Stock market action each January is probed and debated nearly as much as the identity of the national champion in college football.

The theory that January sets the trend for the full year was violated big time last year, a rare fumble for the so-called January barometer.

The benchmark Standard & Poor's 500 index dropped 2.7 percent in January 2003. But the index gained 26.4 percent for the year.

Technical analysts say January results this year are especially important, because major indexes are just below key levels, called resistance points, established two years ago.

In theory, if stocks advance above these points, investor optimism should expand.

To pick one such milestone, technical analyst Tracy Knudsen at Stone & McCarthy Research in New Jersey says the 1176 mark on the S&P 500, hit during the trading session of Jan. 7, 2002, is a major resistance point.

The S&P index reached a nearly two-year high of 1124.44 in Tuesday's trading. Knudsen sees speed bumps along the way. The S&P 500 has rallied 6 percent since Dec. 10.

"Given the extent of this latest climb, the S&P is about due for a correction," she concluded in a report Tuesday.

Chicago-based money manager Carl Birkelback, who pegs the resistance point at 1175, said: "This is about the place where the market could run into trouble. The market does have a feeling of stalling a bit."

Indeed, one characteristic of trading in the new year so far is the lack of action.

Looking at the Dow Jones industrial average, you might get the impression traders still are sleeping off a hangover from last year's strong rally.

In the first three sessions of 2004, the Dow traded at half the intraday high-low ranges of the first three days of last year.

The index of stock market anxiety tracked at the Chicago Board Options Exchange remains at multiyear lows.

"Where has the volatility gone?" said Fane Lozman, chairman of market monitoring service Scanshift.

Normal tension between bulls and bears was noticeably absent in last year's rally. As a result, Lozman said the next increase in stock market volatility may not be pleasant.

But, if January represents a period of major commitments to buy or sell, so far the month is not living up to its billing.

Tuesday's action: Stocks closed mostly higher, but a disappointing report on business conditions in the services sector blunted the recent rally.

Technology stocks advanced, nonetheless, after Merrill Lynch boosted its forecast of fourth-quarter revenue at Sun Microsystems. Sun gained 33 cents, to $5.03.

The Dow Jones industrial average slipped 5.41, to 10,538.66. Caterpillar, Procter & Gamble and Altria Group led the day's decliners among the 30 Dow industrials. Wal-Mart Stores and J.P. Morgan Chase were the biggest winners.

The broader Standard & Poor's 500 index added 1.45, to 1123.67. The Nasdaq composite index rose 10.01, to 2057.37. The Russell 2000 index added 0.97, to 569.89.

Among stocks in the news, coffee purveyor Starbucks gained 41 cents, to a record closing high of $33.82. Late Monday, the company posted strong December sales and boosted its profit forecast.

Banking giant J.P. Morgan Chase added 92 cents, to $37.47, after Prudential boosted its investment rating on the stock.

New York Stock Exchange trading volume reached 1.49 billion shares. Winners held a narrow lead over losers among NYSE-listed stocks. Nasdaq trading volume totaled 2.21 billion shares, as winners topped losers by a 9-7 ratio.

Treasury securities closed higher after the weak report on services sector conditions. The Treasury will sell $16 billion of 5-year notes on Wednesday.

The price of gold dropped after advancing above $430 an ounce early in New York futures trading. The metal closed down $1.60 an ounce, to $423.20.

Oil futures slipped 8 cents a barrel, to $33.70.

The dollar reached a fresh record low against the euro but moved higher against the yen.

Local news: Chicago-based gaming equipment-maker WMS Industries was one of the leaders last year in terms of the level of share buying by insiders, according to Thomson First Call. WMS insiders bought $14 million of stock, as shares rose 75 percent in 2003.