Techs Gain on Dell Profit News
Technology stocks scored their third straight winning session Thursday after Dell Computer issued an upbeat profit forecast. But blue chips were mixed as jittery investors opted to sell amid persisting worries about sliding corporate earnings.
“Where are the fundamentals to lift this market through?” asked Larry Wachtel, market analyst with Prudential Securities. “They are just not there.”
The market had tumbled to three-year lows after the Sept. 11 terrorist attacks amid fears that the economy will slip into recession and uncertainty over the U.S. military response. Major market gauges bounced back last week, gaining back a big chunk of the lost ground, and kept rising this week.
On Thursday, the Nasdaq composite index gained 16.50 points, or 1%, to 1,597.31. Tech stocks gained as much as 4% early on, pulling along blue chips, but the rally lost steam near the session’s end.
“The fizzle at the end is probably more anxiety around the [jobs] report to be released [today],” said Ned Riley, chief investment strategist at State Street Global Advisors. “And more investors are concerned about the severity of the impact of Sept. 11.”
Government data released today were expected to show the unemployment rate for September rose to 5% from 4.9%, with 109,000 jobs shed outside the farm sector. The numbers may get worse next month because the survey covers the pay period through Sept. 12, a day after the attacks.
The blue-chip Dow Jones industrial average fell 62.90 points, or 0.7%, to 9,060.88 and the broader Standard & Poor’s 500 index slipped 2.65 points, or 0.3%, to 1,069.62. Both had risen earlier.
Though some indexes lost ground, winners still outnumbered losers by about 3 to 2 on Nasdaq and the New York Stock Exchange. Trading volume was heavy.
The market weakened shortly after the open as worries surfaced over the crash of a Russian passenger plane into the Black Sea Thursday morning after takeoff from Israel. Stocks recovered, but fears of more violence are rippling across the globe after the Sept. 11 attacks.
“Obviously, it does raise additional fears about what else might occur,” said Alan Ackerman, a market strategist at brokerage Fahnestock & Co. “Once again, it’s the unknown and the uncertainty that keep this market from a big break-out rally.”
Dell, which said demand had rebounded more quickly than expected after the attacks, helped fuel the tech rally. Its stock ended up $1.68 at $22.32 and helped lift competitors such as Apple Computer, up 90 cents at $15.88.
Networking giant Cisco Systems rose 47 cents to $14.42. On Wednesday, Cisco’s announcement that it would meet profit estimates helped propel Nasdaq to its largest percentage gain since April.
Cisco rival Juniper Networks added $1.27 to $13.27 after Morgan Stanley raised its investment rating on the company.
In other market highlights:
* Yields on some Treasury securities rose after the Treasury Department issued new 10-year notes in a surprise move aimed at easing a supply shortage exacerbated by damage to market systems after the terrorist attacks.
The Treasury sold $6 billion of 10-year notes before its regular November refunding auction and said it may also issue five-year notes to help resolve the shortage. Nervous investors have been reluctant to lend those issues in the repurchase market with the ongoing problems settling trades since the attacks.
The yield on the benchmark 10-year note rose to 4.51% from 4.47% Wednesday, while the yield on the two-year note held steady at 2.74%.
* Corning, the world’s No. 1 maker of fiber-optic cable, fell $1.30 to $7.70. The company warned that quarterly earnings will miss estimates as it expands a restructuring effort to combat deteriorating conditions across its business.
* Alcoa fell $1.27 to $30.82. The world’s No. 1 producer of aluminum and a Dow component said quarterly profit fell 7.9% on lower metal prices and weak demand, and it expects market weakness to continue in the fourth quarter.
* Research in Motion, maker of the BlackBerry wireless e-mail device, slipped 29 cents to $15.46. The company saw results dented by an inventory write-down at one of its troubled resellers, and the firm said the weak economy will hurt future sales.
Market Roundup, C5-C6
