Nasdaq hits new 6-year high

NEW YORK (CNNMoney.com) -- The Nasdaq composite rose Tuesday, ending at a new six-year high, but the S&P 500 and the Dow industrials couldn't quite manage new all-time records.

Deal news and falling oil prices helped support stocks, but gains were limited by hesitation after the recent run and the ongoing trade talks between Treasury Secretary Henry Paulson and Chinese officials.

The Dow Jones industrial average (down 2.93 to 13,539.95, Charts) gave up a few points.The S&P 500 index (down 0.98 to 1,524.12, Charts) lost about a point and remained near its all-time closing high of 1,527.46 hit on March 24, 2000.

The tech-fueled Nasdaq composite (up 9.23 to 2,588.02, Charts) added 0.4 percent, ending the session at a new six-year high.

The Russell 2000 (up 6.27 to 839.92, Charts) small-cap index rose 0.8 percent and ended at a new all-time high.

Treasury prices slipped, raising the corresponding yields. The dollar gained versus other major currencies. Oil and gold prices slumped.

After the close, Alcan (Charts)'s board said its shareholders should turn down a $28 billion unsolicited offer from Alcoa (Charts, Fortune 500), saying the amount was too low.

Stock gains petered out by the close Monday as investors backed off after pushing the Dow industrials higher for 7 weeks straight. That hesitation spilled into Tuesday morning trading, although the Nasdaq found a little momentum in the afternoon.

"It's kind of the same thing we've been seeing, with M&A putting money back into the hands of investors and helping lift stocks," said Tim Hartzell, chief investment officer at Kanaly Trust Company.

He said that while the trend remains bullish, stocks could be a little choppy in the short term, with earnings pretty much done and the upcoming long holiday weekend looming.

All financial markets are closed next Monday for Memorial Day and many Wall Streeters will make a four-day weekend of it, skipping out Friday.

Ahead of that, reports on durable goods orders and the housing market will attract attention.

In corporate news, billionaire investor Kirk Kerkorian's Tracinda Corp. has offered to buy two properties owned by MGM Mirage: the Bellagio and CityCenter. MGM (up $17.03 to $79.98, Charts, Fortune 500) shares jumped 27 percent.

Fremont General (up $2.89 to $10.00, Charts) said it was selling its commercial real estate lending business to iStar Financial (up $1.79 to $47.60, Charts) for about $1.9 billion. Fremont shares surged 40 percent.

Research in Motion (up $7.06 to $159.06, Charts) shares jumped 4.6 percent on takeover talk, Reuters reported.

Honeywell (down $1.32 to $56.98, Charts, Fortune 500) said it would buy Dimensions International for $230 million. Honeywell shares slipped.

Among other movers, Advancis Pharmaceutical (up $0.37 to $3.10, Charts) rallied 13.6 percent in active Nasdaq trade after the Food and Drug Administration said it will review its treatment for strep throat.

Among other movers, Intel (up $0.36 to $22.99, Charts, Fortune 500), Applied Materials (up $0.27 to $19.17, Charts, Fortune 500) and Apple (up $1.56 to $113.54, Charts, Fortune 500) were among the heavily traded technology stocks boosting the Nasdaq.

Market breadth was positive. On the New York Stock Exchange, winners topped losers 6 to 5 on volume of 1.48 billion shares. On the Nasdaq, advancers beat decliners 3 to 2 on volume of 2.02 billion shares.

The Treasury Secretary, Paulson, and a group led by Chinese Vice Premier Wu Yi were meeting for trade talks, following similar discussions in Beijing at the end of last year.

Topics include the growing trade deficit with China, which hit $235 billion last year, in connection to its undervalued currency, the yuan. (Full story).

Also of interest: government forecasters have predicted a busier than average hurricane season this year, which could hurt the economy and drive up oil prices. The 2006 hurricane season was relatively mild compared to the disastrous 2005 season, in which hurricanes Katrina and Rita devastated the Gulf region.

U.S. light crude oil for June delivery fell $1.30 to $64.97 a barrel on the New York Mercantile Exchange.

COMEX gold for June delivery fell $3.90 to settle at $659.90 an ounce.

Treasury prices slipped, raising the yield on the 10-year note to 4.83 percent from 4.78 percent late Friday. Treasury prices and yields move in opposite directions.

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