Wall Street Endsa Losing Weekon a Positive Note
Stocks rallied to a positive finish Friday as investors were betting on better corporate earnings next year. But the market still ended the week lower on lingering fears of bioterrorism.
Investors are hoping for a turnaround in the economy and corporate profits by 2002 but are getting hit with weak earnings from many quarters.
The technology-laden Nasdaq composite index finished up 18.59 points, or 1.1%, at 1,671.31, after declining more than 1% earlier in the day. Also rebounding was the Dow Jones industrial average, which ended up 40.89 points, or 0.5%, at 9,204.11. The broader Standard & Poor’s 500 index rose 4.87 points, or 0.5%, to 1,073.48.
Winners outnumbered losers by about 8 to 7 on the New York Stock Exchange and by 4 to 3 on Nasdaq. Trading was moderate.
For the week, Nasdaq fell 1.9%, the Dow slipped 1.5%, and the S&P; 500 dropped 1.7%. The losses snapped a string of three straight winning weeks for the major stock indexes. Since the Sept.11 terrorist attacks, Nasdaq is down 1.4%, the Dow is down 4.2%, and the S&P; 500 is off 1.7%.
The Dow got a boost from Coca-Cola, which rose $2.47 to $48.59 after UBS Warburg added the soft-drink maker and Hershey Foods to its “highlighted stocks” list. Hershey, which gained $2.49 to $64.55, reported higher earnings early Friday.
Microsoft fell before ending up $1.15 at $57.90, helping both the Dow and Nasdaq. The company said it had not seen a huge effect from the Sept. 11 attacks but said that the economic outlook was hard to forecast.
On a more upbeat note, software maker PeopleSoft gained $2.26 to $26.56 after its earnings beat lowered forecasts. Semiconductor equipment maker KLA-Tencor added $1.63 to $36.51 after it reported increased profit and revenue and cited strong orders in the U.S. and Taiwan.
Emulex jumped $4.60 to $24.65, nearly 23%. The Costa Mesa-based storage equipment maker posted a sharp net loss for its fiscal first quarter, but operating earnings of $7.5 million still edged ahead of forecasts.
“Investors are saying, ‘You know what, it’s not getting any worse in terms of fundamentals for the companies. They have been bad but not getting worse,”’ said Tony Rosenthal, portfolio manager at TimesSquare Capital Management. Investors “think this is a decent time to buy these stocks because six months from now things will improve.”
The latest economic news showed the consumer price index--a key gauge of national inflation--rose at a stronger-than-expected 0.4% rate in September after a 0.1% August gain.
Inflation, though, is not the market’s focus at the moment, analysts said. Wall Street realizes that Federal Reserve Chairman Alan Greenspan has to be more concerned with turning the economy around rather than worrying about slight signs of inflationary pressure.
Among the market highlights:
* Finland’s Nokia rose $1.32 to $20.10 in active trading. The world’s largest mobile phone maker indicated that it is weathering the current slowdown well, bolstered by its new range of phones.
* EBay tumbled $7.11 to $51.95. The Web auction site delivered strong sales and earnings but cautioned that holiday business might suffer as consumer buying slows.
* Sycamore Networks lost 80 cents to $4.04. The optical networker reduced its first-quarter profit forecast and said it plans to cut 240 jobs.
* Computer Associates gained $2.02 to $29.94. The software company raised its third-quarter profit estimates after reporting second-quarter results that beat analyst expectations.
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Market Roundup, C4-5
