MARKETS up despite mixed reports on economy

NEW YORK (AP) _ Stocks turned higher Friday as investors, digesting some conflicting economic data, felt more secure about placing bets on Wall Street. <br><br>With Friday's advance, the market continued

Sunday, June 3rd 2001, 12:00 am

By: News On 6

NEW YORK (AP) _ Stocks turned higher Friday as investors, digesting some conflicting economic data, felt more secure about placing bets on Wall Street.

With Friday's advance, the market continued its recovery from a spate of selling prompted by earnings worries and profit-taking

After declining through most of the morning, the Dow Jones industrial average changed direction at midday and closed up 78.47 at 10,990.41. The turnaround was helped by an announcement by AT&T, a Dow component, that it was raising basic residential calling rates, effective July 1.

For the week the Dow was little changed, falling 14.96 or 0.1 percent.

Technology shares rose for a second day, pushing the Nasdaq composite index up 38.95 to 2,149.44. The Nasdaq ended the week down 101.59 or 4.5 percent.

The Standard & Poor's 500 index was up 4.85 at 1,260.67, giving it a 17.22 or 1.3 percent loss for the week.

Alfred E. Goldman, director of market analysis at A.G. Edwards & Sons Inc. in St. Louis, said investors were heartened Friday when the National Association of Purchasing Management's report of continued weakness in manufacturing didn't pull the market down sharply.

``The money on the sidelines said, 'Whoops. I'd better start buying before the boat has left the dock,''' Goldman said.

The market, he added, ``is acting as if it worked off short-term excesses and is ready to move up.''

Shortly after the market opened, the purchasing managers group reported its index of business activity fell to 42.1 in May from 43.2 in April. It was the 10th consecutive monthly decline in the manufacturing sector and a lower reading than analysts expected.

The Labor Department, meanwhile, said the nation's unemployment rate dipped slightly to 4.4 percent in May. The unemployment rate in April was 4.5 percent, the highest in 2 1/2 years. Most analysts had been expecting the jobless rate to rise to 4.6 percent.

But the report indicated manufacturing companies shed 124,000 jobs last month _ the largest payroll reduction so far in that sector, which has lost almost half a million jobs this year.

``There are a lot of cross currents in the market,'' said Eugene G. Mintz, financial markets analyst at Brown Brothers Harriman & Co. in New York.

He noted that investors are worried about second-quarter earnings, which he said ``could probably be the worst of the slowdown.'' Still, Mintz said, ``there's a lot of money sloshing around out there waiting to get into the market.'' He said that when investors began moving, it will be to buy.

A number of companies already have issued warnings about weak profits in the April-June quarter. The latest came Friday from across the industrial spectrum _ DuPont, BellSouth, Frontier Airlines and Cummins, the big Ohio engine company.

A profit warning late Tuesday from Sun Microsystems triggered a tech selloff the next day, but investors by Friday were ready to get back into the sector in hopes of profiting from the expected recovery later year. Sun rose 16 cents on Friday to end the week at $16.63.

William Miller, chief investment officer of large cap equities at American Express Asset Management Group in Minneapolis, noted investors remained skittish because of the mixed economic reports and continuing concerns about profits.

He expects the Federal Reserve to try to boost the economy by cutting interest rates before the end of the summer. That would be the sixth rate cut this year. Fed policy makers next are scheduled to meet June 26-27.

AT&T rose 32 cents to $21.49 after its rate hike announcement. Competitor Sprint was up 65 cents at $20.96. BellSouth, meanwhile, took a hit of 67 cents, dropping to $40.56 on its warning that weak foreign currency exchange rates will cut its second-quarter earnings at least 5 cents a share.

Among the technology shares, Intel rose $1.73 to $28.74, Oracle was up 56 cents at $15.86, and Microsoft rose $1.16 to $70.34.

The Russell 2000 index was up 5.22 at 501.72.

Advancing shares led declining shares 7 to 5 on the New York Stock Exchange, where consolidated volume was 1.18 billion shares, compared with 1.43 billion on Thursday.

Overseas, Japan's Nikkei stock average fell less than a point to 13,261.84. Germany's DAX index rose 0.03 percent, while Britain's FT-SE 100 inched up 0.23 percent and France's CAC-40 dropped 0.23 percent.