Dow closes just shy of record high

Blue-chip average nears record hit in February, thanks to upbeat results from J&J, Coke; after-hours, Yahoo! results disappoint, IBM and Intel report too.

By Alexandra Twin, CNNMoney.com senior writer

NEW YORK (CNNMoney.com) -- The Dow flirted with a fresh record high Tuesday and the S&P 500 closed at its highest point since 2000 as investors welcomed lower oil prices and upbeat earnings from Coca-Cola and Johnson & Johnson.

The Dow Jones industrial average (up 52.58 to 12,773.04, Charts) gained about 0.4 percent. During the session, the index briefly topped its record closing high of 12,786.64 hit last February, before scaling back. The Dow has not topped its all-time trading high.

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The broader S&P 500 (up 3.01 to 1,471.48, Charts) index added a few points and ended at a fresh 6-1/2 year high. The Nasdaq (Charts) composite ended just below unchanged.

Treasury prices rose, lowering the corresponding yields. The dollar fell versus the euro, yen and sterling - which hit a 15-year record versus the greenback. Oil prices slipped.

After the close, investors took in earnings from a bevy of marquee companies, including IBM (up $0.94 to $97.12, Charts), Intel (up $0.29 to $20.98, Charts) and Yahoo! (up $0.48 to $32.09, Charts)

IBM reported higher quarterly earnings that met estimates and higher sales that topped forecasts. The leading technology services company also said it expects earnings growth of between 10 percent and 12 percent this year, reiterating its forecast from January. Shares lost 1 percent in extended-hours trading.

Intel reported higher first-quarter earnings that met estimates on lower revenue that missed forecasts. The company also said that gross margins, a key measure of profitability, rose in the quarter. Shares were little changed in extended-hours trading.

But Yahoo! disappointed, reporting quarterly revenue and earnings that were short of forecasts, sending shares 6 percent lower in extended-hours trading.

Earnings are due Wednesday morning from Dow components JP Morgan Chase (Charts) and Untied Technologies (Charts). Other companies due to report include AMR (Charts) and Motorola (Charts).

Stocks surged Monday as investors eyed merger news and a rash of earnings from Dow component Citigroup (down $0.40 to $52.53, Charts) and others. Blue chips extended the gains Tuesday even while the tech-driven Nasdaq struggled.

"The early earnings reports and guidance haven't disappointed and this is helping to give the market a little momentum, with the Dow back near record territory," said Peter Cardillo, chief market economist at Avalon Partners.

Upbeat earnings reports from Coca-Cola and Johnson & Johnson boosted the Dow. But the Nasdaq dipped as investors eyed a mixed batch of earnings for the tech-fueled index - and the morning's economic news.

"The earnings news is helping and some of the economic news has been strong," said Harry Clark, CEO at Clark Capital Management.

Although the first wave of earnings have been strong, Clark said, the overall earnings reporting period is going to be weak. Yet, that slowdown has been so widely anticipated that investors are already starting to look beyond it, he said.

Nearly a fifth of the S&P 500 reports results this week, including 12 Dow components.

S&P 500 earnings are currently on track to rise 3.4 percent from a year earlier, according to the latest Thomson Financial figures. That rate of earnings growth will be the slowest in more than 3-1/2 years, slipping below 10 percent on a year-over-year basis after 14 quarters of double-digit growth.

The day brought a number of economic reports.

Rising gasoline costs drove consumer prices up 0.6 percent in March, the sharpest rise in nearly a year, the government reported. But so-called core prices, which strip out volatile food and gas costs, rose a smaller-than-expected 0.1 percent in the month. (Full story).

The battered housing sector got some encouraging news. Both housing starts and building permits rose more than expected in March but results were affected by severe weather in the Midwest and were weaker versus prior-year levels. (Full story).

Yet a third report was less upbeat, showing a surprise drop in industrial production in March, missing forecasts for a flat reading. Capacity use dropped more than expected. (Full story).

U.S. light crude oil for May delivery fell 51 cents to settle at $63.10 a barrel on the New York Mercantile Exchange, retreating after an early advance.

COMEX gold for June delivery fell $2 to settle at $692.50 an ounce.

A number of companies reported earnings, including Dow components Coca-Cola and Johnson & Johnson.

Coke (up $1.30 to $51.57, Charts) reported first-quarter earnings and sales that rose from a year ago and topped estimates, sending shares up about 2.6 percent. However, the beverage company's CEO warned of weak U.S. soda sales in 2007. (Full story).

Johnson & Johnson (up $1.53 to $64.55, Charts) reported higher quarterly earnings and sales that topped estimates - and also boosted its 2007 earnings outlook. The stock climbed 2.4 percent. (Full story)

EMC (up $0.46 to $15.22, Charts) reported higher quarterly earnings and revenue that topped forecasts. Shares of the maker of computer data storage gear gained 3 percent in active New York Stock Exchange trading.

On the downside, TD Ameritrade (down $1.56 to $15.31, Charts) reported weaker quarterly earnings that were short of forecasts. Its stock tumbled more than 9 percent in active Nasdaq trading and dragged on the Amex Securities Broker/Dealer (Charts) index.

Market breadth was negative. On the New York Stock Exchange, losers beat winners by a narrow margin on volume of 1.57 billion shares. On the Nasdaq, decliners topped advancers 4 to 3 on volume of 1.95 billion shares.

Treasury prices climbed, lowering the yield on the benchmark 10-year note to 4.68 percent from 4.73 percent Monday. Bond prices and yields move in opposite directions.

In currency trading, the dollar fell to a two-year low versus the euro and fell versus the yen after the morning economic news. Meanwhile, the British pound surged to a 14-year high versus the dollar. Top of page

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.