NEW YORK -- Expectations that today's producer price report will ease concern about inflation helped U.S. stocks advance yesterday for the fourth straight session.
Meantime, a strong earnings report from Intel Corp. fueled gains in computer shares. Drug and auto makers weakened amid declines in Ford Motor Co., Merck & Co. and Pfizer Inc.
The Dow Jones industrial average, which traded between 3,514.97 and 3,526.04, closed up 3.32 at 3,524.38. Gains in International Business Machines Corp., Caterpillar Inc. and J. P. Morgan outweighed declines in Walt Disney Co. and Aluminum Co. of America.
Broader market averages also closed higher. Standard & Poor's 500 Index added 0.85 to 448.98, and the Nasdaq Combined Composite Index rose 1.24 to 707.05. The American Stock Exchange Market Value Index climbed 3.73 to 438.10.
Stocks were little changed most of the day. Investors were loathe to make big bets on the market before this week's inflation reports, traders said. Only about 203 million shares changed hands on the New York Stock Exchange, the fewest since 197 million shares traded on May 24.
"People are waiting for the numbers to see which way they want to go and how aggressive they want to be," said Peter DaPuzzo, senior managing director at Cantor, Fitzgerald & Co.
The inflation reports have gained importance in recent days because a weather-related surge in commodity prices last week rekindled concern about a rising inflation rate, traders said.
The Labor Department is scheduled to report the producer price index this morning, and the consumer price index tomorrow. Economists polled by Bloomberg Business News expect the PPI slipped 0.2 percent in June, while the CPI posted a 0.1 percent gain.
Advancing stocks outnumbered decliners 10 to 9 on the New York Stock Exchange.
"It seems like the market has geared itself for positive inflation reports" this week, said James Solloway, director of research at Argus Research.
"If the PPI's not down, it's going to be a real shocker," said Edward Collins, executive vice president of institutional trading at Daiwa Securities America. "It could really rock the bond market, which would cause ripples in the stock market."
Treasury bonds were higher yesterday on falling commodity prices and expectations that this week's reports will reveal a declining inflation rate. The benchmark 30-year bond closed up 7/32, driving the yield to a record low of 6.62 percent, surpassing the previous low of 6.625 percent set last Tuesday.
Intel, Western & Pacific Resources, Wang Laboratories, Home Shopping Network and Gerant Industries Inc. were the most actively traded stocks on the U.S. composite.
Intel, which rallied 4 percent last week in anticipation of second-quarter earnings, closed down 37.5 cents at $55.625 even after the semiconductor maker reported a 167 percent surge in profits for the latest quarter. The stock tumbled as low as $53 before recovering.
Intel's second-quarter earnings soared to $1.30 a share from 50 cents a year ago, thanks to vigorous demand for personal computers powered by Intel microprocessors. The results were below the high end of analysts' expectations.