Dow drops 20
despite IBM’s gain

NEW YORK -- Stocks were little changed today after pulling back from an early rally led by the technology sector, which had risen following an encouraging earnings report from IBM.

Just before the close on Wall Street, the Dow Jones industrial average fell 20.47 to close at 6,792.25, having surrendered an early 78-point gain. But without a huge gain by International Business Machines Corp., the blue-chip index would have lost about 60 points.

Decliners led advancers by a 10-to-9 margin on the New York Stock Exchange, with 1,162 up, 1,284 down and 883 unchanged. NYSE volume was 485.42 million shares vs. 489.25 million yesterday.

Broader measures ended mixed after retreating from an early advance and then hovering near yesterday's closing levels.

Technology shares and smaller-company issues outperformed the blue-chip sector.

The Standard & Poor's 500-stock list fell 2.46 to 771.18, and the NYSE's composite index dropped 1.09 to 403.62. The Nasdaq index rose 0.96 to 1,228.10, and the American Stock Exchange composite gained 0.59 to 543.95.

As expected, IBM reported a small drop in its first-quarter profits. But the results, released after yesterday's close, exceeded analyst forecasts and the computer maker's stock soared 8 percent, or the equivalent of about 40 Dow points. While investors did react favorably to IBM's results, there was little applause for the latest in a series of strong earnings reports from other members of the Dow.

Procter & Gamble Co. beat forecasts by a small margin, and AlliedSignal Inc. met expectations, but both were among the Dow's weakest issues.

For the second straight day, stocks were pressured by the bond market, where interest rates rose again amid worries that an impending flood of new economic reports might heighten investors' recent inflation worries. Next week's data includes key readings on wage levels and other employment costs that have a big impact on inflation.