FINANCIAL MARKETS : Stocks Close Higher Despite Tech Selloff
Stocks posted moderate gains on Friday despite a late selloff by technology issues.
The Dow Jones industrial average ended 6.50 points higher at 4,769.21, having cut a gain of more than 20 points posted earlier in the session.
“It’s been an extremely volatile market,” said James Solloway, research director at Argus Research.
“Investors don’t really know which way to jump, and so what we’ve seen over the last few weeks is fairly sharp moves before a reversal sets in. That will continue to be the case until we get through a good part of the earnings reporting season.”
Advancing issues had a narrow 6-to-5 lead on decliners on the New York Stock Exchange.
Big Board volume totaled 313.63 million shares, down from 367.42 million on Thursday.
Broad market indexes finished mixed after backing off their highs with technology stocks.
The NYSE’s composite index rose 0.37 point to 312.38. The Standard & Poor’s 500-stock index fell 0.14 point to 582.49.
The Nasdaq composite index eased 2.16 points to 1,012.04. The American Stock Exchange’s market value index added 1.14 points to 533.54.
Stocks advanced in the early trading as the dollar and bonds firmed, and Merrill Lynch raised its short-term rating on Intel to “buy” from “above average.”
Among Friday’s highlights:
* Intel’s stock rose sharply, pulling other technology shares with it, but backed off in the afternoon. Intel finished up 1 1/8 at 62 in Nasdaq trading. On the Big Board, Motorola slid 3 1/8 to 68 3/4 in leading volume of 6.3 million shares. Micron Technology was second in volume and lost 3 7/8 to 70 5/8. IBM eased 3/8 to 94 1/8.
* Alcoa said third-quarter earnings rose to $1.27 a share from 39 cents a year ago. Alcoa’s stock, a Dow industrials component, gained 1 1/2 to 53 1/8. That boosted other deep cyclical stocks, which tend to respond sharply to changes in economic outlook.
Alcoa’s earnings were important because they called into question analysts’ increasingly dim expectations for third-quarter earnings.
“This is the first major corporation to report” third-quarter earnings, said Larry Wachtel, a stock analyst at Prudential Securities. “So maybe the cyclical earnings are going to be OK.”
* Unisys rose 1/2 to 8 3/8. The company said it will break itself into three divisions--information services, global support services and computer systems.
The market waffled at the open but soon headed higher, as bond yields fell at first in response to an early morning Labor Department report that businesses added 121,000 payroll jobs in September, less than analysts expected. The unemployment rate stayed at 5.6%.
But the benchmark 30-year Treasury bond ended unchanged at 6.42% late in the session.
Stocks also took some support from the dollar, which was higher against the Japanese yen ahead of this weekend’s meeting of the big seven industrial countries.
In late New York trading, the dollar ended at 100.53 yen, up from 99.40 yen on Thursday.
European stock markets sank ahead of the G-7 meeting.
London’s FTSE-100 dropped 17.9 points to 3,526.5, eating into the gains of the past five sessions but recovering toward the close.
Frankfurt’s DAX index ended down 37.39 points at 2,171.43.
But the Nikkei index in Tokyo finished up 285.87 points, at 18,506.28, amid surprisingly strong buying by pension funds.
Mexico’s key 37-share IPC index ended up 61.54 points at 2,409.19.
In commodities trading, coffee prices fell Friday to their lows for the week with traders selling on fears that exporters would not be able to restrain a flood of supplies. The December coffee contract at the Coffee Sugar and Cocoa Exchange closed 5.40 cents a pound lower at 118.10 cents.
