GM Drives Dow to New Peak

Apple's (AAPL) iPods and Nokia's (NOK) cell phones made lots of noise and plenty of money lately. But bad news from Intel (INTC) and disappointment with eBay (EBAY) frustrated the many tech bulls. Bets on bloated commodity shares also didn't pan out, with Newmont (NEM) and Phelps Dodge (PD) sporting big dents.

The Dow advanced 64 points to 11343, while the Nasdaq slipped 8 to 2363. The S&P 500 rose almost 2 to not quite 1312.

But there were more losers than winners both on the Big Board and the Nasdaq. The final hour of trading saw little new net buying, unlike the market surge following Monday's deadline for 2005 retirement account contributions.

For all the crowing about the new Dow high, the leadership lineup looked distinctly defensive in nature, with utilities, health insurers and drug makers making up for some recently lost ground. Industrials, the cellular supply chain and beneficiaries of corporate tech investment gained as well.

Gold faded after a parabolic rise that peaked at $643 an ounce overnight. More recently, bullion traded at $622 an ounce, while white-hot silver tarnished 12%. The May crude contract expiring Friday slipped to $71.50 a barrel, while June crude cost an extra $1.75. Venezuelan strongman Hugo Chavez told reporters $100 a barrel might not be out of line.

The 10-year Treasury yield rose to 5.05%, near a four-year high. Many more mid-Atlantic manufacturers reported paying higher prices for raw materials, though most had not yet passed these costs along. The dollar gained as interest rates crept up and Janet Yellen kept quiet.

The sixth straight quarterly loss posted by GM was seen as a vast improvement over the much wider deficit from a year ago. The Detroit dinosaur lost $323 million net, and would have posted an operating profit without a billion-dollar charge for a union settlement that will cut healthcare costs in the longer run. Overseas sales rose, while business on the home turf saw a modest decline as GM managed to hold the line on pricing.

"I think this quarter indicates that we've taken tough measures," the boss told CNBC. "We've got good strategies, they're yielding the results." GM has recently sold off a controlling interest in its main moneymaker, GMAC, as well as minority stakes in two Japanese partners. The company needs the cash to avert a strike at Delphi, or else to get through a stoppage if its bankrupt main supplier fails to strike a new deal with the union.

Apple shares rebounded as well, after the iPod maker rang up a 41% profit surge on booming sales of the portable music players. The 8.5 million iPods sold paled next to the 14 million units peddled in the prior holiday quarter, but the bottom line still beat Wall Street's consensus by a healthy margin. PC sales rose just 4%, but Apple expects that business to pick up as it completes the transition to Intel chips in its machines. The company's guidance for the next three months came to be seen as suitably conservative, even as it fell shy of Street estimates.

Nokia also posted an upside surprise, ringing up a 28% revenue rise by selling 40% more phones than a year ago. Consumers in India and China proved especially receptive to low-cost handsets, but demand for high-end models rose as well. And unlike rival Motorola (MOT), Nokia was able to translate that sales strength into unexpectedly bountiful earnings.

Intel (INTC) was saved by low expectations that had prepared Wall Street for its bleak second-quarter sales outlook. Revenue could fall to as little as $8 billion, the low end of the forecast trailing current estimates by an awkward 10%. The recent quarter was nothing to write home about, with a 5% sales drop driving the 38% decline in profits as chip prices tumbled. "What you're seeing is a little bit of an economic stall," said the CFO. But cuts in capital spending and the intensifying search for other savings implied growing recognition of an internal crisis, as the top chip maker loses fans on Wall Street and customers to rival AMD (AMD).

EBay (EBAY) painted a brighter picture but also paid a higher price when that outlook fell shy of expectations. Revenue grew 35% in the most recent quarter, but that's expected to slow to as little as 24% over the next three months notwithstanding the rapid growth of the Paypal payment processor and of the internet telephony supplier Skype. In a bid to spur growth, eBay last year agreed to pay up to $4 billion for Skype, which is aiming for revenue of $200 million this year.

Investors preferred the formula at EMC (EMC), as the top data storage supplier racked up a 14% sales increase and tripled its annual share buyback to $3 billion. They liked the Street-beating 24% profit increase by the slot machine maker International Game Technology (IGT) better still.

Two big drug makers posted improved results, with Schering Plough (SGP) topping estimates by a dime a share as sales of a cholesterol drug swelled. Merck (MRK) posted a gain as well, despite flat sales. But both companies continued to face the challenge of patent expirations and generic competition, with Merck additionally burdened by umpteen thousand Vioxx lawsuits.

Apple's decision to exclude PortalPlayer's (PLAY) chips from newer iPod models sacked the supplier's stock for a big loss. Rambus (RMBS) shares plunged as a jury deliberated on the chip designer's patent lawsuit against South Korea's Hynix.

But Swift (SWFT) shares broke every speed limit after the trucking company said earnings nearly doubled, thanks to a fuel surcharge that has swelled 50% in a year's time.

In overseas action, Paris and Frankfurt stocks gained in the neighborhood of 1%, but were once again outdone by Bombay. The commodity slump troubled traders in Toronto.