NEW YORK -- U.S. stocks were mixed yesterday amid gains in retail and health care shares and losses in technology issues. Expectations that falling interest rates will improve the outlook for corporate profits gave stocks a boost.
The Dow Jones industrial average rose 8.65, to 4,485.20, its 35th record close this year. The Dow industrials have gained 17 percent this year. In the 30-stock average, shares of Walt Disney Co., DuPont Co., United Technologies Corp. and Union Carbide Co. rose the most.
Retail shares climbed as some chains reported better-than-expected sales for May. Also helping was a report by Johnson Redbook Service that showed sales posted strong year-over-year gains in the first week of June. Clothing sales continued to improve and helped some department stores to beat their sales goals, the report said.
Shares of IBM rose 12.5 cents, to $91.375, after sinking $2.625 Monday, when it offered to buy Lotus Development Corp. Boeing Co., meanwhile, fell 87.5 cents, to $60.75, after Monday's $2.625 advance.
The Standard & Poor's 500 index fell 0.05, to 535.55, after being up as much as 1.49. Shares of health-care, retail and chemical companies rose yesterday, while semiconductor, software and bank companies fell.
Retailer Price/Costco Inc.'s shares rose 25 cents, to $14.25, after the company said sales rose 3 percent last month. Circuit City Stores Inc.'s shares added $1.125, to $27.625, after reporting a 13 percent sales jump. Meanwhile, Wal-Mart Stores Inc. climbed 37.5 cents, to $25.25.
AnnTaylor Stores Inc. surged 87.5 cents, to $21.875; Talbots Inc. added 25 cents, to $35.50; Toys 'R' Us Inc. gained $1.25, to $27.25; Woolworth Corp. jumped 62.5 cents, to $15.625; and Spiegel Inc. catapulted 62.5 cents, to $11.50.
The technology-laden Nasdaq composite index fell 3.45, to 879.40, after being up as much as 2.98.
Advancing stocks matched decliners on the New York Stock Ex
change, where more than 342.35 million shares traded hands.
"There's going to be a real tug of war this summer between the advantages of a weak economy -- lower rates -- and the disadvantages -- lower earnings," said Ricky Harrington, senior vice president and technical analyst at Interstate/Johnson Lane Inc.
Health-care, drug and beverage companies -- so-called defensive stocks because they post steady earnings in good times and bad -- gained as concern about the weakening economy grew, analysts said. That outlook was fueled recently by a report showing the U.S. economy unexpectedly lost jobs in May.
"We're still seeing a lot of accumulation in oil and defensive issues," said Susan Marker, a trader at Janney Montgomery Scott in Philadelphia. So far this year, the Morgan Stanley consumer stock index is up 16.8 percent, in line with the advance of the broader S&P; 500.
Among health-care issues, Abbott Laboratories rose 62.5 cents, to $39.75; Johnson & Johnson climbed 50 cents, to $66.375; Bristol-Myers Squibb Co. spurted 87.5 cents, to $68.125; and American Home Products Corp. added $1.125, to $76.
Among oil issues, Mobil Corp. climbed $2.25, to $101.375.
Some analysts said the concern over earnings is misplaced. Even if the Federal Reserve doesn't reduce interest rates at its next policy meeting July 5 to July 6, they said, the drop in interest rates this year will help fuel a rebound in the economy.
Yesterday, the benchmark 30-year bond gained about 1/4 , or $2.50 per $1,000 bond. That put its yield at 6.5 percent, a 15-month low and down from 7.88 percent at the end of 1994.
Technology stocks fell a day after rallying on speculation that more mergers and acquisitions would follow in the wake of IBM's bid to acquire Lotus. The Philadelphia Semiconductor Index yesterday fell 9.53, to 437.97 as Texas Instruments Inc. dropped $5, to $117; Intel slid $3.375, to $112.375; Applied Materials Inc. shed $1.75, to $80; and Cypress Semiconductor Corp. gave up $1.125, to $33.875.