Stocks Edge Up in Anticipation of Tech Earnings
Stocks ended higher Tuesday as upbeat earnings news from France’s Alcatel lifted telecom equipment makers and as investors geared up for results from a number of key technology companies due later this week.
Dull retail sales data for December dampened the mood on Wall Street early, but investors quickly turned their attention to corporate earnings.
After the close, computer chip giant Intel reported better-than-expected earnings but said its capital expenditures for 2003 would be lower than last year.
“It’s just all earnings-related at this point in time,” said Donna Van Vlack, director of trading at Brandywine Asset Management. “What we need are some more substantive announcements to really figure where to go next.”
Boosted by the effect of Alcatel’s better-than-expected results on other telecom stocks, the tech-laden Nasdaq composite rose 14.95 points, or 1%, to 1,460.99. The blue-chip Dow Jones industrial average rose 56.64 points, or 0.6%, to 8,842.62 and the Standard & Poor’s 500 index gained 5.40 points, or 0.6%, to 931.66.
Winners outnumbered losers by 3 to 2 on the New York Stock Exchange and by 4 to 3 on Nasdaq. Trading volumes were modest.
Intel, whose chips power the vast majority of computers in the United States, gained 41 cents to $17.79 in regular trading, and the SOX index of semiconductor stocks climbed 1.1%. Intel rose to $17.93 in after-hours trading.
Because of its size and market share, Intel serves as a barometer for the semiconductor industry, which is hoping that 2003 will mark a recovery from its worst downturn ever.
But if investors were hoping Intel’s results would shine a light on the foggy corporate profit picture, they may be disappointed, said Hugh Johnson, chief investment officer at First Albany Asset Management.
“Most investors are waiting for the other reports this week ... and also waiting for the January economic numbers,” Johnson said. “That’s why the market has been trendless and will remain so until we get into these numbers” this week.
Tech heavyweights set to report quarterly results this week include Apple Computer, IBM, Microsoft and Sun Microsystems.
International issues buffeted the market. The possibility of a U.S. attack on Iraq seemed more imminent after President Bush warned Baghdad that time was running out for the nation to come clean about any weapons of mass destruction.
On the economic front, the Commerce Department said retail sales rose 1.2% in December to a seasonally adjusted $307.97 billion.
Excluding autos and parts, sales were flat, confirming that retailers suffered their most disappointing holiday shopping season in years. Many retailers depend on the November-December shopping spurt for a large portion of their revenues and profits.
The dollar fell against the yen and euro, while gold prices fell in New York as speculators took profits from the precious metal’s recent rally to multiyear highs. Oil prices ticked up, rising 12 cents to $32.37 a barrel, as traders continued to fret about tight U.S. supplies.
In other highlights:
* Alcatel soared $1.32, or 23%, to $7.15 in New York trading. Canada’s Nortel Networks, the NYSE’s most actively traded stock, moved up 6 cents to $2.58.
* Rambus, which develops technology that speeds the performance of computer memory chips, climbed 12 cents to $8.52 on Nasdaq after the company posted flat earnings and higher revenue. But Photon Dynamics slumped $6.13, or about 23%, to $20.52 after the chip-testing equipment maker said it would delay releasing its results.
* Top U.S. grocery distributor Fleming slumped $1.48, or 23%, to $5.04 after it cut its fourth-quarter profit estimate, hit by competition from Wal-Mart Stores.
Market Roundup, C8-9
