Tech stocks stem Wall Street sell-off
Technology stocks helped Wall Street rebound Wednesday from a midday sell-off tied to worries about the economy, leaving the market overall mixed for the session.
Crude oil prices rose as high as $89 a barrel, then retreated to close off modestly. Treasury bond yields tumbled on hopes for more interest-rate cuts by the Federal Reserve.
In the stock market, the tech-dominated Nasdaq composite index jumped 28.76 points, or 1%, to 2,792.67, led by Yahoo and Intel after those industry bellwethers issued upbeat quarterly reports.
The Dow Jones industrial average ended with a loss of 20.40 points, or 0.2%, at 13,892.54, after being down as much as 138 points.
“Nasdaq was really all about the good earnings news. People are really enthusiastic about Yahoo and Intel,” said Giri Cherukuri, head trader at OakBrook Investments in Lisle, Ill.
“The broader market was weighed down on concerns about economic weakness and the high oil price,” he said.
The Fed damped investors’ interest in stocks after its latest report on regional economic conditions showed the pace of growth has slowed since August and housing markets continued to weaken.
Also Wednesday, the government said housing starts slid in September to their lowest level in more than 14 years.
Manufacturing conglomerate United Technologies, one of the 30 Dow stocks, also weighed on investor sentiment after the company reported a 20% rise in third-quarter earnings but warned that it saw international growth moderating in 2008.
United Technologies shares fell $2.85 to $76.80.
With two hours to go in the session, however, investor enthusiasm for tech shares including Yahoo and Intel appeared to spill into the broader market.
Yahoo jumped $2.13 to $28.82 after the Internet giant late Tuesday reported quarterly earnings growth that beat expectations. Chip leader Intel rose $1.24 to $26.72, a 52-week high, after it also beat profit estimates.
And EBay rose $2 to $40.60 ahead of its earnings report.
By the end of the day, winners modestly outnumbered losers on the New York Stock Exchange and on Nasdaq.
The Standard & Poor’s 500 index edged up 2.71 points, or 0.2%, to 1,541.24.
There was some good news from the battered financial sector. JPMorgan Chase rose $1.26 to $46.37 after reporting higher third-quarter earnings, as gains on private equity investments offset debt write-downs.
But mortgage insurer MGIC Investment slumped $4.71 to $26.16 after reporting a third-quarter loss tied to rising loan defaults. The firm also forecast it wouldn’t be profitable in 2008.
Among rival mortgage insurers, Ambac Financial slid $1.44 to $62.97 and PMI Group tumbled $2.86 to $26.65.
Worries about the economy translated into renewed expectations that the Federal Reserve would continue to cut interest rates. That triggered heavy buying of Treasury securities, driving yields down.
The yield on the three-month T-bill slid to 3.99% from 4.25% on Tuesday. The 10-year T-note yield sank to 4.55% from 4.65%.
In the municipal bond market, California sold $2.5 billion of general obligation bonds at yields that were slightly below expectations, dealers said.
Among the day’s market highlights:
* Near-term crude oil futures ended down 21 cents at $87.40 a barrel after rising for six straight sessions. A vote by Turkish lawmakers allowing the use of military force against Kurdish rebels in northern Iraq helped push oil briefly to a fresh record of $89 before prices retreated.
* Among Dow stocks, IBM sank $3.82 to $115.78 as investors showed disappointment with the computer-services company’s quarterly profit report, which showed an unexpected drop in revenue from hardware.
But Coca-Cola gained $1.33 to $59.09. The world’s largest soft-drink maker said quarterly profit climbed to 71 cents a share from 62 cents a year earlier on gains in Asia and Latin America.
* Home builders’ shares fell for a fourth session, with some hitting new multiyear lows -- including Lennar, down 74 cents to $22.23; Standard Pacific, down 34 cents to $3.96; and D.R. Horton, down 25 cents to $12.61.
* Thornburg Mortgage dropped $1.36 to $10.04. The lender, which was forced to sell $21.9 billion of assets at a loss in August, said it wouldn’t pay a quarterly dividend for the first time in its 14-year history.
* New York Times dropped 43 cents to $18.48, its lowest level of the decade, on rumors that Morgan Stanley was selling its 7.3% stake rather than push further for the company to reduce the voting power of the controlling Sulzberger family.
