Nasdaq Ends Up 97; Dow Falls 2
Thursday, July 6th 2000, 12:00 am
News On 6
NEW YORK (AP) â€” Stocks ended a volatile session with mixed results Thursday. Most technology shares bounced back from a steep selloff in the previous session, although worries about earnings hurt blue-chip names, including IBM.
The Dow Jones industrial average fell 2.13 points to close at 10,481.47.
Broader stock indicators recovered from earlier losses and closed higher. The Standard & Poor's 500 index was up 10.44 at 1,456.67 and the Nasdaq composite index was up 97.47 at 3,960.57.
Stocks shook off early weakness as investors began bargain hunting, snapping up shares of companies that have been battered in recent sessions. Oracle rose $3.313 to $75.625.
Meanwhile, semiconductor stocks that tumbled on Wednesday staged a modest recovery. LSI Logic rose $2.25 to $52.75 on the New York Stock Exchange and Altera rose $8.125 to $100.563 on the Nasdaq Stock Market.
Also, energy stocks recovered after a number of analysts said a selloff on Wednesday was overdone. The sector suffered after Saudi Arabia said it would begin pumping an additional 500,000 barrels of crude oil per day.
Exxon Mobil rose $1.25 to $78.188.
But concerns about corporate earnings lingered. With interest rates rising, investors have become worried that corporate profits will suffer, and in Wednesday's session, a flurry of profit warnings sent technology stocks dramatically lower.
Some weakness persisted on Thursday. IBM fell for a fourth straight session as investors worried that its second-quarter results will miss expectations. Merrill Lynch analyst Steve Milunovich fueled those fears with a research note indicating that companies that do business with IBM are struggling, and may cut back on orders.
``We thought (the second quarter) would be difficult for IBM but it appears there may be further risk to our numbers, though we are making no changes,'' Milunovich told clients. IBM fell $2.188 to $101.563.
Investors continued their recent pattern of moving money from sector to sector without showing any real conviction. Thursday, the drug stocks that have performed well in recent weeks fell prey to profit-taking. Johnson & Johnson was down $1.313 to $99.688 and Merck was down $1.813 at $75.375.
Analysts said it may be difficult for the market to make a solid advance until companies begin reporting actual numbers later this month. Even then, argued Charles Pradilla, chief investment strategist at SG Cowen Securities, investors will apply fierce standards. Technology stocks, which are still expensive relative to many old-economy stocks, will face the toughest scrutiny.
``When an asset is expensive, very minor disappointments can kill the stock,'' he said. ``With very high valuations, there's very little room for error. They take them out and shoot them if anything goes wrong.''
IBM wasn't the only high-profile technology stock to tumble. Hewlett-Packard fell $1.25 to $118.375 and JDS Uniphase lost $5 to $114.
Advancing issues outnumbered decliners by a 4-to-3 margin on the New York Stock Exchange, where composite volume came to 1.04 billion shares, slightly behind Wednesday's pace.
On the Nasdaq, the breadth was much worse, with three stocks falling for every two that rose.
The Russell 2000 index was up 5.07 at 523.32.
Overseas, Japan's Nikkei stock average fell 0.9 percent. Germany's Xetra DAX index fell 0.2 percent, Britain's FT-SE 100 rose 0.6 percent, and France's CAC-40 fell 0.1 percent.