Stocks End With Muted Gains

The Nasdaq is the best performer, rising 0.6%.
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Updated from 4:02 p.m. EST

Tech and transportation stocks paced muted gains Tuesday as falling oil prices helped the market claw back from last week's rout.

The

Dow Jones Industrial Average

added 23.45 points, or 0.22%, to 10,712.22, while the

S&P 500

rose 3.04 points, or 0.24%, to 1266.86. The

Nasdaq Composite

closed up 16.78 points, or 0.75%, to 2265.25.

"Today we still saw lackluster trading as we work off concern over last week's decline," said Barry Hyman, equity market strategist with Ehrenkrantz King Nussbaum. "The market psychology has turned more cautious. We need a further backdown in energy prices as the fear of going through $70 a barrel is still holding us hostage."

About 1.86 billion shares traded on the

New York Stock Exchange

. Trading volume on the Nasdaq was 2.05 billion shares. Advancers outpaced decliners 2 to 1.

The 10-year Treasury bond was down 9/32 in price to yield 4.39%, and the dollar was higher against the yen and euro.

"We're in the throes of earning season, but still it's quiet," said Jay Suskind, head of equity trading with Ryan Beck & Co. "The market now has to come to grips with the strength of the economy and corporate earnings along with the

Federal Reserve

and commodity prices. But overall the market has held up well after Friday's sell off."

Last night, Federal Reserve Governor Mark Olson said the U.S. central bank is "watching very carefully the potential impact of inflation, and especially any price increases that would pass through to core inflation."

Late selling sunk oil, with crude for March delivery finishing down $1.04 at $67.06 a barrel. The contract, easing from five-month high, lost 38 cents on Monday as comments from two OPEC officials suggested the cartel won't cut production at a meeting next week in Vienna.

The decline in oil pressured the Philadelphia Oil Service Sector index, which finished down 1%. Meanwhile, the Dow Transportation index rose 2.4% to finish at a record high.

YRC Worldwide

(YRCW) - Get Report

was one of the best transportation gainers, gaining 3.9%.

To view Gregg Greenberg's video take of today's market, click here

.

The rest of Tuesday's tone was shaped by earnings, including reports from Dow components

3M

(MMM) - Get Report

,

McDonald's

(MCD) - Get Report

,

DuPont

(DD) - Get Report

,

United Technologies

and

Johnson & Johnson

(JNJ) - Get Report

.

McDonald's fourth-quarter earnings rose 53% to $608.5 million, or 48 cents a share, matching estimates on a 4% rise in revenue to $5.23 billion. The restaurant chain also set plans for a $1 billion share buyback program in the first quarter. The stock added 14 cents, or 0.4%, to $35.85.

Johnson & Johnson posted fourth-quarter earnings of $2.2 billion, or 73 cents a share, up from $1.2 billion, or 41 cents a share, a year ago. Sales were down 1.1% to $12.6 billion. Analysts were forecasting 73 cents a share and $13.2 billion. J&J was down $1.83, or 3%, to close at $59.36.

3M's profit rose 6% to $761 million, or 99 cents a share, while adjusted earnings of $1.04 a share were a penny ahead of views. Sales rose 4.5% to $5.33 billion, about $70 million south of estimates. The company had in-line guidance for the first quarter and year, but the stock slipped 2%. 3M slid $1.50, or 2%, to $74.20.

DuPont posted adjusted earnings of 13 cents a share, beating estimates by 3 cents but offered weak guidance for the first quarter and full year 2006. The company cited an expected decline in its agriculture and nutrition business. The stock fell 29 cents, or 0.7%, to $39.26.

United Technologies posted fourth-quarter earnings of $626 million, or 62 cents a share, up from $612 million, or 61 cents a share, a year ago. Excluding items, the company earned $721 million, or 71 cents a share. Revenue rose 14% to $11.26 billion from last year. The Thomson First Call consensus was for earnings of 70 cents a share on revenue of $11.1 billion. Shares were higher by $1.98, or 3.6%, to $56.45.

