US stocks mixed
Divergent signals on the state of US business left investors cautious and prices mixed on Wall Street today.
Upbeat comments from Microsoft and Tiffany encouraged the market, but disappointing statements from Gateway, Ciena and AOL Time Warner limited stocks’ ability to advance.
Blue chips were weaker, falling back moderately after weeks of rallying, but tech shares managed modest gains.
As companies begin releasing fourth-quarter sales and earnings and some warn of weaker results, analysts said a pullback is to be expected with investors cashing in profits from recent rallies.
The Dow Jones industrial average closed down 46.50, or 0.4%, at 10,150.55, after falling 62.69 on Monday to quash a three-session, 238-point winning streak.
The Dow’s slippage today was smaller than the 175 points it has gained so far in 2002. Additionally, the Dow has risen nearly 24% from its low following the September 11 terror attacks.
The broader market was mixed today. The Nasdaq composite index rose 18.63, or 0.9%, to 2,055.73, but the Standard & Poor’s 500 index fell 4.18, or 0.4%, to 1,160.71.
Investors sold off the stocks of companies that reminded the market how tough business still is. Gateway slid 25%, down dlrs 2.56 to dlrs 7.69, on a fourth-quarter revenue warning.
Ciena fell dlrs 1.05 to dlrs 15.70 after chief executive Gary Smith was quoted by Dow Jones News Service as saying sales for the company, along with other telecom equipment makers, would not rebound in the first quarter.
‘‘There is no clear sign of recovery,’’ said Smith.
AOL Time Warner, which reduced its 2002 earnings forecast on Monday, stumbled 68 cents to dlrs 32.
While investors’ increasing confidence in a healthier economy this year has boosted stocks, analysts say the market’s rise will be limited until there are concrete signs of a turnaround.
Still, positive news from several companies triggered some buying. Upscale jeweller Tiffany climbed dlrs 1.95 to dlrs 34.84 after saying its fourth-quarter earnings will be at the high end of previous estimates.
Upbeat comments from Microsoft chairman Bill Gates helped the tech sector shake off the disappointments from Gateway and Ciena. In a keynote speech at the International Consumer Electronics show in Las Vegas, Gates said Microsoft sold 1.5 million Xbox units during the holiday season, and claimed it was the most successful game console launch yet. Microsoft expects to sell six million consoles by the end of 2002.
Microsoft rose 82 cents to dlrs 69.38, and its strength spread to other tech bellwethers. IBM gained 65 to dlrs 124.70, and Intel rose 37 to dlrs 35.58.
Analysts said the market’s restraint was limited by news from the Commerce Department, which reported orders for a wide range of manufactured goods including metals, machinery, cars, computers and household appliances rose in November. Overall, orders to US factories fell by 3.3% in November, but virtually all the weakness stemmed from a huge drop in demand for military aircraft.
Declining issues narrowly outnumbered advancers 16 to 15 on the New York Stock Exchange. Volume was 1.23 billion shares, below the 1.30 billion shares traded on Monday.
The Russell 2000 index, the barometer of smaller company stocks, rose 4.71, or nearly 1%, to 497.89.
