Dow Declines Slightly But Stays Above 11,000

Stocks ended mixed Tuesday as disappointing earnings reports from two big commodity companies gave some investors pause, while Apple Computer thrilled Wall Street with its holiday sales results.

The Dow Jones industrial average finished slightly lower but held above the 11,000 level for a second day.

In other action, Treasury bond yields rose before a heavy calendar of U.S. debt sales.

On Wall Street, major market indexes fell at the outset of trading, after five straight days of gains had carried the Dow above 11,000 for the first time since June 2001 and left several other indexes at record highs.

Late Monday, aluminum giant Alcoa -- one of the 30 Dow stocks -- said its fourth-quarter profit fell 16% from a year earlier, in part because of high energy costs. The results were a surprise to investors and pulled Alcoa’s shares down 97 cents, or 3.2%, to $29.60 on Tuesday.

Another commodity company -- copper miner Phelps Dodge -- also set a poor tone for the day’s trading by slashing its projection of fourth-quarter profit. The company estimated that it earned $1 to $1.30 a share, compared with Wall Street’s consensus estimate of $4.76 a share.

Phelps Dodge said that, despite record copper prices, its output missed expectations and it incurred heavy costs for hedging against the possibility of falling copper prices.

The stock plunged $7.97, or 5.2%, to $146.58. It had soared 45% last year.

Also in the commodity sector, Inco lost 65 cents to $45.31, Rio Tinto dropped $1.73 to $188.16, Potash slid $1.28 to $88.47 and Great Northern Iron Ore declined $1.53 to $130.

Still, the market overall pulled up from its morning lows, and the Dow finished nearly flat, off 0.32 point at 11,011.58.

Apple gave the tech sector a boost by saying sales last quarter reached a record $5.7 billion. The computer company’s shares surged $4.81 to a record $80.86.

That helped the Nasdaq composite index edge up 1.63 points, or almost 0.1%, to 2,320.32, its highest closing level in nearly five years.

Among other major tech shares, Seagate gained $1.03 to $23.32 and FileNet jumped $1.71 to $28.31, while Intel lost 35 cents to $26.12.

The Standard & Poor’s 500 index eased 0.46 point to 1,289.69. The New York Stock Exchange composite slipped 0.3% after reaching a record high on Monday, but more stocks rose than fell on the NYSE.

A Bloomberg News index of 158 real estate investment trust shares rose 0.9% to a record high. The index has soared 6.3% year to date, compared with a 3.3% gain for the S&P; 500 and a 5.2% rise for the Nasdaq index.

Fourth-quarter earnings reports will dominate the market news for most of this month. Operating earnings of the S&P; 500 companies are expected to be up about 13% from a year earlier, according to data tracker Thomson Financial.

Given the stock market’s powerful new-year advance, “we could set ourselves up for disappointment if earnings don’t come in in a positive way,” said Linda Duessel, market strategist at Federated Investors.

In the bond market, the 10-year Treasury note yield rose from 4.37% on Monday to 4.43%, the highest since Dec. 22.

“There is a lot of supply coming,” said Dominic Konstam, head of interest rate strategy at Credit Suisse First Boston in New York.

The Treasury will sell $13 billion of five-year notes today. It could raise a total of $100 billion over the next six weeks, analysts said.