Dow Falls As Investors Take Profits

The stock market, relieved that the Federal Reserve did not raise interest rates Tuesday, maintained its composure in the face of a bond market slump and closed mixed.

Heavy selling in bonds, incited by an unexpectedly robust reading on consumer confidence, dampened enthusiasm for equities, which depressed the Dow Jones industrial average.

The blue-chip indicator retreated for the first time since March 21, losing 5.53 to 4,151.81.

Gainers and losers ended the session almost even on the NYSE, where a closing tally showed 1,101 stocks up, 1,089 down and 763 unchanged.

Volume on the Big Board’s floor expanded to 320.40 million shares as of 4 p.m. Eastern time, up from 296.19 million Monday.

Hugh Johnson, chief investment officer at First Albany Corp., blamed the selling in both the bond and stock markets to investors eager to cash in profits after the recent runup in prices.

“It has been clear for a couple days now that investors, particularly institutional investors, were becoming increasingly edgy that the market had gone too far too fast,” he said.

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

NYSE

Limited, up 2 1/2 to 22 1/8.

The retailer proposed reconfiguring the company into two separate entities, separating the women’s apparel operations from the lingerie and personal care businesses. Morgan Stanley raised the investment rating on the stock to a “strong buy.”

Micron Technology, up 4 1/4 to 84 1/2.

The company approved a 2-for-1 stock split to be distributed May 22 to shareholders of record May 4.

NASDAQ

Adobe Systems, up 3 to 50 1/4.

The technology company formed an alliance with International Business Machines to develop printing and publishing systems.

Intel, up 1 to 88 1/2.

The company filed a proposal in California state court to settle a classaction lawsuit concerning a flaw in its flagship Pentium microprocessor.

Apple Computer, down 2 13-16 to 34 3/8.

The stock’s investment rating was lowered to “underperform” from “hold” by Salomon Brothers.

AMEX

EXX class A, down 1/8 to 24 1/2.

Stock of the toy manufacturer retreated slightly after being bid up recently by news that the company expected robust fourth-quarter results.