Posted at 11 a.m., Thursday, August 2, 2001
Some buying, some selling in mixed market
Associated Press
NEW YORK — Taking few chances in a still uncertain economy, investors cashed in their profits today but also did some selective buying, giving stocks a moderate advance.
Wall Street remained skeptical that business is really improving and that the market can hold on to any of it gains. And so an early morning advance faded, forcing the Dow Jones industrials to backtrack from a nearly 100-point rise.
The Dow closed up 41.17 at 10,551.18, according to preliminary calculations.
Broader stock indicators also rose, but dropped from their highs for the day. The Nasdaq composite index gained 19.00 to 2,087.38, while the Standard & Poor's 500 index advanced 4.82 to 1,220.75.
"Investors are probably being a little more aggressive than they have been, but they're not willing to chase the market too much," said Robert Harrington, co-head of listed block trading at UBS Warburg. "People also are not truly convinced that things are getting better, so you probably had some taking advantage of the rally to sell stocks."
Chip stocks were among the market's strongest sectors, building on an advance that began yesterday on a series of upgrades by Merrill Lynch. Intel, a Dow component, rose $1.36 to $32.11 after its chief executive told the Reuters news service the worst appears over for the computer industry, but said a rebound depends on global conditions.
The enthusiasm also spread to the broader tech sector. Gateway gained 61 cents to $11.21, a 5.7 percent gain. Microsoft rose 98 cents to $67.45, despite a court ruling that makes speedy resolution of the government's antitrust case unlikely. A federal appeals court reiterated its decision to send the government's antitrust case against the software maker back to a lower court.
Among blue chips, DuPont rose 64 cents to $42.67, while Alcoa dropped 56 cents to $37.85.
The stock market had rallied the first part of the week, largely out of relief that a dismal second-quarter earnings season has ended. Wall Street got a further lift yesterday from the comments by semiconductor makers and upgrades in the sector by Merrill Lynch. The sector was one of the first to fall last year, when the market's downturn began, so its revival could signal better times ahead.
But today, caution reasserted itself. Trading slowed as the day wore on, while wary analysts warned that companies are still struggling with a weak business environment.
"I'd be more encouraged with positive profit or economic news," said Tom Galvin, chief investment officer at Credit Suisse First Boston, who doubts a significant advance is possible until that happens.
The major stock indicators are all below where they started 2001, despite six interest rate cuts by the Federal Reserve. The Dow is off 2 percent, the Nasdaq nearly 16 percent, while the S&P has lost more than 7 percent.
Also today, the Labor Department reported new claims for state unemployment insurance fell last week to their lowest level since mid-February. It was the third sharp decline in a row, suggesting the rash of layoffs seen in recent months might be moderating.
Advancing issues led decliners 3 to 2 on the New York Stock Exchange. Volume came to 1.21 billion shares, compared with the 1.30 billion yesterday.
The Russell 2000 index slipped 0.26 to 488.98.
Overseas, Japan's Nikkei stock average climbed 3.7 percent. European stocks were mixed. Germany's DAX index fell nearly 1.0 percent, Britain's FT-SE 100 rose 0.7 percent, and France's CAC-40 dropped 0.5 percent.
