Dow closes at record, but Nasdaq dips
Tech-fueled index hit by TI, Tellabs, while broader market adds to recent highs; investors eye Fed meeting.
NEW YORK (CNNMoney.com) -- Corporate profit warnings dragged down the tech sector Tuesday, but the Dow Jones industrial average managed to close at another record high, extending its recent run.
The Dow Jones industrial average (up 10.97 to 12,127.88, Charts) added 0.1 percent, closing at a fresh all-time high; it reached an all-time intraday record of 12,133.80 earlier in the day. It was the 11th closing record in 16 sessions for the Dow.
The broader S&P 500 (up 0.36 to 1,377.38, Charts) index ended just above unchanged, and closed at its highest point since December 2000.
The tech-fueled Nasdaq composite (down 10.72 to 2,344.84, Charts) slid nearly 0.5 percent.
Stocks had struggled through the early afternoon, as investors eyed profit warnings from Texas Instruments and others, a flare-up in oil prices and the ongoing Fed policy meeting. However, the tone improved near the close, and the major gauges closed off the lows.
Company news continued to dominate Tuesday, with the earnings reporting in full swing. Among the highlights: Texas Instruments and Tellabs both disappointed with their forecasts, while DuPont and Amgen impressed with their results.
Federal Reserve policy-makers are meeting Tuesday and Wednesday to discuss the economy and interest rates. Most economists expect the central bank to keep its key short-term rate unchanged at 5.25 percent, as it has for the last two meetings, after raising rates 17 times in a row. A decision is expected Wednesday at around 2:15 p.m. ET.
But, as usual, investors will be more closely watching what the bankers hint at in their statement regarding the health of the economy, inflationary pressures and the future direction of interest-rate policy.
"They'll probably mention lower energy prices, quite possibly as a help for headline inflation and as a means of driving future growth," said Joshua Shapiro, chief economist at Maria Fiorini Ramirez Inc.
However, the overall message is unlikely to change much from the last meeting, Shapiro said, as the Fed will likely hold rates steady for some time.
"The Fed probably doesn't want to change market expectations much at this point," he said. "We don't think they will do anything until mid-2007 and at that point there will be modest easing."
Wall Street has been sprinting lately, near the end of another solid month, as investors respond to the drop in commodity prices, strong earnings and what appears to be the end of the Fed's more than two-year old rate-hiking campaign.
After that rally, Tuesday's market performance was actually fairly impressive, said James Awad, chairman at Awad Asset Management, noting that the day's earnings warnings could have sparked a bigger selloff.
"On balance, the earnings picture is strong, the Fed is not expected to surprise us tomorrow, and investors are going to try to keep moving the market higher through the end of the month," he said.
Texas Instruments (down $1.36 to $30.52, Charts) reported third-quarter revenue that missed Wall Street estimates and issued a disappointing outlook for its fourth quarter, after the close Monday. Shares of the world's No. 1 cell phone chip maker slid 4.3 percent Tuesday.
TI's results dragged on the broader chip sector, pulling the Philadelphia Semiconductor (down 5.10 to 444.45, Charts) index lower.
Tellabs (down $0.62 to $10.40, Charts) reported third-quarter earnings that topped estimates on revenue that missed estimates. The maker of gear for running telecom networks also issued a current-quarter revenue outlook that is short of estimates. Shares lost 5.6 percent in unusually active Nasdaq trade.
Chemical maker DuPont (up $0.55 to $46.00, Charts), a Dow 30 component, reported higher quarterly earnings that topped expectations, thanks to higher sales and lower fixed costs, although raw material costs surged. DuPont shares added 1.2 percent.
The rise in oil prices gave a boost to oil services stocks, lifting the Amex Oil (up 12.58 to 1,134.43, Charts) index by 1 percent.
Market breadth was mixed. On the New York Stock Exchange, winners edged losers nine to seven as 1.69 billion shares changed hands. On the Nasdaq, decliners topped advancers three to two as 1.92 billion shares traded.
Treasury prices inched higher, with the ten-year note yielding 4.82 percent, down from around 4.83 percent Monday. Prices and yields move in opposite directions.
In currency trading, the dollar inched higher against the euro and the yen.
U.S. light crude oil for December delivery added 54 cents to settle at $59.35 a barrel on the New York Mercantile Exchange.
COMEX gold for December delivery rose $4.70 to settle at $587.60 an ounce.