Posted at 11:25 a.m., Monday, July 9, 2001
Comcast bid helps drive blue chip, tech stocks
Associated Press
NEW YORK — Bargain-hunting and news of an unsolicited bid for AT&Ts cable TV business helped revive blue chip and technology stocks today, pushing the major indexes higher after a weeklong slump.
The gains were moderate, though, reflecting investors' unwillingness to make any big moves ahead of upcoming second-quarter earnings reports.
"People are waiting because they're worried. There's a lot of fear there could be more slowness in the economy," said Ronald J. Hill, investment strategist at Brown Brothers Harriman & Co.
The Dow Jones industrial average closed up 46.72 at 10,299.40, according to preliminary calculations, its first advance in a week.
The broader market was also higher, with the Nasdaq composite index rising 22.55 to 2,026.71, and the Standard & Poor's 500 index gaining 8.19 to 1,198.78. The Dow's biggest gain came from AT&T, which rose $1.98 to $18.70 on news that Comcast made an unsolicited $41 billion bid for its Broadband cable TV unit. Comcast fell $2.98 to $39.30. AT&Ts price was adjusted at the start of today's session when its wireless unit was spun off. AT&T's Wireless ended the session lower, down 59 cents at $16.56.
Some bargain-hunting in technology stocks after last week's selloff also helped. EMC rose 72 cents to $22.32, while Advanced Micro Devices gained 40 cents to $21.20. Warnings from both companies helped precipitate the Dow's 227-point decline Friday.
Analysts put little stake in the gains, however, noting that investors remain rattled after warnings from more than 720 companies that second-quarter results will fall below expectations.
They say that before many investors will make a substantial commitment to the market, they must see real proof that the economy and company earnings are indeed turning around. That means better earnings — and more concrete predictions of when business will improve.
"What starts to wear on the psyche of the market are all these warnings about business not getting any better," said Charles White, portfolio manager for Avatar Associates.
Indeed, earnings warnings stressed the market again today. NCR, a maker of cash registers, tumbled $6.07 to $38.70 after announcing it will miss second-quarter earnings expectations by as much as 22 cents a share.
Still, there is some optimism that second-quarter earnings won't be as bad as feared, especially since so many companies have lowered their forecasts and their stocks have already sold off in response.
Advancing issues narrowly outnumbered decliners on the New York Stock Exchange. Volume came to 1.042 billion shares, up from 1.039 billion Friday.
The Russell 2000 index, which measures the performance of smaller company stocks, rose 2.72 to 485.98.
