NEW YORK -- U.S. stocks were mixed yesterday as optimism that the Federal Reserve is finished raising interest rates offset concern that slower economic growth will hurt corporate profits.
The prospect of smaller earnings gains helped shares of technology companies to rise for a ninth day, as investors bet businesses will look for ways to cut costs and become more efficient. One way they'll do that is buy computers and software.
"Technology is stealing the show," said Philip Orlando, money manager at First Capital Advisers. "A lot of companies are upgrading their technology to improve productivity so as not to RTC increase prices and lose market share."
International Business Machines Corp. added 75 cents, to $75; Compaq Computer Corp. gained 87.5 cents, to $37.75; and Informix Corp. rose $1.875, to $38.
Shares of semiconductor companies, which stand to gain if computer sales increase, also advanced. Intel Corp. rose 87.5 cents, to $77.50; Texas Instruments Inc. surged $3.375, to $78.375; and Micron Technology Inc. jumped $2.50, to $50.375.
The Dow Jones industrial average fell 2.69, to 3,932.68. It was the fourth straight day the Dow industrials closed no more than 10 points higher or lower than the previous day's close. Shares of AlliedSignal Inc., Walt Disney Co. and Coca-Cola Co. fell, while Aluminum Co. of America, IBM and AT&T; Corp. gained.
The 30-stock average is up 2.6 percent since Jan. 30 as the prospect of stable rates has boosted the attraction of stock returns. Gains have been muted the last three days, though, as some investors interpreted stable rates as a sign the economy is slowing and profit growth could decelerate.
"The market's been in a tug of war" between optimism about rates and concern about a slowing economy, said Greg Riley, director of over-the-counter trading at CS First Boston Corp.
That mixed outlook is reflected in the shares of Alcoa. The aluminum producer's stock was the biggest loser Wednesday among the Dow industrials, dropping $2, to $78. Yesterday, the stock jumped $1.875, to $79.875. Since closing at $89.125 on Jan. 13, the stock has traded as low as $77.50.
Among broad market indexes, the S&P; 500 index fell 1.0, to 480.19, after being as high as 482.0, its all-time closing high registered Feb. 2 a year ago. Shares of telephone, electric utilities and beverage companies fell, while telecommunication, semiconductor and computer issues gained.
The Nasdaq composite index, laden with technology stocks, rose 1.67, to 785.44 -- its highest since 786.69 on March 23. Shares of Intel, Tele-Communications Inc., American Power Conversion Corp. and Apple Computer rose the most.
Shares of Amgen rode a roller coaster, rising as much as $3.125 before closing down $4, at $66.75. The biotechnology company's shares gained amid speculation that Bristol-Myers Squibb Co. may soon announce an offer to buy the company for $90 a share, then fell after Bristol-Myers denied that it was in talks. Bristol-Myers' stock fell 25 cents, to $60.625.
Eleven stocks rose for every 10 that fell on the New York Stock Exchange, where about 325.6 million shares traded hands, compared with the three-month daily average of 314 million.
Among the companies reporting higher earnings, Sears shares rose 37.5 cents, to $48.375, bringing the stock's two-day gain to $2.625, or 6 percent. On Monday, the retailer said fourth-quarter profit from operations rose 4.6 percent, beating analysts' expectations.
Black & Decker Corp. climbed $1.25, to $25. The maker of home consumer products said fourth-quarter net income rose to 68 cents a share from 47 cents, beating mean estimates of 61 cents.