NEW YORK – Stocks ended slightly higher Tuesday amid a slowdown in economic and corporate news, as many investors kept to the sidelines waiting for tech bellwether Cisco's earnings report.
The Dow Jones industrial average (search) was up 8.87 points, or 0.08 percent, at 10,724.63. The Standard & Poor's 500 Index (search) was up 0.58 point, or 0.05 percent, at 1,202.30. The Nasdaq Composite Index (search) was up 4.65 points, or 0.22 percent, at 2,086.68.
After the closing bell, technology bellwether Cisco Systems Inc. (CSCO) fell more than 2 percent to $17.74. The company said quarterly earnings rose, benefiting from higher sales, but revenue was less than Wall Street expected.
"We've seen some real money put back to work. The action in general is pretty healthy, and I think we continue to trend higher," said Scott Lynch, managing director of U.S. trading at CSFB. The gains were led by technology shares, specifically the semiconductor stocks, he said.
The dollar hit a two-month high against the yen and held a near three-month peak versus the euro as the market cheered U.S. efforts to cut its massive deficits. A stronger dollar can help stocks because it makes U.S. equities more attractive to investors.
Meanwhile, U.S. oil prices fell to about $45 a barrel on Tuesday, pressured from signs that OPEC would not cut production until its March meeting and on forecasts of rising U.S. crude stockpiles. A barrel of light crude closed at $45.40, up 12 cents, on the New York Mercantile Exchange (search). Falling oil prices eases concerns that higher energy costs will pinch corporate profits and curb consumer spending.
Analysts were not alarmed by the rangebound trading, particularly after the market's relatively strong showing last week following a lackluster January. A slight pullback might be what's needed for stocks to move forward, said Todd Clark, head of listed equity trading at Wells Fargo Securities.
"We've got some benefit from the recent pullback in crude but we haven't been able to add to last week's advance, partly because of the fact that the market has not been performing so well year to date, and there's some reluctance among people who don't quite believe in the rally," Clark said. "But overall, I think this is constructive. We're consolidating last week's gains and I expect the market will turn higher."
With little new economic data available this week, earnings reports have taken on additional importance. Cisco's networking products are practically ubiquitous in most technology settings, and its profit picture was expected to weigh heavily on the sector. Cisco's net income rose 93 cents from a year ago, but its revenues fell short of expectations. Shares of Cisco added 8 cents to $18.24 during the session, then tumbled 61 cents to $17.63 in electronic after-market trading minutes after its earnings were released
Shares of semiconductor companies rose after an analyst with SG Cowan said the inventory buildups that have plagued chip makers abated in the fourth quarter. Dow component Intel Corp. (INTC) rose 50 cents to $23.41, while rival Advanced Micro Devices Inc. gained 42 cents to $17.64.
EBay Inc. (EBAY) climbed almost 4 percent, or $2.94 to $78.53, and supported the Nasdaq after J.P. Morgan made bullish comments about the online auctioneer even as it removed eBay from its list of recommended stocks.
Aluminum producer Alcan Inc. (AL) lost 94 cents to $38.08 after dropping to a loss in the fourth quarter, spurred by large one-time charges related to acquisitions and currency exchange. The company blamed higher material costs and a weak U.S. dollar for the disappointing quarter.
Pfizer Inc. (PFE) rose about 3.4 percent to $25.77 as the world's largest drug maker said its experimental drug for a deadly form of stomach cancer proved safe and effective in a late-stage trial.
"Today, some stocks are coming off their lows — you've had the bounce in eBay," said Robert Drust, managing director of listed trading at regional investment bank Wedbush Morgan in Los Angeles. "It just seems like another quiet day, at least trading wise."
Dow component McDonald's Corp. (MCD) said sales at stores open at least a year rose 5.2 percent in January. Slower growth in U.S. stores was offset by strong sales in Europe and Asia. McDonald's slipped 6 cents to $32.72.
Hotel chain Marriott International Inc. (MAR) reported a 12 percent rise in quarterly earnings, fueled by a strong showing in its conference and group lodging efforts. Marriott, which beat analysts' estimates by 4 cents per share, nonetheless slid 76 cents to $65.74 on a weak 2005 outlook.
Stun-gun maker Taser International Inc. (TASR) tumbled 11.28 percent, or $1.94, to $15.22, after missing Wall Street's expectations by 2 cents per share despite a sharp rise in fourth-quarter profits and a 79 percent jump in sales.
Nike (NKE) fell 2.6 percent, or $2.25 percent to $83.95 after brokerage Merrill Lynch cut its rating on the U.S. athletic shoe and sportswear maker to "neutral" from "buy."
Trading was active, with 1.41 billion shares changing hands on the New York Stock Exchange, just below the 1.46 billion daily average for last year. About 1.93 billion shares were traded on Nasdaq, above the 1.81 billion daily average last year.
Advancers outnumbered decliners on the New York Stock Exchange by about 9 to 7 and by about 8 to 7 on Nasdaq.
The Russell 2000 index of smaller companies was up 2.10, or 0.3 percent, at 638.72.
Overseas, Japan's Nikkei stock average fell 0.08 percent. In Europe, Britain's FTSE 100 added 0.32 percent, France's CAC-40 lost 0.03 percent and Germany's DAX index rose 0.12 percent.
Reuters and the Associated Press contributed to this report.
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