Dow sets record at 12,803

The Dow Jones industrial average closed above 12,800 for the first time Wednesday, signaling Wall Street’s recovery from its steep decline in February as investors rewarded companies with strong earnings.

The day was not a standout for the overall market, however. Technology stocks lagged following disappointing earnings from leaders including Yahoo.

The Dow moved as high as 12,838.46 before slipping slightly to 12,803.84, up 30.80 points, or 0.2%. The Dow broke records set Feb. 20, one week before the average tumbled 416 points in a worldwide sell-off.

As only 11 of the 30 stocks in the blue-chip index advanced, the Dow’s gain Wednesday came from strength in stocks such as JPMorgan Chase, Boeing and Caterpillar.

JPMorgan lifted the Dow after the bank reported a 55% increase in profit that far surpassed Wall Street’s expectations. The companies that make up the Dow -- nearly half of which report earnings this week -- have been mostly beating analyst predictions.

Broader stock indicators finished mixed. The Standard & Poor’s 500 index rose 1.02 points, or .1%, to 1,472.50, but the Nasdaq composite index fell 6.45 points, or .3%, to 2,510.50.

The Russell 2,000 index of smaller companies fell 4.58 points, or .6%, to 824.38.

Bond yields slipped for the third straight session as investors grew optimistic that the Federal Reserve wouldn’t raise interest rates. The yield on the benchmark 10-year Treasury note fell to 4.65% from 4.68% on Tuesday.

Gold futures rose 90 cents to $689.10 an ounce.

Investors pulled back from tech stocks after Yahoo posted a surprising 11% drop in its first-quarter profit. Disappointing results from IBM and Motorola added to the selling.

Mike Malone, a trading analyst at Cowen, said results from Yahoo stunted some of the market’s appetite for technology issues. However, he dismissed the notion that Yahoo’s earnings marked the start of a trend for first-quarter reports.

“There have been some company-specific issues out there, but they really aren’t indicative of the underlying earnings environment,” he said.

Wall Street was uneasy about a sharp drop in the dollar, which is now at 26-year lows against the British pound and a two-year low against the euro -- which rose to $1.358. The U.S. currency has weakened because interest rates have remained steady since the summer and amid signs of a slowing U.S. economy.

Crude oil futures rose 3 cents to $63.13 a barrel in New York as a government report showed a bigger-than-expected decline in gasoline inventories. The U.S. Energy Information Administration said stockpiles dropped 2.7 million barrels to 197 million barrels.

Charlie White, chief investment officer of ThomasLloyd Funds, said that while overall earnings were good, investors appeared to still be waiting for signs as to where the economy was headed.

“It’s one of these periods of time that you don’t have any compelling evidence either way and what you need to do is stay focused and be patient,” he said. “I ask myself the question, ‘Is this the beginning of a leg up in a bull market, or is this a last gasp?’ ”

Investors were focused on earnings reports as they looked for a direction in stocks. S&P; has predicted earnings for companies in the S&P; 500 grew less than 4% in the first quarter, much less than in previous quarters.

In other market highlights:

* Yahoo dropped $3.78, or 11.8%, to $28.31 after the Internet portal reported disappointing results late Tuesday. The results left Wall Street wondering how much longer it would take the company to regain its financial footing after it stumbled through most of 2006.

Pressure was felt elsewhere in the tech sector. IBM posted disappointing results late Tuesday, and its shares dropped $2.32, or 2.4%, to $94.80. Hard drive maker Seagate Technology fell 85 cents, or 3.8%, to $21.30 after it reported profit fell 22% in the first quarter, and lowered its forecast.

Elsewhere in the tech sector, Motorola reported a first-quarter loss due to sluggish sales and charges to cover a legal settlement and restructuring efforts. However, sales surpassed expectations and the stock rose 27 cents to $18.22.

* Among gainers, Boeing advanced $3.43 to $93.88, and Caterpillar gained $1.71 to $69.37.

* Medical device maker Abbott Laboratories fell 97 cents to $58.03 after it said first-quarter profit fell 19%. The results excluding certain items, however, beat analyst estimates.

* JPMorgan rose $1.89, or 3.8%, to $52.07 after the nation’s third-largest bank reported a 55% increase in profit. The New York-based bank said first-quarter results were boosted by strength across its primary business lines, though it increased reserves to offset sub-prime mortgage losses.

Declining issues led advancers 9 to 7 on the New York Stock Exchange, where consolidated volume came to 2.93 billion shares, compared with volume of 2.89 billion shares Tuesday.

Overseas, Japan’s Nikkei stock average closed up 0.8%. Britain’s FTSE 100 finished down 0.7% and Germany’s DAX index fell 0.9%.