U.S. stocks closed mostly lower Tuesday in a volatile session whipped by concern that rising share prices aren't justified by corporate earnings prospects.
The Dow Jones industrial average snapped its steepest one-month advance in nearly five years, closing down 19.38 points at 6,528.41. At one point, the Dow was off more than 50 points.
Although relatively minor, the retreat was the largest point decline for the Dow since late October, underscoring the blue-chip barometer's almost uninterrupted ascent this month. The Dow had jumped 76 points Monday for its first close above 6,500.
Most broad stock measures also ended slightly lower Tuesday, although the Nasdaq composite index of mostly smaller stocks inched up 0.83 point to a record 1,281.20.
The Nasdaq index's gain, however, wasn't indicative of a further broadening of the November rally, but rather was the result of gains in a relative handful of big Nasdaq names.
Wall Street's advance has been fueled by blue-chip stocks over the last month. Analysts have been hoping to see buying interest spread to smaller issues as well, and that appeared to be happening on Friday and Monday.
But on Tuesday, losers had a 23-18 edge over winners on Nasdaq and a 14-12 edge on the New York Stock Exchange.
Trading volume on the NYSE surged to 540 million shares, highest since July.
Stocks jumped in the morning as bonds rallied on the latest economic news, briefly sending long-term bond yields to their lowest level since early March.
In another sign that economic growth may be moderating enough to contain inflation, the Conference Board said its consumer confidence index held steady in November.
The yield on the bellwether 30-year Treasury bond briefly fell to near 6.36% on Tuesday from Monday's 6.42%.
But profit taking pushed the bond's yield back to 6.44% by the close of trading.
"Investors are very nervous, and that's reflected in the action of the market," said Peter Anderson, chief investment officer at the IDS Advisory Group in Minneapolis. "They're afraid not to be in it but scared to be in it. One hour they're more afraid than greedy, the next hour they're more greedy than afraid."
Among Tuesday's highlights:
* The market got bad news from Deere, which slumped 2 5/8 to 44 after it said quarterly earnings rose less than expected. Other heavy-equipment firms also lost ground. Caterpillar fell 2 to 78 1/8 and Case lost 1 1/4 to 52 5/8.
* The Dow's biggest decliners included many of the high-fliers of recent weeks. General Electric fell 1 3/4 to 102 and Procter & Gamble lost 1 1/2 to 109 3/8.
On the flip side, Walt Disney was the Dow's strongest issue, rising 2 1/2 to 76 after the company reported a sharp gain in quarterly profit, beating expectations.
* Deere's disappointing earnings and Disney's strong report may have pushed more investors into consumer-products companies whose earnings growth tends to be more stable. Gillette rose 5/8 to 74 3/4, Premark gained 1 to 24 1/8, American Home Products jumped 1 7/8 to 63 1/8 and Unilever gained 2 1/2 to 174 3/8.
* Among technology issues, IBM rose 3/8 to 158 after trading as high as 160 3/4. IBM's board authorized a $3.5-billion stock buyback. IBM shares have been trading at their highest point in more than nine years for several days.
Texas Instruments jumped 4 3/8 to 60 7/8 after it signed a 10-year cross-licensing agreement for semiconductor patents with Samsung Electronics, after a delay of almost a year as the two wrangled over terms of the accord.
Dell Computer fell 2 to 99 3/4 after the computer maker's rating was cut to "hold" from "buy" by brokerage CS First Boston.
San Ramon, Calif.-based Mecon plunged 8 1/8 to 6 7/8 after the software company said it will report a loss in its fiscal third quarter as it reshuffles top management and moves its corporate headquarters.
* Texaco lost 1 1/2 to 100 1/2 amid concern over a boycott against the company sparked by anger over widely published racist comments made by corporate executives.
* Fleetwood Enterprises tumbled 4 1/2 to 31 3/4 after the company said it is seeing less demand for both its recreational vehicles and manufactured homes and that sales in the third quarter are running behind last year's pace.
Yet Fleetwood rival Coachmen Industries jumped 1 1/8 to 26 3/4.
* Among the day's initial public offerings, Omaha-based West Teleservices rose 3 7/8 to 21 7/8 from its initial offering price amid investor enthusiasm for companies that provide telemarketing services.
But Clifton, N.J.-based Linens 'n Things was little changed, rising 1/8 to 15 5/8 in its first day of trading, on skepticism that the household-goods retailer can win customers from powerhouse rival Bed Bath & Beyond, which lost 3/8 to 26 1/4.
In the municipal bond market, the Metropolitan Water District of Southern California sold $377 million in new revenue bonds. Demand for the bonds was brisk enough to allow the district to pay lower-than-expected yields.
Investors were eager for the new securities on a day when few were for sale. "We were the only game in town today. That certainly helped us," said Bert Becker, the district's chief financial officer.
Underwriter PaineWebber priced the AA-rated tax-free bonds to yield up to 5.57% on the issue maturing in 2037.