NEW YORK — The stock market finished mixed Tuesday in heavy trading, after being whipsawed through the session by bouts of profit taking and amid disappointment with IBM's earnings for the fourth quarter.
The Dow Jones average of 30 industrial stocks closed 1.97 points higher at 2,104.47, its 13th straight gain. The closely watched indicator had dropped by around 10 at one time during the afternoon.
Although only a minor gain, Tuesday's increase extended the Dow industrial average's string of consecutive increases to its longest ever.
Broader market indicators, on the other hand, ended lower.
Big Board volume totaled 224.79 million shares, up sharply from 162.83 million on Monday, when participation was reduced by the Martin Luther King holiday and the strike against the Long Island Rail Road. A total of 4,422 blocks of 10,000 or more shares were traded, up from 3,238 the day before.
The rounds of selling to collect profits that punctuated Tuesday's trading had been widely expected on Wall Street, because of the remarkable intensity of the rally that kicked off 1987. But observers pointed out that the market had a lot more difficulty Tuesday overcoming the profit taking than it had on Monday, when it had roared back to catapult the Dow industrial average above the 2,100 mark for the first time. The change raises the question of whether this year's record-breaking rally may be running out of steam.
Trimming Market's Sails
Lew Smith, an analyst for Bear, Stearns & Co., said the disappointing IBM earnings "trimmed the market's sails a bit." The computer giant, which is a component of the Dow Jones industrial average, announced fourth-quarter earnings early in the session that were considered slightly worse than expected. IBM shares fell 2 1/2 to 122 3/4.
"The market's just losing a little bit of the tremendous zip it had. But it's going to take a lot to throw it into a negative mode," Smith said.
Salomon Inc., the Big Board's volume leader yesterday, slumped 5 1/8 to 39.
The trading company's chairman has said the company expects its fourth-quarter earnings to be about 40% below those of a year earlier.
Owens-Illinois, which said it would meet with potential suitors to discuss its sale, rose 3/8 to 59 3/8 in heavy trading.
Bond prices rose.
The Treasury's 30-year issue was up 7/16 point, or nearly $5 per $1,000 face amount.
In the secondary market for Treasury bonds, prices of short-term governments were up 1/32 point to 3/32 point higher, intermediate maturities ranged 1/8 point to 3/16 point higher and long-term issues were up point, according to Telerate Inc.
In corporate trading, industrials rose point in active trading and utilities were unchanged.
Among tax-exempt municipal bonds, general obligations were unchanged in light trading and revenue bonds were up 3/8 point.
Yields on three-month Treasury bills rose 1 basis point to 5.35%. Six-month bills fell 3 basis point to 5.34% and one-year bills were off 3 basis points at 5.37%.
The federal funds rate, the interest on overnight loans between banks, traded at 6.0625%, up from 5.9375% late Friday.