Posted at 12:03 p.m., Thursday, January 15, 2004
Investors take profits as stocks end mixed
• Hawai'i Stocks
• Updated Market Chart
By Michael J. Martinez
Associated Press
Many investors chose to look at the economy’s strengths — a major banking merger, a strong 2004 outlook from International Business Machines Corp. and a modestly improving labor market — instead of focusing on drearier topics.
"Any kind of news that appears to be bad news, there’s a bullish argument to spin it the other way," said Keith Keenan, vice president of institutional trading at Wall Street Access. "This is a very short-term market that wants to see positive news."
But others decided to lock in profits from the market’s 2004 rally, touching off an early round of selling that never quite went away.
According to preliminary calculations, the Dow Jones industrial average closed up 15.48, or 0.2 percent, at 10,553.85. The Dow was down as much as 54 points earlier in the day.
Broader stock indicators were narrowly mixed. The Nasdaq composite index ended down 2.05, or 0.1 percent, at 2,109.08, while the Standard & Poor’s 500 index finished up 1.46, or 0.1 percent, at 1,131.98.
IBM led the gainers, trumping Wall Street’s earnings expectations and voicing a very positive outlook for the year. This mollified investors concerned about Intel Corp.’s more timid first-quarter outlook yesterday. IBM closed up $3.71 at $94.02, having flirted with its 52-week high earlier in the day, while Intel was down 33 cents to $33.06.
Today’s session illustrated the power that future earnings reports will have in setting the mood of the market in coming weeks, according to Michael Sheldon, chief market strategist at Spencer Clarke LLC.
"We’ll have half the S&P 500 reporting by the end of January," Sheldon said. "Optimism may have gotten ahead of itself. If we see more outlooks like Intel, then you could see a brief pullback."
Some investors, however, looked to the proposed $58 billion merger between J.P. Morgan Chase and Bank One Inc. announced yesterday. Bank One closed up $5.20 at $50.42, while J.P. Morgan Chase fell 30 cents to $38.92.
"That’s a definite signal that the Street really likes this deal," Keenan said. "The valuation is fair, the deal makes sense. This helps the whole sector."
Two banks waiting to close their merger, Bank of America Corp. and FleetBoston Financial Corp., released their respective earnings before the start of trading, with both beating Wall Street’s expectations. Bank of America fell 57 cents to $78.68, while Fleet was down 48 cents to $42.60.
Wachovia Corp., which met analysts’ expectations in its earnings today, dropped 75 cents to $46.55.
The government’s latest economic reports were mixed, allowing investors to pick and choose their personal barometers. Consumer prices were up 0.1 percent in December, a slight rise that met analysts expectations. First-time unemployment claims fell by 11,000, with the four-week average of new claims at its best level in three years. However, retail sales climbed only 0.5 percent in December.
