Mixed bag on Wall Street as investors fret


Associated Press

NEW YORK – Stock prices were mixed today as investors worried about corporate profits and the moderating economy once again unloaded technology issues.

Blue chips fared somewhat better, but were unable to rally the overall market because of ongoing fears that third-quarter results for many of Wall Street’s highest profile and most expensive stocks will be disappointing.

The Dow Jones industrial average closed up 49.21 at 10,700.13.

Broader indicators were lower.

The Nasdaq composite index fell 103.92 to 3,568.90 after moving higher earlier in the day. The Standard &Poor’s 500 index was off 0.28 at 1,436.23.

“The volatility is going to stay with us because valuations for stocks aren’t cheap, especially in technology,” said Rick Jandrain, chief investment officer for equity securities at Banc One Investment Advisors in Columbus, Ohio. “In 1999, the market was just dominated by technology and this year it’s totally different. The non-tech part of the market is doing better.”

The market fell sharply during September amid growing uneasiness about profits, not just for the third quarter, but also the coming quarters.

Investors are nervous because of increasing indications that the economy is slowing, the latest being an industry report today that suggested the nation’s manufacturing activity contracted for the second straight month.

The market has fallen into a pattern of selling stocks that appear vulnerable or warn of poor performance. Today that anxiety focused on technology issues, which have traded at especially high levels in recent years.

Chipmaker Intel fell $1.44 to $40.13, extending a decline triggered by a profit warning last month. Microsoft was down $1.13 to $59.13 and Web portal Yahoo! dropped $4.94 to $86.06. Computer maker Dell dropped $1.56 to $29.25.

But telecom equipment maker Lucent climbed $2.44 to $31 today, as did rival Nortel Networks, which was up $2.25 at $62.38.

Gary Kaltbaum, a technical analyst at JWGenesis, said Lucent’s popularity with investors today only reflects how cheap the stock has become. He believes tech issues, as a sector, remain depressed.

“When you have names like Intel and Dell and Microsoft under pressure, you can’t expect much,” he said. “I think it goes back to when market favorites and leaders are under pressure, the soldiers that fall behind them can’t do so well.”

Non-tech issues also lagged.

Boeing fell $4.69 to $58.44 after Lehman Brothers downgraded the stock from “outperform” to “neutral.”

Xerox warned late today after trading that its earnings would be below expectations, an announcement likely to trigger volatility in its own stock Tuesday.

But there were also some upturns.

Investors looking for good buys today bid Electronic Data Systems up $2.31 to $43.81 after a Goldman Sachs analyst upgraded the stock to “Recommended for Purchase” from “Market Outperformer.”

Meat processor IBP rose $3.44 at $21.75 on news it was being acquired by the investment unit of Donaldson, Lufkin &Jenrette for $2.4 billion in cash.

Summit Bancorp rose $3.63 to $38.13 on news it was was being purchased by FleetBoston Financial for $7 billion. FleetBoston’s shares fell 50 cents to $38.50. Shares of Merrill Lynch traded higher, up $3.50 at $69.50 on rumors the financial services company might be a possible target for a takeover.

Energy issues were higher on persistent worries about higher oil prices and conflict in the Middle East. Exxon Mobil was up $2.31 at $91.44. Schlumberger rose $2.63 to $84.94.

Declining issues outnumbered advancers by a 7-to-5 margin on the New York Stock Exchange, where volume came to 1.24 billion shares, compared to the 1.41 billion in the previous session.

The Russell 200 index fell 9.70 to 511.67.

Overseas, Japan’s Nikkei stock average rose 0.99 percent. Germany’s DAX index was up 0.94 percent, Britain’s FT-SE 100 slipped 0.15 percent, and France’s CAC-40 was up 1.32 percent.

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

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