of them to “hold” from “buy.” KB Home of Los Angeles sank $3.64 to $112.80. Beazer Homes lost $3.01 to $162.32. Hovnanian Enterprises fell $2.90 to $53.60. Pulte Homes dropped $1.26 to $69.90.

* Pixar Animation Studios dropped $2.82 to $87.06 despite beating Wall Street’s quarterly profit estimate by 14 cents a share.

* Sharper Image tumbled $1.84 to $15.10 after the San Francisco-based retailer said its earnings for 2005 would be sharply lower than Wall Street expected.