By Amy Baldwin
NEW YORK – Investors seeking safer havens bought up blue chips Thursday but sold off riskier, technology shares amid worries about how long and how much the slumping economy will suffer from the terrorist attacks.
But Wall Street’s gains didn’t spell confidence in the stock market or the economy, analysts said. Rather, institutional investors, such as mutual fund managers, were simply rearranging portfolios to have a heavier focus on safer, so-called defensive sectors, before the quarter closes Friday.
“Don’t hold your breath. I wouldn’t read too much into this today … The stock market is sorting out stuff. People are shifting around in their portfolios, getting more defensive,” said Jon Brorson, director of equities at Northern Trust in Chicago.
The Dow Jones industrial average finished up 114.03 at 8,681.42, according to preliminary calculations, after trading in negative territory most of the session.
The broader market was mixed as the Nasdaq composite index slipped 3.32 to 1,460.72, and the Standard &Poor’s 500 index rose 11.57 to 1,018.61.
Trading carried a cautious tone as many on Wall Street remain reluctant to make big commitments until it becomes clearer how and when the United States will retaliate for the Sept. 11 assaults on the World Trade Center and Pentagon. It also took most of session for defensive sectors, such as drug and consumer product companies, to pull the Dow higher.
Among the advancers were drug maker Merck, up $2.86 at $66.21, tobacco company Philip Morris, which climbed $2.14 to $49, and consumer products giant Procter &Gamble, up $1.27 at $72.40. All three are Dow stocks.
Other winners came out of the defense industry, which is expected to land more business from the U.S. government as it retaliates for the attacks. Northrop Grumman gained $4.37 to $102.97, and Lockheed Martin rose $1.30 to $43.30.
But analysts weren’t boasting about the market’s upward moves, because it centered on safer bets. They also noted that volume was light for much of the day as some traders were off for the Jewish holiday Yom Kippur.
And, analysts and investors remain quite concerned about the toll the economy will take from the attacks. A litany of companies have already slashed thousands of jobs and warned of lower sales and profits, saying skittish consumers have further cut their spending.
“Not very many people want to take aggressive positions on either side of the market,” said Dan Ascani, president and research director at Global Market Strategists in Gainesville, Ga. “The market is still worried.”
The market was able to bounce higher despite two reports showing that the economy remains quite weak. Analysts said Wall Street was expecting both the rise in unemployment and the decline in sales of manufactured goods.
The Labor Department said jobless claims last week shot up to a nine-year high, in part reflecting the impact of the terrorist attacks. The increase was in part attributed to layoffs and job dislocations stemming from the Sept. 11 attacks on the World Trade Center and Pentagon.
Also, the Commerce Department reported that orders to American factories for big-ticket manufactured goods edged down in August, the third straight monthly decline.
The market’s losses were concentrated in riskier sectors, such as technology, which has been hurt the most as the economy began slowing last year. IBM fell $1.30 to $90, while Cisco Systems stumbled 99 cents to $11.24.
Another vulnerable spot was airlines, which traded lower even as President Bush at midday unveiled several security measures at a news conference at Chicago’s O’Hare Airport.
Delta Airlines, which announced it was laying off 13,000 employees, or 15 percent of its work force, Wednesday, fell 50 cents to $24.36. Continental, which began implementing 12,000 layoffs last week, stumbled $1.75 to $13.
Advancing issues outnumbered decliners slightly more than 3 to 2 on the New York Stock Exchange. Volume came to 1.45 billion shares, down from the 1.54 billion shares traded on Wednesday.
The Russell 2000 index, the barometer of smaller company stocks, rose 3.17 to 392.96.
Overseas markets were higher Thursday. Japan’s Nikkei stock average ended the day up 0.6 percent. France’s CAC-40 finished with a gain of nearly 1.0 percent, while Britain’s FT-SE 100 rose 1.4 percent and Germany’s DAX index rose 2.2 percent.
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