NEW YORK (CNN/Money) - U.S. stocks were mixed Tuesday as blue-chip weakness pushed the Dow Jones industrial average to a second day of losses, while enthusiastic tech investors nudged the Nasdaq to a modest gain.
Positive forward-looking statements from chipmaker Altera and BMC Software were outshined by a warning from No. 1 media company AOL Time Warner, ho-hum quarterly results from Dow component Alcoa, and some negative forward-looking news in the financial and wireless sectors.
The Nasdaq composite rose 18.64 to 2,055.74. The Dow Jones industrial average fell 46.50 to close at 10,150.55. The Standard & Poor's 500 was down 4.18 to end the day at 1,160.71.
"We've been in a narrow range all day with light buying, but this is to be expected at the beginning of the new year," Larry Lawler, head of stock trading at Dreyfus Corp., told CNNfn's Street Sweep.
But Lawler added that the resilience of the big-cap tech names, such as Sun Microsystems and Intel, is a good sign for the Nasdaq and for the broader market.
"There will still be some company specific woes over the next few weeks, but if this kind of leadership continues, that would bode well for the markets," Lawler said.
Asian stocks closed lower, while European bourses finished mixed. The dollar was flat against the euro and higher against the yen.
Treasury prices were modestly lower, with the 10-year note yield up at 5.08 percent. Light crude oil futures fell 26 cents to $21.22 a barrel in New York.
Market breadth was positive. On the New York Stock Exchange, advancers edged decliners as nearly 1.23 billion shares changed hands. On the Nasdaq, winners beat losers 4-to-3 as 1.85 billion shares traded.
Chips and boxes lead
Networking issues, chipmakers and computer software makers were among the stocks bolstering the Nasdaq, while the Dow was hurt by financials and a few other select names.
Among the companies boosting the tech sector was specialty chipmaker Altera (ALTR: up $1.02 to $24.92, Research, Estimates). It said fourth-quarter revenue will decline 7 percent from the third quarter, but believes the weakness in the sector may have bottomed.
BMC Software (BMC: up $0.87 to $21.00, Research, Estimates) said late Monday that it expects fiscal third-quarter earnings of 7-to-9 cents per share, topping current estimates of 6 cents per share.
But Western Wireless (WWCA: down $5.88 to $19.75, Research, Estimates) warned that it expects to add fewer subscribers than expected in the fourth quarter and that financial results will slip below those achieved in the third quarter.
Simplex Solutions (SPLX: down $4.25 to $14.51, Research, Estimates), a maker of software for chip design, was unusually active after the company warned that it sees breakeven results in its first quarter versus current expectations for earnings of 3 cents. Following the news, both Credit Suisse First Boston and Robertson Stephens downgraded the stock.
Computer maker Gateway (GTW: down $2.56 to $7.69, Research, Estimates) said late Monday it expects to report a return to profitability for the fourth quarter before taxes and charges, but also expects revenue to be below analysts' current estimates.
AOL Time Warner (AOL: down $0.68 to $32.00, Research, Estimates), CNN/Money's parent, warned late Monday that it expects "cash flow" earnings of less than 10 percent, when previous estimates called for double-digit percentage growth. Cash flow refers to earnings before interest, taxes, depreciation and other items. The company also expects to take a $40 billion-to-$60 billion charge.
"People are trying to figure out what the real-world implications of AOL's announcement are," said Douglas Altabef, managing director at Matrix Asset Advisors.
Morgan Stanley issued a note on construction equipment maker and Dow component Caterpillar (CAT: down $1.80 to $51.35, Research, Estimates), saying that proposed fines by the Environmental Protection Agency on non-compliant engine emissions cloud the outlook for the company's earnings. While news of the fines is not new, the firm said the financial implications have become more apparent of late.
Before the open of trade, aluminum maker Alcoa (AA: down $0.82 to $37.34, Research, Estimates) became the Dow's first December quarter reporter. The company said its operating earnings were 11 cents a share, a penny better than expected but far worse than the 45 cents a share earned one year earlier. But the news was shrugged off by the market.
"What companies report now is less influential than what they say about future quarters," Altabef said.
In other corporate news, brokerage Goldman Sachs (GS: down $3.25 to $92.50, Research, Estimates) was under pressure from a Financial Times report that Sumitomo Mitsui, Japan's second-largest bank, will sell its remaining 1.8 percent stake in the investment bank. The news seemed to pressure fellow Dow components Citigroup (C: down $1.89 to $49.50, Research, Estimates) and J.P. Morgan (JPM: down $0.30 to $38.60, Research, Estimates).
Biotech firm IDEC Pharmaceuticals (IDPH: Research, Estimates) said the Food and Drug Administration delayed marketing approval for Zevalin, the company's treatment for non-Hodgkin's lymphoma, due to compliance issues.
Automaker General Motors (GM: down $0.85 to $49.76, Research, Estimates) said it will offer early retirement incentives to thousands of white-collar workers in hopes of cutting about 5,000 jobs, or 10 percent of its 50,000 white-collar staff. The news comes one day after rival Ford Motor Co. (F: up $0.06 to $16.56, Research, Estimates) announced a restructuring that will result in thousands of job cuts. 
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