Tech, Consumer Stocks Lead Mixed Market
Stop us if you’ve heard this one before: The stock market finished mixed in moderate trading Thursday.
Actually, it could have been a lot worse, considering banking giant Wachovia’s earnings warning, which slammed its entire sector.
The Dow Jones industrial average inched up 26.87 points to 10,714.82, while the Nasdaq composite, continuing its one-day-up-the-next-day-down pattern, rose 48.33 points, or 1.3%, to 3,845.74.
Despite the Nasdaq index’s gain, losers topped winners by 21 to 18 in that market. Volume remained modest at 1.4 billion shares, though that was the highest since June 6.
Neither the stock market nor the bond market showed much reaction to reports that gave mixed signals about the economy’s health.
But there were no mixed signals from Wachovia: The bank cited the slowing economy as one factor in its earnings warning, which sent its shares down $13.13 to $57.06.
“We’ll have a wall of worry for the consequences on weaker earnings” in a slowing economy, said Tom Galvin, chief investment officer at Donaldson, Lufkin & Jenrette Inc. But he believes the Federal Reserve is close to the end of its credit-tightening cycle, which will eventually boost the broad market, he said.
In the bond market, yields were little changed, with the 10-year Treasury note settling at 6.05%, same as Wednesday.
Gold prices, which had surged Wednesday, pulled back Thursday, with near-term futures easing $2 to $289.60 an ounce.
But oil continued to edge higher, with near-term futures up 10 cents to $32.95 a barrel. And natural gas futures surged 5% to a 3 1/2-year high on expectations that record heat in the West will spur utilities to burn more fuel for air conditioning.
Among Thursday’s highlights:
* Major consumer products stocks lured buyers. Coca-Cola surged $2.88 to $55.88 after brokerage Salomon Smith Barney raised its rating on the stock to “buy” and set a price target of $68. The brokerage said it believes the company’s fundamentals “have bottomed.”
Other gainers included Clorox, up $2.13 to $46.81; Colgate-Palmolive, up $1.38 to $58.50; and Quaker Oats, up $1.56 to $75.19.
* Drug stocks also were mostly higher after Procter & Gamble’s new chief executive said he wants to expand the company’s drug business. Pharmacia gained $1.38 to $55.75, Abbott Labs rose 88 cents to $42.88 and Mylan Labs added 75 cents to $18.19.
P&G; slipped 25 cents to $56.75.
* Microsoft led tech stocks higher, rising $1.88 to $72.38, its highest since May 1.
Other winners included Compaq, up $2.06 to $27.75; Gateway, up $3.31 to $54.56; Oracle, up $3.50 to $82.50; and Vitesse Semiconductor, up $3 to $75.50.
* In the telecom sector, Qualcomm continued to tumble, falling $9.06 to $61.44 after another analyst, Chase H&Q;’s Edward Snyder, cut earnings estimates. A Bear Stearns analyst trimmed estimates on Wednesday, on concerns about the firm’s Asian business outlook.
But Lucent Technologies gained $3.38 to $60 as reports surfaced that the telecom equipment giant was considering spinning off a microelectronics unit.
* In the Internet sector, Internet Capital Group rose $1.22 to $32.69 after saying it has plans for 21 Net-related stock offerings, should the market for the stocks improve.
* Kansas City Southern jumped $7.31 to $84 after it approved the planned spinoff of its Janus mutual funds group and other financial services businesses. Shareholders will get two shares of the new unit, Stillwell Financial, for each Kansas City share owned as of June 28.
The new stock will trade under the ticker symbol SV on the New York Stock Exchange.
* American Realty plunged $8.75 to $6.69. Two advisors to the company resigned amid charges they were linked to an alleged mob-infiltrated stock scam unveiled Wednesday by federal authorities.
Market Roundup, C7-8
