Blue chips end strongly, tech concerns linger


Associated Press

NEW YORK — The prospect of a resolution to the presidential election dispute sent the Dow industrials sharply higher today, but investors were more restrained about high-tech companies amid lingering earnings concerns.

"Getting the election settled is of primary importance to the markets," said Thom Brown, portfolio manager for Rutherford, Brown &amp Catherwood. "The market hates uncertainty. It doesn’t really matter who wins. Just getting it over with would help."

The Dow Jones industrial average soared 187.41 to close at 10,560.95.

Broader indicators were mixed. The Nasdaq composite index, which ended last week down 9 percent, fell 29.04 to 2,616.25. The Standard &amp Poor’s 500 index rose 9.83 to 1,325.06.

In recent sessions, investors had more or less shrugged off the political uncertainty, preferring to focus on what they know quite well: Earnings are key to stock prices. But today, fears about falling corporate profits were second to news about the election.

For most of the day, blue chips posted moderate gains and technology issues were down. But stocks rose soon after the U.S. Supreme Court set aside a Florida high court ruling that permitted selective manual recounts in Florida’s contested presidential election, and sent the case back "for further proceedings."

After the decision, "stocks popped," said A.C. Moore, chief investment strategist for Dunvegan Associates in Santa Barbara, Calif., because investors saw an end soon to the presidential election uncertainty.

But the Nasdaq, which has been most vulnerable lately to investors’ uneasiness about earnings, was unable to hold its modest gains.

Since Election Day, investors have alternated between two strategies: selling off stocks in general, or seeking relative safety in blue chips while also bargain hunting in the beaten-down high-tech sector. But increasing worries about shrinking corporate profits and an economic slowdown, have kept the market’s rallies from lasting more than a session or two at a time.

Nasdaq gainers today included software maker Oracle, which rose $1.75 to close at $28.19, and fiber optic company Ciena, up $3.25 at $80.19.

But network equipment maker Cisco Systems, which closed down $1.81 at $46.69, and WorldCom, which slipped $1.19 to $14.81, helped keep the Nasdaq in negative territory.

Blue chips got a boost from pharmaceuticals, considered safer buys in bearish markets. Pfizer rose $1.06 to $44.50 and Johnson &amp Johnson rose $1.88 to $99.63.

Retailing stocks, which fell over the past week due to declining consumer confidence, also ended higher. Wal-Mart soared $2.31 to $53.50 and Gap advanced $1.69 to $26.44.

Investors also bid up PepsiCo after it sealed a deal to buy Quaker Oats over the weekend. PepsiCo rose $1.38 to $43.75 and Quaker advanced $1.94 to $90.94. Both were among the most actively traded stocks on the New York Stock Exchange.

Two economic reports gave investors more reason to fear the economy is slowing faster than is desirable, and analysts said that fed some of the selling in high-tech stocks.

The government reported Monday that Americans bought fewer new homes in October. A separate report by the Conference Board reported that its Index of Leading Indicators, a key gauge of future economic activity, fell 0.2 percent in October, suggesting further slowing for the U.S. economy well into next year.

But the reports also gave Wall Street more reason to hope that the Federal Reserve when it meets Dec. 19 will say that inflation poses less threat to the economy, which could be a precursor to lower interest rates next year.

The Russell 2000 index, which tracks the performance of smaller companies, fell 6.45 to 450.39.

Advancing issues matched decliners on the NYSE where volume was 1.08 billion shares, down significantly from 1.18 billion Friday.

Overseas, Japan’s Nikkei stock average rose 0.8 percent. European markets were lower. Germany’s DAX index fell 1.6 percent, Britain’s FT-SE 100 lost 0.2 percent, and France’s CAC-40 slipped 2.3 percent.

Copyright ©2000 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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