NEW YORK -- U.S. stocks were mixed yesterday as a drop in chemical shares countered gains in technology issues. Concern that corporate earnings growth will slow later this year held the market back.
Although major market gauges all eked out gains to new highs, more stocks fell than rose on the New York Stock Exchange. About 11 stocks declined for every 10 that advanced.
Chemicals led the declines after Rohm & Haas Co. told analysts late Tuesday that it probably won't surpass its record second-quarter profit of a year ago because of a weakening economy. The warning fanned concerns that earnings growth has stalled and taken the fuel from a six-month rally in stocks.
"Investors have to give some attention toward a slowdown in earning progress," said Peter Canoni, managing director at Aeltus Investment Management Inc., which oversees $5 billion in equities. "We've talked to a few companies recently and things have turned sluggish. People are less sanguine about earnings prospects to come."
The Dow Jones industrial average rose 6.57, to a record 4,491.08 after falling as much as 20.75 points at midday and spending most of the session in negative territory. Gains in International Business Machines Corp., Goodyear Tire & Rubber Co. and Philip Morris Cos. offset losses in Walt Disney Co., DuPont Co. and Boeing Co.
Among chemical issues, DuPont fell 87.5 cents, to $65.375; Rohm & Haas slipped $1.875, to $52; Dow Chemical Co. gave up 37.5 cents, to $69.875; Monsanto Co. slid $1.625, to $89.125; Great Lakes Chemical Corp. fell $1, to $57; and Hercules Inc. dropped 50 cents, to $49.50.
Among broader market indexes, the Standard & Poor's 500 index closed up 0.42, at a record 536.47, after sliding as much as 2.22 points earlier. The Nasdaq composite index rose 1.49, to a record 895.72, after slipping as much as 3.21 points earlier. It was the index's ninth gain in the last 11 days and its second straight all-time high. Shares of Intel Corp., Applied Materials Inc., Sybase Inc. and DSC Communications Corp. rose the most.
More than 331 million shares traded hands on the NYSE. The three-month daily average is 337.54 million.
Technology shares got a boost when Sybase's shares jumped $3.50, to $28.50, amid speculation the computer networking company might be bought by Sun Microsystems Inc., Microsoft Corp. or IBM. Microsoft declined to comment, while officials at the other firms weren't available for comment.
Also helping was the outlook for moderate economic growth, which boosts the attraction of technology companies. Their profits are expanding as more consumers and businesses try to boost their productivity and may be less affected by the general slowdown, traders said.
"We're seeing a general trend away from hard-core manufacturing and into information processors," said Douglas Myers, vice president of trading at Interstate/Johnson Lane Inc.
Shares of Intel rose $1.50, to $112.50; Applied Materials Inc. jumped $3.25, to $81; DSC Communications Corp. added $1.56, to $39.94; Xilinx Inc. spurted $2.75, to $90; and KLA Instruments Corp. moved ahead $1.50, to $72.25.
Shares of companies whose profits rise and fall with the economy -- so-called cyclical stocks -- slid as evidence of an economic slowdown grew. The latest sign of sluggish growth was a Commerce Department report showing inventories atU.S. businesses increased in April as weak consumer demand caused sales to drop.
The Morgan Stanley cyclical index of 30 stocks fell as much as 2.88, to 323.12, before closing down 0.33, at 325.67.