Stocks Mixed, Bonds Weak Despite Economic News

Stocks ended mixed Tuesday as investors took profits after last week’s record-setting rally and bonds weakened despite fresh news of subdued inflation.

The dollar drifted lower.

The Dow Jones industrial average fell 11.31 points to 7,760.78 after rebounding from a sell-off of nearly 70 points. In the broader market, losers narrowly beat gainers in heavy trading on the New York Stock Exchange.

But the Nasdaq composite index hit a record high for the third consecutive session, rising 11.16 points to 1,443.11, thanks to gains in technology issues, especially in the computer sector, where profits are expected to improve in the second quarter. Intel rose 2 21/64 to 149 11/16, Dell Computer rose 5 1/2 to 120 7/8 and Microsoft rose 2 13/16 to 134 3/16.

Among Dow components, IBM rallied 5/8 to 89 7/8 and Hewlett-Packard advanced 3/4 to 53 3/4.

The Standard & Poor’s composite index of 500 stocks rose 0.53 point to 894.43, a new high. The NYSE composite index rose 0.08 point to 465.09.

The market was in a profit-taking mode despite the relatively benign consumer price index report for May, which showed that prices inched up 0.1% as inflation remained dormant.

“Investors began to realize that today’s numbers are not a significant change in the landscape of what we’ve seen,” said Hugh Johnson, chief investment officer at First Albany Corp. “They don’t mean the economy did not slow or that the [Federal Reserve Board] will raise interest rates next month.”

The price of the 30-year Treasury bond fell, boosting its yield to 6.71% from 6.69% at Monday’s close.

Overseas, Tokyo’s Nikkei stock average fell 0.4%, Frankfurt’s DAX index fell 0.6% and London’s FTSE-100 was down 1.3%.

In currency trading, the dollar ended at 1.7305 German marks, off from 1.7315 on Monday, and at 113.32 Japanese yen, off from 113.52.

Coffee prices jumped as monthly stock figures reawakened concern about tight supplies and halted a three-week slump.

At New York’s Coffee, Sugar and Cocoa Exchange, coffee for July delivery closed 12.20 cents higher per pound at $2.0870, still more than $1 below the 20-year high of $3.18 per pound set in late May.