updated 4/25/2007 8:01:15 AM ET 2007-04-25T12:01:15

The Dow Jones industrial average set a new intraday high Tuesday, but closed the session just short of the 13,000 milestone, as investors digested disappointing housing and consumer confidence data and a raft of stronger-than-expected quarterly earnings.

Major Market Indices

The market spent most of the session narrowly mixed, but picked up momentum in mid-afternoon. Investors seemed to lose some of the earlier caution they adopted after the National Association of Realtors reported sales of existing homes in March had their biggest one-month decline since January 1989. Also, the Conference Board reported consumer confidence fell more than expected in April due to higher gas prices and broader economic concerns.

Robust first-quarter earnings reports have been driving the market higher over the past week, allowing the Dow to approach 13,000, and there were more upbeat results cheering the market on Tuesday: from U.S. military contractor Lockheed Martin Corp., Dow industrials AT&T Inc. and Dupont Co., and chip maker Texas Instruments Inc.

“A general optimistic tone related to better-than-expected earnings is what’s moving it,” said Richard E. Cripps, chief market strategist for Stifel Nicolaus, a broker based in St. Louis. However, “it’s not a market that’s necessarily very broad in its advance.”

He pointed out that the Dow’s strong gains in afternoon trading were driven by only a few companies, notably International Business Machines Corp. and Honeywell International Inc., which both made dividend announcements. Also, there were much smaller moves in the broader Standard & Poor’s 500-stock index and Nasdaq composite — which so far this year have risen by greater percentages than the Dow.

The Dow closed the seesaw session up 34.54 points, or 0.27 percent, having set a new intraday high of 12,989.86. The broader S&P 500 index finished the day down 0.52 point, or 0.03 percent, and the Nasdaq added 0.87 point, or 0.03 percent.

The Nasdaq is slightly above the halfway point to its record close of 5,048.62, while the S&P is just 3 percent below its record close of 1,527.46. Both records were reached in March 2000, at the end of the dot-com boom.

“Where I think you’ll get a lot more excitement is when the S&P pushes past the 2,000 level. That’s going to be a real event,” Cripps said.

Investors weren’t buying with abandon: Declining issues outnumbered advancers Tuesday by about 2 to 1 on the New York Stock Exchange, where volume came to 1.65 billion shares, roughly flat with Monday’s turnover.

“Everyone is remembering where we were a year ago, when we were all talking about Dow 12,000, and then the market ended up tanking in May,” said Matt Kelmon, portfolio manager of the Kelmoore Strategy Funds. “I think there’s just nervousness out there that this could again be the case, and there really isn’t a lot to propel the market with. You’ll see a new focus on data.”

Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.62 percent from 4.65 percent late Monday.

The U.S. dollar fell against other major currencies, with the euro close to its record high of $1.3667. Gold prices also fell.

Oil prices declined, with a barrel of light sweet crude down $1.30 at $64.59 on the New York Mercantile Exchange. There has been continued concerns about violence in Nigeria, a key oil producer, and the size of inventories of oil and gasoline in the U.S.

In earnings news, Texas Instruments surged $2.51, or 7.7 percent, to $34.92 after its first-quarter results surpassed Wall Street expectations. The world’s largest maker of mobile phone chips also provided better-than-expected financial projections for the year.

Lockheed Martin, the nation’s largest military contractor, reported quarterly profit rose 17 percent from the year-ago period. However, sales were weaker than expected, and its shares fell $2.25, or 2.3 percent, to $94.82.

AT&T reported profit doubled during the first quarter to beat Wall Street projections. However, shares fell 67 cents to $39.10 as growth in its wireless business lagged.

DuPont posted a 16 percent rise in first-quarter profit on higher sales of seeds and improved pharmaceuticals. Shares of the specialty chemicals maker rose 67 cents to $49.86.

IBM rose $3.28, or 3.4 percent, to $98.49 after the company increased its dividend payout by 10 cents and authorized an aggressive ramp-up of its share buyback program.

Honeywell rose $1.67, or 3.2 percent, to $52.90 after announcing late Monday a dividend of 25 cents a share.

Housing stocks moved broadly lower after the Realtors’ report showed the subprime mortgage sector’s problems pushed existing-home sales below what economists were expecting. DR Horton Inc. fell 6 cents to $22.53; Beazer Homes USA Inc. shed 15 cents to $33.23; and Lennar Corp. rose 8 cents to $43.24.

Overseas, Japan’s Nikkei stock average closed down 0.02 percent. At the close, Britain’s FTSE 100 was down 0.77 percent, Germany’s DAX index was down 0.89 percent and France’s CAC-40 was down 0.53 percent.

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