Dow carves out new 18-month high

By Alexandra Twin, senior writer


NEW YORK (CNNMoney.com) -- The Dow Jones industrial average ended at a fresh 18-month high and the rest of the market churned Tuesday as investors weighed a rise in consumer confidence, more weakness in the housing market and a stronger dollar.

The Dow Jones industrial average (INDU) added 11 points, or 0.1%, closing at 10,907.42, the highest finish since 11,143.13 on Sept. 26, 2008. The S&P 500 index (SPX) was little changed. The Nasdaq composite (COMP) added 6 points, or 0.3%.

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Stocks rose early in the session as investors welcomed a better-than-expected reading on consumer confidence and took in stride a report showing continued weakness in the housing market.

But the advance petered out near midday after an extended run-up over the last few weeks. Bank shares slipped, dragging down the KBW Bank (BKX) index by 0.8%.

The afternoon saw the major stock indexes bouncing around both sides of the unchanged line before finally turning higher in the last hour. Gains in 3M (MMM, Fortune 500), Verizon Communications (VZ, Fortune 500) and Hewlett-Packard (HPQ, Fortune 500) gave the Dow a boost.

Stocks have risen in six of the last seven weeks as investors looked past worries about a global debt crisis and instead focused on signs of an economic recovery. On Monday, the government said personal spending rose for the fifth month in a row.

The market is in a bit of a tug-of-war right now, with Greece and other euro zone debt issues, questions about higher interest rates, higher taxes and the deficit all on the negative side, said Alan Lancz, president at Alan B. Lancz & Associates.

But Lancz said that on the positive side are the economic strength, the improvement in earnings and, in the short term, the impact of end-of-quarter rebalancing, which tends to bring in new money.

"Consumer confidence today was better than expected, and while that's not enough to be a catalyst for the market, it is enough to keep the tug-of-war going," he said.

The major indexes are also struggling with those 18-month highs, he said. The Dow ended at an 18-month high Tuesday and the Nasdaq and S&P 500 ended at 18-month highs a week ago.

Economy: The Consumer Confidence index rose to 52.5 in March from 46.4 in February, according to a report from the Conference Board, released shortly after the start of trading. Economists expected the index to rise to 51.

Home prices fell in January, according to the S&P/Case-Shiller 20-city index released in the morning. Prices eased 0.4% in January from December levels and were down 0.7% from year-earlier levels, in line with estimates. Prices in December fell 3.1%. After rising for five straight months, prices have now fallen for four in a row.

Apple: Shares of the company surged to an all-time high Tuesday after the Wall Street Journal said late Monday that the company is developing an iPhone for the Verizon (VZ, Fortune 500) network. Currently, the iPhone is only available on the AT&T (T, Fortune 500) network. Apple (AAPL, Fortune 500) shares gained 1.5%, AT&T shares lost 2.1% and Verizon shares added 3%.

The dollar and commodities: The dollar gained versus the euro and the yen, pressuring dollar-traded gold prices. However, oil prices still managed gains.

COMEX gold for May delivery fell $6.80 to settle at $1,103.50 per ounce.

U.S. light crude oil for May delivery rose 20 cents to settle at $82.37 a barrel on the New York Mercantile Exchange.

Bonds: Treasury prices tumbled, raising the yield on the 10-year note to 3.87% from 3.86% late Monday. Treasury prices and yields move in opposite directions.

World markets: In overseas trading, European markets were mixed. Asian markets ended higher, with Hong Kong's Hang Seng index up 0.7% and Japan's Nikkei index up 1%. To top of page

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