Blue Chips Rally as Tech Loses Ground

Blue-chip stock indexes rallied to 22-month highs Wednesday, but the red-hot technology sector cooled a bit.

In other markets, the dollar continued to lose ground against the euro. Gold eased on worries about sales of the metal by central banks.

On Wall Street, earnings reports remained at center stage. A strong report from J.P. Morgan Chase, one of the stocks in the Dow Jones industrial average, helped lift that index 94.96 points, or 0.9%, to 10,623.62, its highest since March 19, 2002.

The Standard & Poor’s 500 also reached its best level since March 2002, rising 8.85 points, or 0.8%, to 1,147.62.

But the tech-dominated Nasdaq lost 5.53 points, or 0.3%, to close at 2,142.45 as some investors took profits from the sector’s run-up this year.

Falling stocks had a narrow edge over winners on Nasdaq, while on the New York Stock Exchange winners topped losers by more than 3 to 2.

Analysts said the market showed little reaction to President Bush’s State of the Union speech Tuesday evening. Instead, the focus remained on earnings news.

Stocks rallying sharply on profit reports included J.P. Morgan Chase, up $1.01 to $40.10; truck-parts maker Eaton, up $6.47 to $121.41; money manager Legg Mason, up $4.70 to $89.95; and Internet commerce firm CheckFree, up $4.06 to $34.18.

On the downside, many tech shares lost ground even in the face of robust earnings reports.

Some investors have been concerned that although many tech companies are posting strong 2003 earnings, they are sounding less bullish than hoped about 2004 results.

“Folks are getting away from their infatuation with tech stocks,” said John Caldwell, investment strategist at McDonald Financial in Cleveland.

Motorola fell 24 cents to $16.81, Lucent Technologies gave up 33 cents to end at $4.42, Yahoo was down 28 cents to $47.38, and Advanced Micro Devices slid $1.48 to $15.90.

Intel dropped 41 cents to $32.20 -- its sixth straight decline -- even though the company said it would double its quarterly dividend to 16 cents a share. Intel shares have lost 6% since Jan. 8.

In the bond market, Treasury yields were modestly lower despite the government’s report that housing construction surged in December.

The euro regained more of the ground it lost last week against the dollar, rising to $1.263 from $1.257 on Tuesday.

Gold slipped after the Bundesbank, the world’s second-biggest holder of gold, said it wanted the option to sell 600 tons of the metal, worth $8 billion, during the next five years, Bloomberg News reported.

Germany may seek to start selling gold in September, at the expiration of an agreement by European central banks that limits sales.

In New York, near-term gold futures lost $1.60 to $411.10 an ounce. Gold has fallen from a peak of $426.80 on Jan. 9.

Also in commodities trading, near-term crude oil futures dipped 29 cents to $34.58 a barrel after Saudi Arabian Oil Minister Ali Ibrahim Naimi said producers’ concern about a glut during the second quarter of this year was easing. Analysts said that could mean the Organization of the Petroleum Exporting Countries would at least keep production at current levels, rather than cut further.

Market Roundup, C5-6