Stocks Mixed Amid Profit, Airstrike Jitters
Stocks closed mixed Wednesday after a lackluster session as traders, chastened by Tuesday’s big drop, refrained from placing any big bets.
NATO’s launch of airstrikes against Yugoslavia initially pushed stocks lower, but many shares recovered later in the day.
Still, the Dow Jones industrial average slipped 4.99 points to close at 9,666.84. Worries that first-quarter corporate earnings won’t meet expectations had sent the Dow down 218.68 points Tuesday, or 2.2%--the blue-chip index’s second-biggest point loss this year.
“I think the decline [Tuesday] really confirmed the danger signals,” said Hugh Johnson, investment strategist at First Albany. “Every buyer that you talk to has basically just backed away and put their strategies on hold.”
Yet the broader Standard & Poor’s 500 index rose 6.45 points to 1,268.59 as rising stocks narrowly outnumbered losers on the New York Stock Exchange.
The Nasdaq composite was much stronger, jumping 1.8% to close at 2,365.28 after slumping 3.1% on Tuesday on fresh concerns about tech companies’ earnings.
Dell Computer rose $2.81 to $38.50 after falling $2.19 on Tuesday. Microsoft rose $4.69 to $171.25, and Intel climbed $4.69 to $119.25. Dow component IBM gained $4.13 to $169.50.
Some investors may have been comforted as Abby Joseph Cohen, strategist at Goldman Sachs, raised her year-end price targets for the S&P; and Dow indexes to 1,325 and 10,300, respectively.
And some analysts said earnings worries are overblown.
“Every quarter, you see a big dip in the market because of concerns about the upcoming quarter’s earnings,” said John Shaughnessy, chief investment strategist at Advest of Hartford, Conn. “That’s what we’re witnessing. The key thing is that the underlying fundamentals remain very good.”
As NATO’s bombing runs against Yugoslavia began, U.S. Treasury yields were flat to modestly lower. The yield on the bellwether 30-year T-bond eased to 5.53% from 5.55% on Tuesday. Also, the Treasury sold $15 billion in new two-year notes at a yield of 4.995%.
In overseas trading, Japanese stocks fell sharply for a second day in response to Tuesday’s tumble on Wall Street. Tokyo’s Nikkei 225-stock average slid 3.1%.
European stock markets were hit by concerns about earnings and the military action in Kosovo. London’s FTSE-100 stock index was off 0.7%, while the DAX index in Frankfurt was down 2.7%.
But Mexican shares soared 4% on a favorable inflation report.
Among Wednesday’s highlights:
* The Dow was hurt by continuing losses in American Express, off $4.19 to $117.13, and Wal-Mart, down $1.50 to $89.
* Fresh takeover rumors drove Navistar up $6.06 to $42.19 and Revlon up $5.19 to $22.25.
Meanwhile, Knoll jumped $9 to $24.25 as the office-furniture maker got an offer from its management and Warburg, Pincus Ventures to acquire the 40% of the company Warburg doesn’t already own for about $25 a share.
* Many Internet stocks revived, with Amazon.com up $4.31 to $123.69, Yahoo up $5 to $160.50 and Doubleclick up $12.88 to $179.88.
Also, MiningCo.com, which helps computer users find information on the Net, rocketed $22.50 to $47.50 in its first trading day.
* Cytyc surged $4.44 to $14.88 as a BancBoston Robertson Stephens analyst said the stock’s recent decline “presents an excellent buying opportunity.”
Market Roundup, C9
