NEW YORK – U.S. stocks closed mixed Wednesday, with the Dow Jones Industrial Average failing to stay above 12,000, after the average smashed through that barrier in early trade as its components IBM and Intel posted strong gains.

The Dow industrials shot above 12,000 for the first time in the opening minutes of trade. It later traded as high as 12,049.51, before breaking stride and closing up 42.66 points at 11,992.68.

Within the Dow, shares of Intel closed up almost 1 percent at $21.07 after the world’s largest chipmaker’s third-quarter earnings report showed signs of being past the worst of its problems. Intel reported a 35 percent profit decline, though compared with the second quarter, profit rose 47 percent.

Shares of fellow Dow member IBM closed up 3.3 percent at $89.82, off a midday high of $92.04, after the company’s 47 percent profit rise exceeded analyst estimates.

The Nasdaq Composite Index finished down 7.80 points at 2,337.15, pressured by weakness among some technology sector stocks, and the S&P 500 Index inched up 1.91 point to 1,365.96.

James Park, managing director at Rodman & Renshaw, said it’s normal for the market to hit resistance at these levels.

“Since we’re at highs across all indices, I think it was a natural reaction that sellers came into the marketplace to take profits. It seems to be a healthy retracement, but overall the sentiment seems to be to sell good news with stocks trading at their current valuations.”

On the broader market for equities, advancers outpaced decliners by nine to seven on the New York Stock Exchange, but there were 15 decliners for every 14 stocks rising on the Nasdaq.

By sector, the Philadelphia Semiconductor Index fell sharply as Intel’s gains were offset by a disappointing orders and sales outlook from Dutch chip-equipment maker ASML.

Novellus Systems Inc., another chip-equipment maker, also weighed heavily on the index after it too offered a revenue outlook below current analyst expectations.

Networkers and computer-hardware stocks also moved lower.

Pharmaceutical companies posted a solid advance, helped by solid earnings from Abbott Laboratories.

For Barry Ritholtz, president of Ritholtz Capital Partners, the market has been on “a mission to get to 12,000 no matter what the data has been saying.”

“But I think there is a disconnect between the market and economic reality,” when you bear in mind that earnings are at their cyclical peak and the economy is slowing.

Volume was 1.62 billion shares on the Big Board and 2.178 billion on the Nasdaq.

A tame consumer-price report and better-than-expected housing data helped set the positive tone in the early going.

The U.S. Labor Department’s consumer-price index for September fell a seasonally adjusted 0.5 percent, driven by a 7.2 percent drop in energy prices. Economists surveyed by MarketWatch had been expecting a decline of 0.3 percent, on average.

The core CPI, which excludes food and energy prices, rose 0.2 percent, in line with economists’ projections.

High Frequency Economics chief U.S. economist Ian Shepherdson said year-over-year core inflation “should prove the peak or very close to it.”

In other data, the Commerce Department said new construction of U.S. homes unexpectedly increased 5.9 percent in September to a seasonally adjusted annual rate of 1.772 million, the first increase in housing starts since May. Economists had been expecting a 2 percent decline.

Meanwhile, building permits slid 6.3 percent to a 5-year low of 1.619 million annualized, greater than the expected 2 percent drop.

Shepherdson said the permits data are much less volatile than housing starts because they are not affected by the weather. “Moreover, the drop in permits is accelerating,” Shepherdson said. “It isn’t over. It has barely begun.”

The U.S. dollar rose slightly after the data, with the greenback 0.2 percent better vs. the yen at 118.91 and up 0.2 percent against the euro at $1.2529.

Treasury prices were volatile in trade dominated by bets on whether yields will break out after next week’s Federal Open Market Committee meeting. The 10-year Treasury note closed up 2/32 at 100 28/32, with the yield at 4.763 percent.

Crude-oil futures turned lower as traders mulled a mixed Energy Department report on weekly supplies of crude and its products. The benchmark November contract ended down $1.28 at $57.65 a barrel, its lowest level in a week.

Gold futures closed lower, reversing course late in the session after peaking at $598, tracking weak oil prices. Prices haven’t managed to get past the $600 level in more than two weeks with little to spur investment demand.

Motorola shares dropped 4.9 percent to $23.64 after reporting a 45 percent profit drop and a below-forecast 17 percent sales rise, and saying that fourth-quarter revenue also may miss Wall Street estimates.

Shares of Yahoo erased early gains to close down 5 percent at $23.04. The Internet bellwether reported third-quarter profit fell 37 percent, as higher advertising sales at its collection of Internet sites weren’t enough to offset stock options costs and higher expenses. The company also offered a fourth-quarter sales forecast below analyst expectations.

After the close on Wednesday, Apple Computer, eBay Inc. and Advanced Micro Devices put out results.

Dow member J.P. Morgan Chase & Co. was the biggest company outside of the tech arena to report earnings. Shares closed off 1.6 percent at $47.21 as analysts lauded results from investment banking activities but worried about signs of weakness in more traditional areas like credit cards, commercial banking and mortgage lending.

J.P. Morgan also expects investment banking in the fourth quarter to be “a little lower” than in the third quarter, executives said on a conference call.

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AP-NY-10-18-06 1725EDT