NEW YORK (CNN/Money) - The Dow Jones industrial average's latest flirtation with 10,000 ended happily on Valentine's Day Thursday as hints of economic stability were enough to offset losses in drug stocks.
By a two-point margin, the Dow posted its first five-digit finish since Jan. 10, returning to a threshold first passed nearly three years ago.
But unlike 1999's "Dow 10,000" euphoria, investors listened to former Enron employee Sherron Watkins tell a congressional panel that top management knew about the financial problems that ultimately bankrupt the energy trader.
The Dow industrials rose 12.32 points to 10,001.99 while the Nasdaq composite index dipped 15.78, or 0.9 percent, to 1,843.38. The Standard & Poor's 500 index slipped 2.03 to 1,116.48.
Weekly job market data and a handful of corporate profit reports showed signs of improvement, helping the Dow to a fourth gain in five days even as tech stocks pulled back.
Computer products maker Hewlett-Packard and accounting software publisher Intuit both posted better-than-expected quarterly earnings. And new jobless claims fell once again last week, returning to levels last seen in August.
"You can build a case for an economic recovery, and you can build a case for earnings being much better in the second half of the year," said Donald Selkin, chief investment strategist at Joseph Gunnar, who still expects a choppy market ahead.
Despite the Dow's gain, more stocks fell than rose. On the New York Stock Exchange, declining issues topped advancing ones 8-to-7 as 1.2 billion shares changed hands. Nasdaq losers edged winners 3-to-2 with 1.6 billion shares trading.
In other markets, the dollar fell against the yen and euro. Treasury securities rose.
Ups and downs
Among Dow gainers, American Express (AXP: up $0.57 to $34.58, Research, Estimates), enjoyed an upgrade from J.P. Morgan Chase, which raised it to "buy" from "market perform."
Investors also moved into 3M (MMM: up $1.09 to $116.90, Research, Estimates), Eastman Kodak (EK: up $1.08 to $29.15, Research, Estimates), and Honeywell (HON: up $0.70 to $34.00, Research, Estimates).
But drug stocks tumbled, including Johnson & Johnson (JNJ: down $0.61 to $57.30, Research, Estimates) and Merck (MRK: down $0.89 to $59.69, Research, Estimates).
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Hewlett-Packard (HWP: down $0.10 to $20.88, Research, Estimates) late Wednesday forecast that current-quarter sales will fall from the most recent quarter, a disclosure that may have weighed against news that fiscal first-quarter profit topped forecasts.
In gainers, Intuit (INTU: up $0.69 to $37.65, Research, Estimates), the accounting software maker, also beat estimates and raised its outlook for fiscal 2002.
NYSE's most active stock, Qwest Communications (Q: down $1.10 to $7.49, Research, Estimates), saw its credit rating cut by Standard & Poor's, which said the local telephone company faces "near-term liquidity concerns."
Tyco (TYC: down $2.15 to $26.75, Research, Estimates), a kind of weathervane for the accounting worries that have hammered stocks this year, fell anew. The conglomerate Wednesday lowered its profit outlook during a time when its shares have fallen more than 50 percent this year.
After the closing bell, Dell Computer (DELL: down $0.53 to $26.81, Research, Estimates) said fiscal fourth-quarter financial earnings came in at 17 cents a share, matching forecasts. By gaining market share, the No. 1 direct supplier of personal computers posted results nearly even with year-ago figures, a rare feat for a technology company.
Nasdaq's third-most active stock, Juniper Networks (JNPR: down $2.09 to $10.92, Research, Estimates), tumbled 16 percent. A market research firm said Juniper's share of the Internet communications equipment market tumbled 25 percent during the final three months of last year.
Despite the Dow's gain, it was unable to reach the 10,021.57 level needed to break even on the year. The Nasdaq's loss widened its 2002 decline to 5.5 percent.
And Joseph Gunnar's Selkin said the stock options market points to the kind of investor optimism that often presages a selloff. The ratio of puts, or options to sell, to calls, or options to buy, has been falling, a sign that the market may fall too.
"There's a lot of people who see that as a good time to take profits," he said.
Jobless claims dip
New government data showed that the number of Americans filing for new jobless claims fell by 8,000 to 373,000 last week, remaining below 400,000 for a sixth straight week, a sign of job market stability.
As for jobless claims figures, they are back to were they were in August, before companies cut hundreds of thousands of jobs following the Sept. 11 terrorist attacks.
But the unemployed may not be finding new work. Continued claims -- the number of people drawing benefits for more than a week -- rose slightly to 3.43 million in the week ended Feb. 2.
Separately, businesses continued to clear their shelves in December, as inventories dropped 0.4 percent. The 11th straight monthly decline could presage a pickup in new orders.
In the Enron scandal, Watkins told the House Energy and Commerce Subcommittee on Oversight and Investigations that executives knew of the off-balance sheet partnerships that hid questionable finances ultimately responsible for Enron's collapse.
Watkins' words counter testimony by Jeffrey Skilling, the former Enron chief, who in addressing lawmakers last week said he was unaware of company problems when he left in August.
The televised hearings have tended to unnerve investors worried about the honesty of corporate financial statements. But at least one market watcher is betting that those worries have passed.
"I think a lot of the bad news about Enron is behind us," Muriel Siebert, of Muriel Siebert & Co., told CNNfn's Market Call. 
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