Tech Pulls Off Third Straight Rise
Wall Street’s rally took a breather Wednesday as investors cashed in some of their profits from two days of big gains. But the technology sector managed its third straight advance, an achievement not seen since early April.
Analysts said the market was tentative after mixed economic news--a rise in consumer prices and an increase in industrial production.
Investors are wary of sending stocks much higher, particularly after the Dow Jones industrials surged 358 points Monday and Tuesday.
“The evidence mounts that we are on the recovery side of things, and the economists are bullish. But we aren’t going to have a big rally until we get some confirmation of earnings and revenue growth,” said Philip Dow, managing director of equity strategy at Dain Rauscher Wessels in Minneapolis.
The blue-chip Dow fell 54.46 points, or 0.5%, to 10,243.68. The broader Standard & Poor’s 500 index was off 6.21 points, or 0.6%, to 1,091.07 after gaining 4% on Monday and Tuesday.
But the Nasdaq composite index rose 6.51 points, or 0.4%, to 1,725.56, giving the tech-laden index a gain of 7% this week.
Winners were slightly ahead of losers on the New York Stock Exchange and Nasdaq in active trading.
Many analysts believe the market’s recent sell-off climaxed last week when the major indexes closed at levels not seen since early October.
In the short run, they expect the indexes to trade within a narrow range.
“I don’t think we are quite through with the down days, but I think we are at the end of the decline,” said Al Mirman, strategist at V Finance in Sarasota, Fla.
Buyers swept into the market earlier this week amid a leap in April retail sales, solid earnings from No. 1 retailer Wal-Mart Stores and an upbeat report from closely watched Applied Materials, which produces equipment used to make semiconductors.
Wal-Mart fell 62 cents to $56.77 on Wednesday. But Applied Materials extended its two-day rally, rising 11 cents to $26.75 after blowing past forecasts for new orders in its earnings statement released after the closing bell Tuesday, suggesting a recovery in the chip industry.
Other tech stocks also rose. Cisco Systems gained 11 cents to $16.56; Oracle climbed 38 cents to $9.19; and Intel gained 9 cents to $30.24. Dell Computer rose 80 cents to $27.70 ahead of its earnings due out today.
But Hewlett-Packard fell $1.15 to $19.35. The company Tuesday reported earnings that met expectations, but didn’t make projections about future business.
Drug makers weighed on the blue-chip indexes. Abbott Laboratories fell $4.84 to $46.90 and Schering-Plough slid $3.49 to $25, after hitting a five-year low earlier in the session. The Amex pharmaceutical index was off 2%.
Abbott said U.S. regulators found one of its plants failed to comply with quality standards. And Schering-Plough, beset with its own manufacturing problems, said the U.S. Food and Drug Administration has launched a criminal probe of one or more of the firm’s products.
The dollar pulled back, and Treasury bond yields dipped despite a report showing a pickup in industrial production in April and another that consumer prices rose in April by the largest amount in almost a year.
In other market news:
* Near-term crude oil futures fell $1.21 to $28.15 a barrel in New York trading after hitting an eight-month high Tuesday. That pulled energy stocks lower. Exxon Mobil lost 87 cents to $39.71, while driller Noble fell $2 to $40.89 and Baker Hughes lost $1.52 to $35.96.
* Business software maker Computer Associates fell $1.35 to $17.75 as the Securities and Exchange Commission broadened its probe into the company.
* Network Appliance, a maker of data storage products, fell $2.99 to $15.05. The company posted a quarterly profit but investors questioned its revenue outlook.
Market Roundup, C6-7
