JDS Uniphase Sets Upbeat Tone at End of Turbulent Week

Stocks ended a turbulent week on an upbeat note Friday as healthy earnings from JDS Uniphase and a benign reading of economic growth touched off a rally in major technology shares and blue chips.

The Dow Jones industrial average rose 210.50 points, or 2%, to 10,590.62, led by advances in Microsoft, General Motors and SBC Communications. It was the Dow’s biggest one-day gain since May and gave it a 3.6% gain for the week--its best weekly performance since June. Since hitting 9,975.02 on Oct. 18--its lowest close since mid-March--the Dow has climbed 6.2%.

Broader indexes also rose, but not as much. The Nasdaq composite index, after waffling higher and lower for much of the day, ended with a slim gain of 6.18 points, or 0.2%, at 3,278.36, leaving it with a loss of 5.9% on the week. Breadth was positive Friday on Nasdaq, with advancing issues leading decliners by about 10 to 9. Volume was heavy at almost 2 billion shares.

The Standard & Poor’s 500 index rose 15.14 points, or 1.1%, to 1,379.58 and ended the week with a loss of 1.2%. More than three stocks rose for every two that fell in active trading on the New York Stock Exchange.

JDS Uniphase set the positive tone Friday, rising $2.81 to $77.25 after releasing better-than-expected earnings late Thursday. Another fiber-optic equipment maker, Corning, rose $6 to $76.

It was a marked turnaround from Wednesday, when a poor revenue showing from Nortel Networks, a telecom equipment maker, touched off a rout in the tech sector that also sent jitters throughout the broader market. The Nasdaq composite index lost 5.6% on Wednesday and continued to struggle early Thursday.

On Friday, though, Microsoft rose $3.25 to $67.69, and telecom provider SBC was up $1.88 at $56.31. Both are Dow members.

Investors seemed relieved by news that the economy has slowed, which makes it less likely that the Federal Reserve will raise interest rates. The government reported Friday that the gross domestic product grew in the third quarter at a 2.7% annual growth rate, slower than the 3.5% analysts forecast.

Jitters about earnings have been dogging the market throughout the third-quarter reporting season, which is now winding down, and investors have been quick to punish companies that deliver disappointing numbers. But a growing belief that tech stocks are reaching a bottom turned Nasdaq around in a late-afternoon rally Thursday.

“Investors who look at history are longing for the end of the month,” said Charles White, portfolio manager at Avatar Associates. “We’re going to have to turn the page on the calendar and get the election behind us before we can mount anything serious.”

For Friday, however, earnings still set the tone. Biotech giant Amgen plunged $9.19 to $59.31 after warning late Thursday that sales of its two major drugs would fall short of previous estimates.

Former Internet highflier Theglobe.com also stumbled after releasing a disappointing earnings report and announcing a drastic cost-cutting program. The online community company, whose shares had soared more than 600% on the first day of trading, ended down 13 cents on Friday at 66 cents.

Among Friday’s highlights:

* Financial stocks, which typically rally on the prospect of falling interest rates, helped power the Dow. J.P. Morgan rose $12.81 to $158.50, Citigroup advanced $1.25 to $50.25 and American Express climbed $1.38 to $55.81. Morgan’s merger partner, Chase Manhattan, gained $2.69 to $42.69.

Friday’s GDP report “lends support to the notion that we’ll see a ‘soft landing’ and that’s favorable for financial stocks that have been buffeted by credit-quality concerns,” said Wayne Nordberg, who manages about $200 million at KBW Asset Management.

* Bond traders, meanwhile, were unimpressed by signs of a slowing economy. The yield on the benchmark 10-year Treasury note rose to 5.71% from 5.68%. Bond yields generally fall on indications of a slack economy, on hopes the Fed will cut interest rates. But analysts said the Treasury market has been hamstrung by the recent volatility in stock prices, with bond traders trying to guess where investors seeking a safe haven will put their money.

* Oil prices fell almost 3% as the recent sell-off in energy shares continued. Crude oil for December delivery fell 97 cents to $32.74 a barrel in New York on expectations that OPEC will boost its production targets Monday in a bid to cut prices.

The Philadelphia oil service sector index fell almost 5%, while the Amex oil index was off 1.4%.

Market Roundup, C4-5