Lucent

(LU)

reported first-quarter operating earnings of 4 cents a share, matching estimates, while sales slid 12% from last year to $2.05 billion. Lucent finished up 3 cents, or 1.2%, to $2.53.

Last night,

Texas Instruments

(TXN) - Get Report

said fourth-quarter earnings rose 34% from a year ago to $655 million, or 40 cents a share, while sales rose 14% to $3.59 billion. Analysts had forecast 39 cents a share and $3.64 billion.

For the first quarter ending in March, Texas Instruments sees sales of $3.11 billion to $3.38 billion and EPS of 29 cents to 33 cents. The sales estimate excludes a business line TI is selling and isn't comparable with the Thomson First Call estimate of $3.46 billion. TI was lower by $1.01, or 3.2%, to finish at $30.69.

E*Trade

(ET) - Get Report

said fourth-quarter earnings rose 44% to $129 million, or 32 cents a share, while adjusted earnings of 30 cents a share beat estimates by a penny. Revenue rose 19% to $478.8 million, about $6 million short of estimates. E*Trade rose 10 cents, or 0.5%, to $22.22.

A day after

Ford

(F) - Get Report

said it would cut up to 30,000 jobs,

DaimlerChrysler

(DCX)

is outlining a management winnowing that could cut its executive ranks by 20%. The automaker hopes to save $1.8 billion a year. DaimlerChrysler climbed $2.60, or 5%, to $54.84.

Disney

(DIS) - Get Report

announced the acquisition of animation studio

Pixar

(PIXR)

after the close Tuesday. The all-stock deal is worth $7.4 billion and makes

Apple's

(AAPL) - Get Report

Steve Jobs the largest shareholder of Disney.

Disney tacked on 47 cents, or 1.8%, to $25.99, while Pixar was off 70 cents, or 1.2%, to close at $57.57. Both stocks were halted in the after-hours session for the announcement.

In other earnings,

Kimberly-Clark

(KMB) - Get Report

reported fourth-quarter net income of $371.1 million, or 79 cents a share, falling from $445.3 million, or 91 cents, a year ago. Excluding items, earnings were 95 cents a share, in line with the Thomson First Call consensus. Sales grew to $4.01 billion from $3.9 billion a year earlier. Kimberly-Clark lost $1.15, or 1.9%, to $58.56.

After the bell Tuesday,

Sun Microsystems

(SUNW) - Get Report

swung to a second-quarter loss of $223 million, or 7 cents a share, compared with a profit of $4 million, or break-even on a per-share basis, last year. Excluding items, the company lost 3 cents a share, compared with the Thomson First Call consensus of a loss of a penny a share. Revenue rose to $3.38 billion from $2.84 billion a year ago. The stock finished down 2 cents, or 0.5%, to $4.37.

On Wednesday, earnings reports are expected from

ConocoPhillips

(COP) - Get Report

,

BellSouth

(BLS)

,

Bristol-Myers Squibb

(BMY) - Get Report

,

WellPoint

(WLP)

and

Qualcomm

(QCOM) - Get Report

.

Among ratings moves, Goldman Sachs upgraded

Wal-Mart

(WMT) - Get Report

to outperform from in-line, saying it sees limited downside from current levels. The stock rose 47 cents, or 1%, to $45.72.

Rival

Target

(TGT) - Get Report

said late Monday it expects January same-store sales to come in at the high end of its earlier projections. Target gained $1.50, or 2.8%, to $54.25.

The gains in Wal-Mart and Target sent the S&P Retail index up 1.4%. Elsewhere, the Philadelphia Housing Sector index closed up 0.7%, the Philadelphia Semiconductor Sector index added 1%, and the Philadelphia/KBW Bank Sector index was higher by 0.3%.

Overseas markets were mixed, with London's FTSE 100 down 0.5% to 5634 and Germany's Xetra DAX losing 0.3% to 5334. In Asia, Japan's Nikkei rose 1.9% overnight to 15,649, and Hong Kong's Hang Seng gained 0.4% to 15,531.