NEW YORK (CNNfn) - The Dow industrials charged ahead to their fourth straight record, as investors' newfound taste for cyclical stocks and distaste for technology issues once again dominated trading on Wall Street Thursday.
Solid earnings reports released by some traditional industrial blue-chip companies, continued to attract buyers for the stock of established industrial giants like Boeing, Caterpillar and International Paper. At the same time, mixed bottom lines in the high-tech sector, produced mixed share prices.
"It looks like a major paradigm shift in the market," said Joseph McAlinden, chief investment officer at Morgan Stanley Dean Witter Funds. (277K WAV) or (277K AIFF)
The Dow Jones industrial average gained 51.06 points to close at 10,462.72, an all-time high. Market breadth on the New York Stock Exchange was positive, with advances leading declines 1,761 to 1,274 on very heavy volume of 1.1 billion shares.
The Nasdaq Composite, battered Wednesday by concerns about profit growth in the technology sector, regained some footing late in the session, rising 14.90 points to 2,522.18. The S&P 500 index lost 5.59 to 1,322.85.
The bond market fell as a hefty corporate debt supply calendar weighed down on Treasury prices. The bellwether 30-year bond lost 7/32 of a point in price, for a yield of 5.52 percent.
The dollar overcame early weakness against the yen, rising against both the Japanese currency and the euro.
Techs: Perfection already priced in
In stocks, investors continued to shy away from the technology sector, formerly the market's undisputed leader. Fears that profit growth in the computer industry is slowing down sparked deep tech selling Wednesday, some of which continued a day later.
Not even stronger-than-expected operating profits from Apple Computer (AAPL) and a narrower-than-predicted loss at Advanced Micro Devices (AMD) could soothe investors' concerns that technology shares have outpaced their fundamentals.
Shares of Apple inched up 7/32 to 35-3/4 after defying the general computer decline Wednesday. AMD, however, gained 1-11/16, or more than 11 percent, to 16-7/16.
Intel (INTC), AMD's main competitor and the world's largest computer-chip maker, which a day earlier delivered a mixed earnings report, edged up 1-7/16 to 58-7/16 after two days of solid selling.
Investors had already priced strong profits into high-tech stocks, said Bryan Piskorowski, vice president and market analyst at Prudential Securities. As such, the market has built up almost impossible expectations for the sector, making it increasingly difficult for all but the best earnings reports to meet the mark.
Industrial profits get hot
Manufacturers and other heavy-industry companies reclaimed the spotlight Thursday, casting off the digital shadow of technology as investors rotated funds back into cyclical stocks.
Shares of automakers, one of the market's more traditional sectors, got mixed reviews from Wall Street even though their earnings came in above expectations.
Ford (F) edged up 1/16 to 62-13/16 after its first-quarter earnings beat expectations and revenue rose to a record.
But rival and Dow component General Motors (GM) fell 3-3/16 to 86-9/16 even after reporting results that were well above forecasts and a record first quarter.
Aerospace giant Boeing (BA) also surged on the back of its earnings report, climbing an uncharacteristic 3-11/16 to 41-11/16.
Also helping the Dow blaze its record trail, International Paper (IP) climbed 3-1/8 to 55-3/8 and Alcoa (AA) firmed 9/16 to 53-13/16, both extending their own earnings-inspired rallies. Alcoa, the world's largest aluminum producer, got an extra boost from Morgan Stanley Dean Witter, which upgraded the stock to "neutral" from "underperform."
Transports lose altitude
Transportation stocks returned to positive ground after a strong morning followed by a midday slump. The sector's choppy performance came on the heels of Wednesday's stunning climb, their second-largest one-day advance in history.
The Dow transports index rose 1-/25 to 3,453.57.
Shares of Delta Air Lines (DAL) sank 3-3/16 to 68, even though the company's profits beat analyst estimates. BT Alex. Brown downgraded the stock to "market perform" from "buy." AMR (AMR), the parent of American Airlines, dropped 2-3/4 to 66-1/4, and UAL (UAL), the parent of United Airlines, shed 4-5/16 to 77-3/4.
Trucking stocks, however, still found buyers, with CNF Transportation (CNF) climbing 2-1/4 to 40-1/16 after getting an "accumulate" recommendation from Merrill Lynch. US Freightways (USFC) added 3-1/32 to 33-5/32 after getting an upgrade to "long-term buy," also from Merrill Lynch.
E-broker stocks miss boat
Meanwhile, earnings in the financial sector continued to roll in well above expectations, as Internet brokers joined their traditional Wall Street brethren in reporting strong results. But stock prices in the sector headed south, falling prey to profit taking after days of strong advances.
Leading the pack, Web broker Ameritrade (AMTD) shed 11-3/8 to 136-5/8. Late Wednesday, the company reported a record fiscal second quarter, with earnings of 14 cents a share, twice the market expectations.
Charles Schwab (SCH) saw its shares tumble 14-1/4, or more than 10 percent, to 124 even after reporting a record first-quarter profit, double what it earned a year earlier. The nation's largest discount and Web broker said it earned 34 cents a share in the quarter, a penny more than Wall Street had bet on.
Among more traditional investment firms, Donaldson, Lufkin & Jenrette (DLJ) shares fell 7-15/16 to 85-1/16 after it reported that profit had slipped, but not as much as analysts had expected.
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-- by staff writer Malina Poshtova Zang with Robert Scott Martin