Dow defies bad signs

NEW YORK (CNNMoney.com) -- The Dow industrials gained while the broader market crept lower Tuesday afternoon as investors weighed strength in Honeywell, Texas Instruments and IBM against weakness in housing and consumer confidence.

The Dow Jones industrial average (up 16.17 to 12,935.57, Charts) added 0.2 percent with 2-1/2 hours remaining in the session. The broader S&P 500 (down 1.91 to 1,479.02, Charts) index composite lost around 0.2 percent. The Nasdaq (down 1.76 to 2,521.91, Charts) was little changed.

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All three major gauges dipped modestly Monday after ending the previous week at multi-year highs, thanks to strength in earnings. The Dow ended last week at an all-time high, while the S&P and Nasdaq ended the week at more than 6-year highs.

The major gauges inched higher in the first 30 minutes of trading Tuesday, following TI's upbeat forecast and IBM's $15 billion share repurchase program.

But stocks turn mixed after the release of the 10 a.m. ET economic reports.

The Dow, driven by gains from IBM and Honeywell, peaked around 12:30 p.m. before easing slightly in the afternoon.

"The market is struggling a bit today with the weaker economic news," said Peter Cardillo, chief market economist at Avalon Partners.

He said that while the earnings continue to beat reduced expectations, investors have likely already factored that in to their assessment of the market, as was evident with last week's big rally.

S&P 500 earnings are currently on track to have risen 5.2 percent from a year ago, according to the latest Thomson Financial estimates.

As the Dow tries to surpass 13,000, stocks could be choppy, with investors taking their time about pushing the index over the key psychological level.

What's working in the Dow's favor is that beyond the psychology, there are no technical market factors that would impede the blue-chip leader's progress in the short term, wrote Katie Townshend, MKM Partner's technical market analyst, in a note Tuesday.

In economic news, existing home sales came in lower than expected, falling to a 6.12 million unit annual rate in March from a 6.69 million unit rate in February. Economists thought sales would fall to a 6.45 million unit rate.

The Consumer Confidence index fell to 104 in April from a revised 108.2 in March. Economists surveyed by Briefing.com thought it would fall to 105.

Both reports seemed to play into worries about the pace of the economic growth slowdown, ahead of the first-quarter GDP report, due Friday.

IBM (up $3.89 to $99.10, Charts, Fortune 500) announced Tuesday that it was increasing its quarterly dividend to 40 cents per share from 30 cents per share. The company also said it has authorized an additional $15 billion for stock repurchases in addition to $1.4 billion that remained at the end of March from a previous authorization.

IBM shares jumped more than 4 percent.

Late Monday, Texas Instruments (up $2.68 to $35.09, Charts, Fortune 500) reported lower quarterly earnings and revenue that topped estimates. The chipmaker issued second-quarter earnings per share and revenue forecasts in a range that could meet or exceed analysts' expectations. TI shares jumped 9 percent Tuesday.

Fellow chipmaker Altera (up $1.77 to $23.09, Charts) reported higher quarterly earnings that beat estimates late Monday, sending shares higher Tuesday.

Dow stock DuPont (up $0.78 to $49.97, Charts, Fortune 500) reported higher quarterly sales and earnings Tuesday that topped estimates. Shares rose 1.5 percent.

Fellow Dow stock AT&T (down $0.66 to $39.11, Charts, Fortune 500) reported higher quarterly earnings that topped estimates Tuesday morning. But the stock slipped modestly amid some analyst concerns about its wireless customer growth numbers.

Amarin (down $2.96 to $0.82, Charts) slumped 80 percent in unusually active Nasdaq trading after the drugmaker said that its treatment for Huntington's disease was not shown to be effective in two late-stage trials.

Krispy Kreme (Charts) announced that Chief Financial Officer Michael Phalen was leaving the company and would be replaced by chief accounting officer Douglas Muir, sending shares down over 2 percent.

Market breadth was negative. On the New York Stock Exchange, losers beat winners by roughly 3 to 2 on volume of 985 million shares. On the Nasdaq, decliners topped advancers by almost 4 to 3 on volume of 1.5 billion shares.

U.S. light crude oil for June delivery fell $1.27 to $64.62 a barrel on the New York Mercantile Exchange.

COMEX gold for June delivery fell $2.22 to $692.00 an ounce.

Treasury prices rose, lowering the yield on the 10-year note to 4.63 percent from 4.65 percent late Monday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar was little changed versus the euro and gained versus the yen.