Dow Loses 11.07 Despite Good News

Stocks stumbled to a mostly lower close Tuesday despite a government report that suggested inflation remains benign, news that often spurs buying on Wall Street.

The stock market started out on solid ground but slipped as the bond market deteriorated. When bonds recovered, stocks stayed stuck at depressed levels.

After surrendering an initial gain inspired by the favorable inflation news, the Dow Jones industrial average displayed negative readings throughout the session and finished off 11.07 at 4,187.08. Broader stock gauges also declined.

Losers had a slight edge over gainers on the NYSE and a closing tally showed 1,123 stocks down, 1,066 up and 771 unchanged.

Volume on the Big Board’s floor expanded to 309.71 million shares as of 4 p.m. Eastern time from 260.99 million on Monday.

One bright spot was the technology sector. Stocks of computer chip companies were particularly strong performers, which boosted the Nasdaq Stock Market. Its composite index climbed 3.57 to 824.83.

Some of the stocks that moved substantially or traded heavily:

NYSE

Kemper up 4 3/8 to 45 3/4 in heavy trading.

The financial services company has agreed to be acquired by an investor group led by Zurich Insurance Group of Switzerland for $49.50 a share or about $2 billion.

Motorola, down 1 7/8 to 54 5/8 in NYSE-leading volume of more than 11 million shares.

The company posted quarterly results that were slightly lower than Wall Street expected. First-quarter income came to 61 cents a share, up from 51 cents a year earlier.

American Home Products, up 2 1/4 to 78 1/8.

The company issued a promising preview of its quarterly results. It said its first-quarter earnings will range from $1.27 to $1.30 a share while its sales will be up 63 percent from a year earlier.

NASDAQ

Intel, up 2 3/4 to 91 1/4 in Nasdaq-leading volume of more than 10.8 million shares.

The stock got a boost from an industry report depicting strong demand for computer chips.

AMEX

American Maize Products class A, down 1 1/2 to 34 1/2.

A Maine court temporarily blocked Eridania Beghin-Say’s $340 million acquisition of the company by prohibiting American Maize from issuing new class B shares.