NEW YORK -- U.S. stocks closed mixed yesterday as losses in technology shares undercut gains among shares of paper companies and consumer-goods makers.
A stronger dollar helped stocks, making U.S. shares more attractive to overseas investors and raising optimism that interest rates will remain stable.
Foreign investors are saying "hey, we've got a bottom on the dollar now. Let's use our strong Deutsche marks and yen to buy U.S. stocks," said Robert Stovall, president of Stovall/Twenty-First Advisers, which manages $1 billion in assets. The strengthening currency "may persuade foreign investors to stop selling stocks and start buying."
The Dow Jones industrial average reached 4,200 for the first time and set its fifteenth record this year, closing at a record 4,201.61, up 33.20. The index passed the 4,200 mark just seven days after it first closed above 4,100. International Paper Co., McDonald's Corp. and Procter & Gamble Co. led the gains.
International Paper led a rally in paper issues, as investors bet that an increase in paper prices will fuel earnings growth. The Purchase, N.Y.-based International Paper also was raised to intermediate-term "above average" from "neutral" by an analyst at Merrill Lynch & Co., Sherman Chao. Its shares jumped $1, to $75.875, their highest level since February 28.
A U.S. government report showing a decline in spending on construction projects in February boosted McDonald's, Procter & Gamble and other consumer stocks by providing evidence the economy is slowing. Consumer stocks generally perform well even when the economy slows. Morgan Stanley's Consumer index of 30 stocks, which is up 12 percent so far this year, rose 1.89 points, to 233.42.
The Standard & Poor's 500-stock index also closed at an all-time high, rising 3.41, to 505.26. Gains in electric, telephone and oil shares overshadowed losses in automobile, semiconductor and software stocks.
The Nasdaq combined composite index fell, though, declining 4.33, to 813.72. The technology-laden index was pulled down by losses in shares of Sybase Inc., Micron Technology Inc. and Applied Materials Inc.
By day's end, advancing shares outpaced declining stocks by more than 3-to-2 on the New York Stock Exchange. Some 330.6 million shares changed hands, up from 287.4 million yesterday.
Auto shares fell after General Motors Corp. and Chrysler Corp. announced Monday that vehicle sales fell 9 percent in March from March a year ago because of falling truck sales. General Motors stock fell $1.125, to $43.50; Chrysler's shares slipped $2.125, to $40, and Ford Motor Co. slid 50 cents, to $26.625.
Stocks got some help from a continuing recovery in the dollar, which began to bounce back Monday from its post-World War II low of 85.68 yen. At the close of trading in New York, the currency was up to 86.15 yen, from 85.85 yen Monday. It rose to 1.38 marks, from 1.37 Monday.
A rally in the bond market helped stocks, too. Yields on 30-year U.S. Treasury bonds dropped for a second day, to 7.37 percent, from 7.38 Monday. Lower interest rates ease borrowing costs and make stocks more attractive compared to bonds.
Lower yields also gave utility shares a lift. Investors look to utility stocks for high dividends competitive with the fixed-income returns of bonds. The Dow Jones utilities average of 15 stocks jumped 3.76 points, or 2 percent, to 191.73, the largest increase since April 20, 1994.
A plunge in Sybase shares led a decline in technology issues. Sybase shares plummeted $16.125, to $23. The company said after the New York stock market closed Monday it expects to earn between 3 cents and 6 cents a share in the first quarter -- well below forecasts of 27 to 28 cents. Sybase blamed slow sales of its database product System 10.