Dow Recoups Most Of Early Loss, Edges Lower

Stocks rebounded Tuesday after sliding with bonds and the Nasdaq composite index and the Russell 2000 list struggled to their ninth straight record closes.

Technology and smaller-company issues recovered from some early profit-taking. Blue-chip stocks revived on signs of an improving retail environment and declining commodities prices, which helped offset worries about inflation and rising interest rates.

The Dow Jones industrial average lost 4.33 points to close at 5,569.08, rebounding from a deficit of almost 28 earlier in the session. It was the third straight session that the sluggish blue-chip index ended with a move of less than 10 points. Much of Tuesday’s weakness was the result of a drop in oil prices, which hurt the three oil stocks in the average of 30 issues.

Trading was generally hesitant again as investors continued to brace for Friday’s pivotal report on April employment.

Declining issues outnumbered advancers by a slim margin on the New York Stock Exchange. Volume totaled 393.20 million shares as of 4 p.m., up from the previous session, but still slower than last week’s hectic, earnings-driven pace.

Some of the stocks that moved substantially or traded heavily Tuesday:

NYSE

PepsiCo, up 2-1/8 at 63-1/2.

The company reported that its first-quarter earnings rose 23 percent from a year ago on higher snack food and beverage sales as well as improved restaurant revenues. For the three months ended March 23, PepsiCo earned $394 million, or 49 cents a share, which was in line with many analyst forecasts.

Zenith Electronics, up 2-1/2 at 9-5/8.

The company said it will introduce a system that allows cable TV operators to offer high-speed data transmission, including access to the Internet. Zenith said the system combines its cable modems with Microsoft’s Windows NT computer operating system and computer networking technology from Cisco Systems.

IBM, down 7/8 at 107-3/4.

The computer maker’s board of directors, meeting before the annual meeting, authorized the repurchase of an additional $2.5 billion worth of IBM common stock.

NASDAQ

UUNet Technologies, up 10-1/2 at 58-3/4.

MFS Communications, up 1/16 at 34-11/16.

The companies announced that MFS will acquire UUNet, an Internet access provider, in a deal valued at $2 billion. MFS will pay 1.78 of its shares for each of UUNet’s 28.4 million shares.

Circle Financial, up 7-1/8 at 34-5/8.

Fidelity Financial of Ohio, down 5/8 at 10.

The companies announced that Fidelity Financial will acquire Circle Financial Corp. for about $27.6 million.