HP’s Warning Clips Dow; Yields Climb
Stocks fell Thursday, but only modestly, as a profit warning by Hewlett-Packard yanked the Dow Jones industrial average lower but failed to rattle the technology sector or the broad market.
The Dow fell 39.61 points to 9,172.23 after recovering from an opening plunge of nearly 100 points and briefly flirting with Wednesday’s record close of 9,211.84.
If not for the equivalent of a 45-point plunge by Hewlett-Packard, the Dow would have posted a small gain and edged further into record territory.
Broad-market indicators closed lower after surrendering some marginal gains.
While the day began with an unsettling reading on inflation and reports of more clashes in Indonesia, the session was dominated by three big names in technology.
HP fell $11.31 to $70.31 following late Wednesday’s announcement that price wars and Asia’s weak economies have hurt profit for the maker of computers and printers.
HP’s troubles, however, never really spread. Notably, the technology-heavy Nasdaq composite index suffered the least damage among the major market averages, slipping just 0.82 point to 1,865.36.
Wall Street is still betting that the Federal Reserve Board will leave interest rates unchanged.
The yield on the benchmark 30-year Treasury bond rose to 5.98% from 5.94%. Bond prices were hurt by news that consumer prices rose slightly more than expected in April. The consumer price index was up 0.2%, in line with expectations, but the core rate rose 0.3%, above forecasts.
Offsetting a big chunk of HP’s impact on the Dow was IBM, which rallied $3.94 to $125.81 a day after Chief Executive Louis Gerstner forecast double-digit revenue growth in coming years.
The technology sector was also bolstered by a temporary cease-fire in the antitrust battle against Microsoft, which rose $2 to $88.94.
Declining issues outnumbered advancers 7 to 5 on the New York Stock Exchange. The Standard & Poor’s 500 fell 1.49 points to 1,117.37, and the NYSE composite index fell 0.89 point to 578.31.
Overseas, Frankfurt’s DAX index fell 0.3% and London’s FTSE-100 fell 0.4%. Tokyo’s Nikkei stock average fell just 0.2%.
Among market highlights:
* C-Phone ended up 63 cents at $10.38 after soaring $3 initially on news that it has a device that allows users to navigate the Internet using a phone line and a television, with no computer at all.
* Xybernaut, which makes “wearable computers,” soared $5.47 to $8.22 after it struck a manufacturing deal with an affiliate of Sony.
Market Roundup, D6
