updated 2/9/2005 9:50:29 AM ET 2005-02-09T14:50:29

Investors cautiously bid stocks narrowly higher Tuesday, cheered by a recovering dollar and moderating oil prices. Volume was light, however, as many investors kept to the sidelines waiting for Cisco Systems Inc.’s earnings after the session.

Major Market Indices

The dollar struck a two-month high against the Japanese yen, but fell against the euro after two days of gains, while oil prices hovered near $45 per barrel. A barrel of light crude closed at $45.40, up 12 cents, on the New York Mercantile Exchange.

Wall Street’s focus, however, was on Cisco, and that kept many investors from making large bets during trading hours. The networking giant’s fourth-quarter profits were in line with Wall Street expectations, which ended up disappointing investors.

“Cisco is of course a benchmark, and I think investors are hoping that these earnings will tell them something about the economy,” said Sam Lieber, president of the Alpine Funds. “Still, you have to look at the overall picture. Cisco is a part of that, but it’s not what it used to be.”

According to preliminary calculations, the Dow Jones industrial average rose 8.87, or 0.1 percent, to 10,724.63.

Broader stock indicators also moved slightly higher. The Standard & Poor’s 500 index was up 0.58, or 0.05 percent, at 1,202.30, while the Nasdaq composite index gained 4.65, or 0.2 percent, to 2,086.68.

Analysts were not alarmed by the rangebound trading, particularly after the market’s relatively strong showing last week following a lackluster January. A slight pullback might be what’s needed for stocks to move forward, said Todd Clark, head of listed equity trading at Wells Fargo Securities.

“We’ve got some benefit from the recent pullback in crude but we haven’t been able to add to last week’s advance, partly because of the fact that the market has not been performing so well year to date, and there’s some reluctance among people who don’t quite believe in the rally,” Clark said. “But overall, I think this is constructive. We’re consolidating last week’s gains and I expect the market will turn higher.”

With little new economic data available this week, earnings reports have taken on additional importance. Cisco’s networking products are practically ubiquitous in most technology settings, and its profit picture was expected to weigh heavily on the sector. Cisco’s net income rose 93 cents from a year ago, but its revenues fell short of expectations. Shares of Cisco added 8 cents to $18.24 during the session, then tumbled 61 cents to $17.63 in electronic after-market trading minutes after its earnings were released

Shares of semiconductor companies rose after an analyst with SG Cowan said the inventory buildups that have plagued chip makers abated in the fourth quarter. Dow component Intel Corp. rose 50 cents to $23.41, while rival Advanced Micro Devices Inc. gained 42 cents to $17.64.

Aluminum producer Alcan Inc. lost 94 cents to $38.08 after dropping to a loss in the fourth quarter, spurred by large one-time charges related to acquisitions and currency exchange. The company blamed higher material costs and a weak U.S. dollar for the disappointing quarter.

Hotel chain Marriott International Inc. reported a 12 percent rise in quarterly earnings, fueled by a strong showing in its conference and group lodging efforts. Marriott, which beat analysts’ estimates by 4 cents per share, nonetheless slid 76 cents to $65.74 on a weak 2005 outlook.

Stun-gun maker Taser International Inc. tumbled 11.28 percent, or $1.94, to $15.22, after missing Wall Street’s expectations by 2 cents per share despite a sharp rise in fourth-quarter profits and a 79 percent jump in sales.

Dow component McDonald’s Corp. said sales at stores open at least a year rose 5.2 percent in January. Slower growth in U.S. restaurants was offset by strong sales in Europe and Asia. McDonald’s dropped 36 cents to $32.42.

Advancing issues slightly outnumbered decliners on the New York Stock Exchange, where volume was moderate.

The Russell 2000 index of smaller companies was up 2.10, or 0.3 percent, at 638.72.

Overseas, Japan’s Nikkei stock average fell 0.08 percent. In Europe, Britain’s FTSE 100 added 0.32 percent, France’s CAC-40 lost 0.03 percent and Germany’s DAX index rose 0.12 percent.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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