NEW YORK -- U.S. stocks barely rose for the third straight trading day amid concern the Federal Reserve is ready to raise interest rates at a time when the economy already shows signs of slackening.
The Dow Jones industrial average moved in the narrowest range in more than eight months.
"The market is suffering from inertia and interest-rate anxiety," said Alan Ackerman, research director at Reich & Co. As long as concern persists that rates will rise faster than corporate profits, "nobody's in a hurry to buy stocks."
The industrial average closed up 6.80, at 3,741.84, and moved in a range of 12.30 points. That matched the range of Nov. 11, 1993, and was the smallest since an 11.1-point range Sept. 28. On Friday, the average rose 2.59 points.
The Standard & Poor's 500 index rose 1.14, to 454.25, extending Friday's 0.50-point gain. The Nasdaq composite index rose 0.20, to 716.88, after advancing 1.65 Friday.
Health care, drug, and tobacco companies, whose profits aren't so susceptible to economic downturns, were among the biggest gainers in the S&P; 500.
Pfizer rallied $1.625, to $61.625; Johnson & Johnson rose $1.375, to $46.75; Bristol-Myers Squibb Co. gained 75 cents, to $52.25; and Eli Lilly & Co. gained 25 cents, to $48. Pfizer and Johnson & Johnson both released stronger-than-expected second-quarter earnings last week.
Pharmaceutical companies also benefited from the perception that Congress won't pass any health-care reform package this year, traders said. In addition, dividend yields of more than 5 percent on American Home, Bristol-Myers and Eli Lilly may have drawn investors, analysts said.
"Some people may be buying these things for the yield," said Stephen Buermann, a drug analyst at Merrill Lynch & Co.
Oil shares, meantime, declined amid lower-than-expected earnings from Exxon Corp. and Texaco Inc. Mobil, whose earnings exceeded estimates, dipped 37.5 cents, to $84.50, and Chevron Corp. fell 37.5 cents, to $43.75. Atlantic Richfield Co. fell 87.5 cents, to $107.
Exxon's second-quarter earnings fell 14 percent amid lower crude prices early in the quarter. The nation's largest oil company's earnings fell to 70 cents a share from 98 cents a year ago, and were below the consensus estimate of 74 cents among analysts surveyed by Zacks Investment Research. Exxon rose to $58.25, up 37.5 cents.
Mobil's second-quarter profit from operations declined 1.1 percent, primarily because of low oil prices and poor international refining margins.
Texaco's earnings from operations tumbled to 35 cents a share from $1.11 a year ago, lagging the consensus estimate of 64 cents. Its shares closed unchanged, at $63.
The Russell 2000 index rose 0.02, to 243.35, and the Wilshire 5000 index gained 6.18, to 4487.95. The American Stock Exchange market value index rose 0.61, to 434.06.
Stock prices haven't moved much since Wednesday, when Fed Chairman Alan Greenspan told a Senate panel the U.S. central bank may have to raise interest rates for a fifth time this year to keep inflation in check. He repeated that view to a House committee Friday.
Higher rates make stocks less attractive than some fixed-rate investments that are perceived as safer. They also raise the cost of borrowing, which hurts future corporate profits and stems consumer spending on autos and houses.
"The interest-rate creep-up is putting a damper on things," said Jim Benning, a trader at BT Brokerage.
Advancing stocks were even with decliners on the New York Stock Exchange. Trading was sluggish, with about 212 million shares changing hands on the NYSE, the fewest since July 1, when 197 million shares traded.