Updated from 4:05 p.m. EDT
Blue-chips ended mostly flat Tuesday following Monday's big rally, but tech stocks posted solid gains.
Dow Jones Industrial Average
finished up 6.30 points, or 0.07%, at 9223.09, while the
gained 25.79 points, or 1.5%, to 1746. The
gained 3.42 points, or 0.3%, to 1007.84. The 10-year Treasury note was lower, with the yield at 3.75%.
Volume on the
was 1.5 billion shares, with advancers ahead of decliners by 18 to 13. On the Nasdaq, almost 2 billion shares changed hands, with winners beating losers by a 2-to-1 margin.
Among sectors seeing the most activity, biotechs rose 2.3% and computers climbed 1.8%, while telecoms rose 0.8% after being down for most of the day. At the NYSE, financials rose 0.6%, while utilities lost 0.6%.
"We are beginning to sort out whether yesterday's advance represents a new breakout for the markets which could extend the advance or just a last gasp for the bulls," said Ken Tower, chief market strategist at CyberTrader. "In terms of market internals, there's been a lot of cooling off on the bull side, with signs of diminishing upside strength," Tower added. He noted the 10-day moving average of the total number of stocks in the NYSE making six-month highs is down to 130 from 491 on June 12, and from 708 on June 4.
Another cautious note came from David Rosenberg, chief North America economist at Merrill Lynch, who wrote in his daily report: "Is the Nasdaq rally for real? All but 11 of the Nasdaq 100 are up year-to-date and just about two in every three are beating the S&P 500's advance this year. Half of the top 10 winners this year lost money in the first quarter and in all of 2002. Is it really a good thing to have excitement replace nervousness this quickly?"
In merger news, data-storage equipment maker
said it's acquiring
for $1.3 billion in stock in a bid to strengthen its position in the software business. EMC also said it expects to meet or beat analysts' estimates for its second-quarter earnings on strong revenue. EMC shares fell 50 cents, or 4.3%, to $11.24, while Legato shares advanced 79 cents, or 8.7%, to $9.89.
made a $2.2 billion all-cash hostile bid for
, a deal that could create the world's largest maker of axles for trucks. ArvinMeritor shares slid 65 cents, or 3.1%, to $20.34, while Dana shares gained $4.20, or 35%, to $16.22.
, which was scheduled to announce earnings Tuesday. On Monday, the company received news that it could face a big rival if
$3.91 billion hostile bid for
goes through. Alcoa shares rose 7 cents, or 0.3%, to $25.78.
said second-quarter profit fell 5.8% as soft drink sales lagged because of the unusually cool spring weather. Nonetheless, shares climbed $1.55, or 7.5%, to $22.28.
Harry Potter couldn't keep
from issuing a fourth-quarter profit warning late Monday. The company said results, which were finalized before the release of the new Potter book, will miss analysts' expectations because of weaker sales at book fairs. Goldman Sachs downgraded the stock to in line from outperform, based on questions about management's ability to control costs. The shares closed $1.04 lower, or 3.7%, to $27.30.
Research analysts were also active, with Lehman Brothers upgrading
to overweight from equal weight on expected strength in the company's core enterprise networking business. Shares rose 96 cents, or 3.4%, to $29.51.
Merrill Lynch reduced 2003 and 2004 profit estimates for
, while Smith Barney cut its 2003 earnings projections for
. Honeywell shares lost 6 cents, or 0.2%, to $28, while Eastman Kodak fell 26 cents, or 0.9%, to $27.39.
In the pharmaceutical sector, Swiss health care group
said it bought the rights to market
cancer drug Avastin in all countries outside the U.S. Genentech will continue to market the product in the U.S. The company's shares ended up $1.07, or 1.4%, at $76.62.
Overseas markets had a mixed session, with London's FTSE 100 down marginally at 4073 and Germany's Xetra DAX up 0.1% to 3335. In Asia, Japan's Nikkei closed 1% higher at 9898, while Hong Kong's Hang Seng gained 1% to 9992.
Crude oil for future delivery was little changed, while the dollar was stronger against the yen and euro.