Dow's Record Bid Stalled

The industrials close just short of their best-ever finish.
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Updated from 4:20 p.m. EDT

Gains in

Johnson & Johnson

(JNJ) - Get Report

and

Coca-Cola

(KO) - Get Report

lifted the

Dow Jones Industrial Average

within striking distance of its all-time closing high Tuesday, but the blue-chip average came up just short of a record.

At the end of trading, the Dow had added 52.58 points, or 0.41%, to 12,773.04, having briefly topped its best-ever finish of 12,786.64 earlier in the session. Of the 30 members of the index, 20 were higher, led by increases in J&J and Coke, both of which rose after their quarterly earnings reports.

Coke climbed $1.30, or 2.6%, at $51.57, and J&J advanced $1.53, or 2.4%, to $64.55.

Before the opening bell, Coke said first-quarter earnings topped analysts' estimates by a penny on revenue that jumped 17% from last year to $6.1 billion.

J&J's first-quarter earnings fell to $2.6 billion, or 88 cents a share, from $3.3 billion, or $1.10 a share, a year ago. However, adjusted results topped the Thomson First Call analysts' consensus of $1.05 a share.

Meanwhile, the

S&P 500

rose 3.01 points, or 0.2%, to 1471.48, and the tech-heavy

Nasdaq

slipped 1.38 points, or 0.05%, at 2516.95.

Volume and breadth painted a different picture of the session. About 2.95 billion shares changed hands on the

New York Stock Exchange

, with decliners beating advancers by a 9-to-8 margin. Volume on the Nasdaq reached 1.95 billion shares, with losers outpacing winners 3 to 2.

"The lack of breadth was poor, so leadership in this case has narrowed," warned Edgar Peters, chief investment officer with Pan Agora. "In the near term, that's a sign that we're close to a top. It may lead to nothing, but it's something to be concerned about."

Still, the major indices have completely rebounded from losses suffered on Feb. 27, when a benchmark index in mainland China sank more than 9% and pressured U.S. markets. The Dow had its worst single-day pullback since the market reopened after the terrorist attacks of Sept. 11, 2001, dropping by as much as 546 points at one point.

For the year, the Dow has now added 2.5%, the S&P 500 has risen 3.7%, and the Nasdaq has pieced together a gain of 4.2%.

Helping the overall mood were positive data on inflation and the housing sector. The Labor Department's consumer price index for March showed no big surprises. The CPI was up 0.6%, matching expectations. The core index, which excludes food and energy prices, rose 0.1%, slightly below estimates.

Core inflation, a closely monitored figure, is now up 2.5% over the past 12 months, down 0.2 percentage points from February's level. The data follow the recent producer price index, which rose a greater-than-expected 1% last month. The core PPI was unchanged.

Elsewhere on the economic docket, the government said U.S. housing starts jumped 0.8% in March to 1.518 million annualized units. Building permits also rose 0.8%, to 1.544 million, last month. On average, economists expected March starts to total 1.50 million, and for permits to dip to a 1.51 million annual pace.

"The March uptick is a bit of a surprise, but the trend is still clearly downward, and we expect a renewed softening in April," said Ian Shepherdson, chief economist with High Frequency Economics. "With a huge inventory overhang, there is no reason for homebuilders yet to do anything but cut back further."

Peter Morici, a professor at the University of Maryland School of Business and former chief economist at the U.S. International Trade Commission, noted that core consumer price inflation remains above

Federal Reserve

Chairman Ben Bernanke's target range of 1% to 2%, adding that relief from this inflation isn't likely before fall of this year.

"The Federal Reserve will not likely be able to accomplish both moderate inflation and reasonable

gross domestic product and employment growth," he said. "Faced with choosing between instigating a recession or an inflation spiral it cannot much slow, the best policy course will be to do nothing."

In other economic news, the Fed said industrial production fell 0.2% in March, compared with estimates of a 0.1% rise. Capacity utilization declined to 81.4% from a revised 81.6%, also below expectations.

Treasury prices rose following the data. The 10-year note ended up 13/32, yielding 4.68%, and the 30-year bond was adding 22/32, yielding 4.84%. The dollar was lower against the world's major currencies.

Traders digested the latest torrent of earnings reports. Aside from Dow members, many financial names were also out with results.

Wells Fargo

(WFC) - Get Report

,

SunTrust Banks

(STI) - Get Report

,

KeyCorp

(KEY) - Get Report

and

Regions Financial

(RF) - Get Report

all topped estimates.

U.S. Bancorp

(USB) - Get Report

, however, came in below the consensus target. Shares lost 34 cents, or 1%. to $34.56.

After Tuesday's close, three tech heavyweights released their results.

IBM

(IBM) - Get Report

posted a first-quarter profit of $1.84 billion, or $1.21 a share, up 8% from the year-ago quarter and in line with expectations.

Intel

(INTC) - Get Report

also matched forecasts for first-quarter earnings.

Yahoo!

(YHOO)

posted stronger-than-expected earnings, but a revenue miss sent shares sliding after hours.

Away from stocks, commodities lost momentum and finished lower on the day. Crude oil futures fell 51 cents at $63.10 a barrel, and gold gave back $1 to $693.50 an ounce.

Overseas, stocks were mixed in Asia and in Europe. Tokyo's Nikkei shed 0.6% to 17,527, while Hong Kong's Hang Seng tacked on 0.2% at 20,789. London's FTSE lost 0.3% at 6499, and Frankfurt's Xetra DAX was up 0.2% at 7349.