Markets Rise Amid Anxiety Over Earnings
Buyers returned to Wall Street on Tuesday, lured by cheaper stock prices but still anxious about impending earnings reports.
With a wave of fourth-quarter corporate profit results ahead, investors were wary of taking many chances. Stocks gave up solid, early gains and fluctuated sharply throughout the afternoon, though major indexes closed up from their lows.
“Everyone is a little cautious. They don’t need any surprises,” said Larry Rice, chief investment officer at Josephthal & Co.
The Dow Jones industrial average closed up 32.73 points, or 0.3%, at 9,924.15 after swinging between a 94-point gain and 26-point loss.
The Dow snapped a six-session losing streak during which it dropped 368 points, or 3.6%. The blue chips hadn’t seen such a string since they fell for three sessions before the Sept. 11 attacks, and then five more afterward.
The broader market also finished higher after a day of wide fluctuations. The Nasdaq composite index rose 10.17 points, or 0.5%, to 2,000.91. The Standard & Poor’s 500 index advanced 0.7%.
Advancers led decliners by a 3-2 ratio on the New York Stock Exchange and by a slim 19-18 on Nasdaq. Trading was active.
Analysts have predicted choppy trading for the remainder of the month, saying individual earnings reports could move the market in either direction.
“As the market tries to digest each report, there is going to be some volatility,” said Brian Belski, fundamental market strategist for US Bancorp Piper Jaffray.
Stocks are also vulnerable to profit taking as investors evaluate how far prices have risen since the lows after the Sept. 11 attacks.
“Even though the market has come down recently, it’s still on the overvalued side,” Rice said.
The technology sector was mixed ahead of Intel’s results Tuesday. Intel fell 16 cents to $34.68 in regular trading, and competitor Advanced Micro Devices slipped 46 cents to $19.15. But Microsoft rose $1.08 to $69.55.
After the market closed, Intel announced that fourth-quarter profit fell 77% but beat analysts’ expectations thanks to strong holiday computer sales. Intel fell 92 cents during extended trading, after the chip maker did not sound particularly upbeat about business in the near term.
Chip equipment maker Applied Materials, up 30 cents to $45.61 in regular trading, plunged $2.96 after-hours, reflecting Intel’s warning that it will reduce capital spending this year, analysts said.
Elsewhere in tech, Check Point Software Technologies fell $5.74 to $38.68. The company said first-quarter sales may be little changed or down from the fourth quarter, dashing optimism that revenue would increase.
Financial issues were strong after Wells Fargo posted a 5% increase in fourth-quarter profit due to a mortgage refinancing boom that offset sluggish loan demand among its business customers. Wells Fargo soared $2.30 to $45.32, while Citigroup climbed 84 cents to $49.72 and J.P. Morgan Chase rose 56 cents to $37.87.
Retailers were mixed following a report from the Commerce Department that retail sales experienced a smaller-than-expected decline of 0.1% in December. Wal-Mart Stores, which enjoyed healthy holiday sales, rose $1.11 to $56.87.
In other market news Tuesday:
* Gap fell 98 cents to $14.57 and Kmart sank 39 cents to $2.45 after Moody’s Investors Service reduced its credit ratings for the retailers. Standard & Poor’s said after Tuesday’s session that it will pull Kmart from the S&P; 500 after the close of trading today. S&P; said the retailer no longer meets the requirements for membership in the index. Plum Creek Timber will replace Kmart in the index.
* Rent-to-own store operator Rent-A-Center saw its shares soar more than 20%, climbing $6.47 to $37.46, after announcing it expects to report fourth-quarter earnings above analysts’ estimates. The company raised its 2002 guidance, based on a rise in same-store sales.
Market Roundup: C6, C7
