There's not much going on today on Wall Street.
>>Last Update: 11:17 AM ET Aug. 15, 2002
NEW YORK (CBS.MW) -- The stock averages gained altitude for another session Thursday as investors appeared encouraged that the SEC deadline for company CEOs to personally certify their financials had passed without many major problems.
"The market may have been heartened by the lack of last-minute CEO certification snafus," maintained the S&P Investment Policy Committee in its weekly research note
"Market action has been typical after a capitulation. But the easy gains may already have been made. The intermediate-term trend remains bearish. The absence of any strong leadership indicates a period of choppy base-building ahead, with a likely retest of recent lows to occur in the current quarter," S&P claimed.
S&P points out that the near 40-year low in 10-year Treasury yields "probably indicates that it's a good time to move out of bonds. The penalty of being in cash is a lot less than the risk of being overexposed to bonds."
Airline stocks continued to descend after UAL conceded that it may be forced to file for bankruptcy by the fall. But many aerospace stocks found their footing after a few days of selling.
The Dow Jones Industrial Average ($INDU: news, chart, profile) climbed 51 points, or 0.6 percent, to 8,794, fueled by gains in AT&T, McDonald's, Walt Disney, Wal-Mart, Alcoa and Hewlett-Packard. Taking a dip into the minus column were DuPont, Philip Morris and United Technologies.
The Nasdaq Composite ($COMPQ: news, chart, profile) sprinted 11 points, or 0.9 percent, to 1,345 and the Nasdaq 100 Index ($NDX: news, chart, profile) ran up 11 points, or 1.1 percent, to 979.
The Standard & Poor's 500 Index ($SPX: news, chart, profile) advanced 0.8 percent while the Russell 2000 Index ($RUT: news, chart, profile) of small-capitalization stocks rose 0.4 percent.
Volume stood at 514 million on the NYSE and at 669 million on the Nasdaq Stock Market. Market breadth was positive, with advancers outpacing decliners by 18 to 11 on the NYSE and by 15 to 14 on the Nasdaq.
Only minor certification issues
There were only a few restatements after the close Wednesday as many companies scrambled to meet the 5:30 p.m. deadline imposed by the SEC.
Dynegy (DYN: news, chart, profile) said in a filing with the SEC that it may face bankruptcy if it doesn't receive approval for the sale of one of its gas pipelines -- or find another way to honor its near-term obligations. Additionally, the energy trader said it could not certify its financials because of a pending restatement of its 2001 results. Check the story. Shares tumbled 21.5 percent in recent action.
CMS Energy (CMS: news, chart, profile) did not file certifications because it must restate financial results for 2000 and 2001 due to "round-trip" trade issues. The stock edged down 0.4 percent.
And Gemstar-TV Guide (GMST: news, chart, profile) said late Wednesday that it would delay the release of its second-quarter results and restate 2001 financials to reflect $20 million in revenues that it may not receive. See the story. Shares rallied almost 5 percent.
Meanwhile, AOL Time Warner (AOL: news, chart, profile) certified its financials Wednesday but acknowledged that there may have been accounting irregularities in three transactions conducted by its America Online unit. Still, it stressed that the amounts in question were "an insignificant portion of the company's revenue." Shares recently changed hands up 9 percent.
"We are encouraged that AOL Time Warner is taking an active effort in ensuring the clarity of its earnings, particularly at the AOL division. While these transactions are small and further review may amount to nothing more than a fine, we recommend investors to remain on the sidelines as the uncertainty surrounding [the issues] may cause the stock to mark time in the near-term," Merrill Lynch told clients in a research note while maintaining its "neutral" rating on AOL.
H-P on fire, Sun slips; UAL tumbles
The tech sector remained well bid, though a sullen analyst view weighed on some bellwethers in the group.
Dow stock Hewlett-Packard (HPQ: news, chart, profile) gained 2.1 percent following an upgrade from Lehman Brothers to an "equal weight" rating from an "underweight." Analyst Dan Niles said strong printing revenue at H-P was offsetting computing weakness in the second quarter. Fellow hardware stock Dell Computer (DELL: news, chart, profile) also logged gains, rising 0.3 percent ahead of its quarterly results, due out after the close.
Niles also raised his rating of the hardware sector to a "neutral" from "negative" on belief that U.S. enterprise demand has stabilized. But while Lehman was optimistic on H-P and the hardware group, Goldman Sachs presented a glum view on the sector.
Goldman analyst Laura Conigliaro, in fact, downgraded her view on both Sun Microsystems (SUNW: news, chart, profile) and EMC (EMC: news, chart, profile) to a "market outperform" rating, removing the stocks from the "Recommended List." Sun shaved 3.8 percent while EMC rose 0.6 percent.
Conigliaro also lowered her 2003 and three-year estimates on the entire hardware group. "With the weak IT spending environment soon to be entering its third year, our decision to wait out the slowdown has long ceased to be realistic," she told clients.
UAL Corp. (UAL: news, chart, profile), the parent of United Airlines, extended the devastating losses suffered over the past few trading days, falling another 11 percent. The carrier said after the close Wednesday that it could file for bankruptcy by the fall and increased its pursuit of a $1.8 billion federal loan guarantee. See the full story.
Merrill Lynch cut UAL to a an intermediate- and long-term "reduce/sell" rating from a "neutral" on belief shares will continue to decline as the prospects of a Chapter 11 bankruptcy filing hang over the stock. Salomon Smith Barney also lowered its rating on UAL to a "neutral" from an "outperform." Among other stocks in the group, AMR shed 0.5 percent and Continental 5.3 percent.
In the drug sector, Bristol-Myers Squibb (BMY: news, chart, profile) tumbled over 7 percent after indicating in a regulatory filing late Wednesday that an SEC inquiry could force it to restate its financials. The drugmaker also warned that the SEC's look into overstocking of drug wholesaler inventory could lead to a more formal investigation. See the full story.<<
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