By Mark Cotton, MarketWatch

    Jan 10, 2006

    U.S. stocks ended mixed Tuesday as the Nasdaq Composite recovered from
early weakness, but disappointing earnings from Alcoa Inc. saw the Dow Jones
Industrial Average log a small loss for the session, and its first for the
year.
    The Dow industrials put in a fractional loss, ending down 0.32 point at
11,011.58. The benchmark index, however, held onto the 11,000 mark, which it
breached for the first time in more than four and a half years on Monday.
    The Nasdaq Composite Index rebounded from a session-low of 2,303.93, to
end up 1.63 points at 2,320.32.
    The S&P 500 Index slipped 0.46 point to 1,289.69.
    Investors largely overcame their disappointment over Alcoa's disappointing
fourth-quarter performance as the session drew to a close.
    "Early this morning everyone was in a tizzy over Alcoa, but to extrapolate
from Alcoa to the U.S. corporate environment is ludicrous," said Lincoln
Anderson, managing director and chief investment officer at LPL Financial
Services. "They're a very specialized operation compared to corporate
America."
    On the broader market for equities, advancers gained an 18 to 15 advantage
over decliners on the New York Stock Exchange, and led by 17 to 12 over losers
on the Nasdaq.
    Volume was 1.73 billion on the Big Board, and 2 billion on the Nasdaq.

    Oil, bonds, dollar, gold
    Crude futures ended little changed as traders weighed mild U.S. weather
and news that Iran will resume nuclear research against expectations for a
climb in U.S. crude inventories.
    The benchmark February contract ended down 13 cents at $63.37 a barrel in
New York trading.
    Treasurys prices ended lower, pushing up yields as an unusually heavy
amount of new issuance in the corporate market prompted selling of government
instruments.
    The benchmark last ended down 14/32 at 100 19/32 with a yield of 4.43%.
    The dollar was flat against the euro, and slightly lower against the yen
in morning trading, as market participants tried to sort through conflicting
signals on whether China will diversify its currency reserves away from the
greenback.
    The euro was flat at $1.2078. Against the Japanese yen, the greenback
dipped 0.1% at 114.40.
    Gold futures fell sharply as some investors chose to consolidate gains
after the precious metal tapped a quarter-century high in overnight trading.
Gold for February delivery ended down $4.80 at $545.70 an ounce.
    On the data front, inventories at U.S. wholesalers rose 0.4% in November,
the Commerce Department said Tuesday. The gain was in line with expectations,
according to a survey of economists conducted by MarketWatch.

    Street cheers strong Apple revenue
    Apple Computer Inc. rallied as much as 7.7% to $81.89 after Chief
Executive Steve Jobs said the company had revenue of $5.7 billion for the
quarter ended in December, higher than the $5.04 billion expected by analysts
surveyed by Thomson First Call.
    Speaking to an audience at the company's Macworld conference in San
Francisco, Jobs also said the company sold 14 million iPods and 1.25 million
Macintosh computers during the quarter, and that the company's retail stores
generated $1 billion in sales. The stock ended up 6.3% at $80.86.

    Dow stocks in focus
    Alcoa shares tumbled as much as 7.1% to $28.40 in morning trading, before
trimming losses. The world's biggest aluminum producer posted fourth-quarter
results that fell short of analyst expectations. The company blamed its weak
earnings on a long list of production outages, strikes and restructuring
costs. The stock ended down 3.2% at $29.60.
    Home Depot Inc. was the biggest percentage gainer on the Dow after the
home improvement giant agreed to buy Hughes Supply, a distributor of
construction, repair and maintenance products for $3.47 billion, in a move to
boost its presence in the market for professional supplies.
    Shares in Hughes Supply shot up 18.3% to $45.61 while Home Depot's stock
climbed 2.4% to $41.80.
    After gaining more 7% Monday, shares of General Motors Corp. slipped 35
cents to $22.06 after it announced sweeping up-front price cuts on most of the
models it is showcasing this week at the Detroit Auto Show.
    United Technologies Corp., another Dow component, fell as much as 1.3% to
$56.05 after broker Credit Suisse First Boston cut its recommendation on the
company to neutral from outperform as part of wider downgrade of the multi-
industry sector. The stock recovered in line with the broader market, ending
the session up 4 cents at $56.84.
    Shares in Verizon Communications tacked on 13 cents to $31.61 after broker
Bear Stearns upgraded the telecommunications giant to outperform from peer
perform, primarily on valuation.

    Other stocks standouts
    Phelps Dodge Corp. tumbled as much as 11% to $138 after the mining group
slashed its quarterly outlook, citing one-time charges linked to higher copper
prices. The stock trimmed losses to close out the session down 5.2% at
$146.58.
    Guidant shares reversed course to end higher, up 39 cents at $69.39 even
as the medical devices maker said its fourth-quarter sales will be about 15%
below year-earlier levels. The company also said it received a follow-up
letter from the Food and Drug Administration about a facility in St. Paul,
Minn.
    Boston Scientific Corp. and Johnson & Johnson are currently involved in a
takeover battle to acquire Guidant.

    This MarketWatch news update is provided to you courtesy of Thomson
Financial.

    This is Thomson Financial's Market Commentary, which is issued three times
daily; Pre-Open ( 9:00 a.m.), Post-Open (10:15 a.m.), and Close (5:00 p.m.).
The information herein is believed to be true and accurate.  We take no
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