U.S. blue chips end higher, but tech rally fizzles
(Updates to close)
By Haitham Haddadin
NEW YORK, Oct 24 (Reuters) - Blue-chip stocks closed higher
for the fourth consecutive session on Tuesday, buoyed by upbeat
corporate results, but a rally by high-technology shares
fizzled after computer chip-maker National Semiconductor Corp.
warned of slowing sales.
"Nasdaq continues to walk on egg shells; it is very, very
cautious," said George Rodriguez, senior vice president at
Florida-based investment banking firm Guzman & Co.
"The current psychology ... is that any time there is a
negative number or release seen negative to earnings, investors
savagely attack and beat down those companies."
The blue-chip Dow Jones industrial average <.DJI> ended up
121.35 points, or 1.18 percent, at 10,393.07, based on the
latest numbers.
It was the Dow's fourth straight session of solid gains
since last Wednesday when it plunged, ending below the 10,000
level for the first time since mid-March. The slide last week
came amid worries about slowing U.S. economic growth, high oil
prices, turmoil in the Middle East and dwindling corporate
profits.
The technology-laced Nasdaq Composite Index <.IXIC>
finished down 48.90 points, or 1.41 percent, at 3,419.79 after
jumping more than 1 percent early in Tuesday's session.
The broader Standard & Poor's 500 Index <.SPX> rose 2.35
points, or 0.17 percent, to finish at 1,398.13.
Advancers edged out decliners by a narrow margin of 5 to 4
on the New York Stock Exchange, but Nasdaq breadth tilted to
the negative with seven stocks falling for every six rising.
Old economy companies were buoyed by solid earnings. Out of
the 265 S&P companies that have reported so far this quarter,
57.4 percent have surpassed consensus forecasts, while 17.4
percent have fallen below, and the remaining 25.3 percent have
reported on target, according to I/B/E/S, a tracking firm.
"If you sift through all the reports, we have a lot more
positives than negatives," said Bryan Piskorowski, an analyst
at Prudential Securities. "We've gotten the majority of the bad
news out of the way."
Semiconductors led the fall on the Nasdaq. The Philadelphia
Semiconductor Index <.SOXX> fell 7.83 percent as sectoral
heavyweights eased further as the day progressed, including No.
1 chip maker Intel Corp. <INTC.O>, down $1-5/16 to $42, and
Applied Materials <AMAT.O>, off $4 at $49-7/16.
National Semiconductor <NSM.N> plunged more than 34
percent, ending down $12-5/8 at $24-5/16 on the Big Board, on a
forecast of weak demand from mobile phone and computer makers.
"This is in line with what Intel and some of the key PC
companies have been saying, which is that things haven't picked
up as quickly as anticipated," said Robertson Stephens analyst
Tore Svanberg.
The S&P Computer Hardware Index <.SPCOMP> lost 2.20
percent, tracking the slugging performance of components like
Hewlett- Packard Co. <HWP.N>, one of the 30 Dow stocks, which
fell $5-7/8 to $92-1/2. Gateway Inc. <GTW.N> lost $4.42 to
close at $49.98.
Among the Nasdaq-listed companies, Apple Computer Inc.
<AAPL.O> fell $1-1/2 to $18-7/8, Dell Computer <DELL.O> slipped
11/16 to $26-13/16 and Sun Microsystems <SUNW.O> off 15/16 to
$117-13/16.
And also capping Dow's advance, International Business
Machines Corp. <IBM.N> moved down $1-7/16 to $91-7/16.
Nasdaq was also weighed down by Internet infrastructure
leaders like Cisco Systems <CSCO.O>, and Juniper Networks
<JNPR.O>. Other culprits included fiber-optics giant JDS
Uniphase <JDSU.O>, off $6-1/8 at $95-1/16, a day after stellar
earns by rival Corning Inc. <GLW.N> failed to enthuse
investors. Corning fell $7-15/16 to $93-1/2.
Another big loser was Internet consulting firm MarchFirst
Inc. <MRCH.O>, which was down about 59 percent. The stock,
which headed Nasdaq's most actives list, dropped $6-15/16 to
$4-7/8 after announcing earnings that fell well short of
analysts' estimates, reflecting a downturn in the market and
changing electronic commerce priorities.
Even Sanmina Corp. <SANM.O> reversed early gains to fall
$1-13/16 to $113-13/16. The electronic components maker had
reported late on Monday earnings that more doubled from last
year and beat forecasts by 30 percent.
Meanwhile, the blue chips got a boost from the financial
sector, with J.P. Morgan & Co. <JPM.N>, up $6-5/8 at $145-1/8,
leading the advance in that sector. The Dow average also got a
lift also from consumer products giant Procter & Gamble <PG.N>,
up $4-1/16 to $73-5/8, with the gains coming alongside rival
Colgate-Palmolive Co. <CL.N>, up $3.81 to $53.05 after it
narrowly beat estimates with a 15 percent rise in income.
General Electric Co. <GE.N> also helped the 30-stock Dow
average with a gain of $3-5/8 to $53-3/8, after being beaten
down recently by news of its planned merger with Honeywell Inc.
<HON.N>. Honeywell, also in the Dow, rose $3-3/8 to $53-5/16.
Oil stocks eased despite record earnings from the three
largest U.S. oil companies, Dow member Exxon Mobil Corp.
<XOM.N>, Chevron Corp. <CHV.N> and Texaco Inc. <TX.N>. Exxon
fell $2-5/16 to $86-3/4, Chevron dropped 5/16 to $82-1/4 and
Texaco declined $1-1/16 to $58-1/16.
(( -- Wall Street Desk, 212-859-1881))
REUTERS
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