Dow Continues Winning Ways
Wall Street struggled to a mixed finish Tuesday, with blue-chip indexes little changed while the technology sector suffered renewed selling.
The Treasury bond market was relatively calm after the surge in yields in recent weeks.
The Mexican stock market continued to rocket, with the key index reaching a 20-month high.
On Wall Street, stocks opened sharply lower, then pared their losses as buyers returned.
The Dow Jones industrial average rebounded from a 100-point drop at the opening to close up 21.11 points, or 0.2%, at 10,632.35, the highest since June.
The broader Standard & Poor’s 500 index ended down 2.68 points or 0.2%, at 1,165.58.
The tech-dominated Nasdaq composite sank 32.37 points, or 1.7%, to 1,897.12, though it closed up from its session low of 1,879.
Weak sales predictions and news of more accounting investigations in the telecom sector weighed on Nasdaq. Lucent Technologies slid 61 cents, nearly 10%, to $5.65 after lowering its revenue and profit outlook. Cellular phone maker Nokia fell $1.41, or 6%, to $22.09 after it also warned of weaker sales.
Those warnings “are reminding investors that the tech recovery is going to lag the economic recovery because business spending will continue to lag consumer spending,” said John Forelli, money manager at Independence Investment.
Strong indications that the economy is reviving have lifted blue-chip stocks in recent weeks. The tech sector had lagged behind until last week, when Nasdaq soared 7%. Tuesday’s news put a dent in that rally.
So far this year, the Dow is up 6.1% while the Nasdaq index is down 2.7%.
In the bond market, long-term yields stabilized for a second day after jumping last week on expectations that a stronger economy will mean higher interest rates. The 10-year Treasury note yield eased to 5.31% from 5.32% on Monday.
In Mexico City, the IPC share index zoomed 116.66 points, or 1.6%, to 7,278.06, highest since July 2000.
Investors have been eager buyers in the Mexican market this year on hopes that a U.S. economic revival also would pull up the Mexican economy.
The IPC index has risen 14.2% since Dec. 31.
Among Tuesday’s highlights:
* The Dow was boosted by IBM, which surged $3.26 to $108.50. Analysts said issues raised in recent weeks about the company’s accounting methods were put to rest after the firm’s expanded financial disclosure in its 2001 annual report appeared to contain no damaging information.
But Microsoft tumbled $1.80 to $62.54 after brokerage Goldman Sachs said the company’s sales performance in the next fiscal year would be lower than many analysts predicted.
* Among other tech giants, Cisco Systems fell 65 cents to $16.77, Dell Computer lost 71 cents to $28, Adobe Systems fell $2.22 to $38.12 and Broadcom was off $2.15 to $41.80.
* Among blue chips, appliance giants Maytag and Whirlpool rallied after Maytag raised earnings estimates, saying sales have been better than expected. Both companies have benefited from strong home sales.
Maytag leaped $4.63 to $45.30. Whirlpool gained $2.83 to $79.66.
* Many home builders also advanced. KB Home gained 53 cents to $45.27; William Lyon Homes jumped $2.13 to $21.15.
* Some consumer-product stocks were strong. Procter & Gamble gained $1.18 to $85.28, Colgate Palmolive rose $1.17 to $55.27 and Avon was up 81 cents to $52.70.
* Anteon International shares rose $2.05 to $20.05 in their debut on the New York Stock Exchange. The Fairfax, Va.-based company, a provider of information services to the Pentagon, priced its initial public offering at $18 a share Monday. The stock’s ticker symbol is ANT.
Market Roundup, C8-9
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