Market Watch

The Associated Press
Thursday March 08, 2001

NEW YORK — Buyers gave Wall Street its longest winning streak of the year, dominating major market indexes for a third straight day Wednesday despite profit warnings from JDS Uniphase and Broadcom. 

But the prospects of at least the Nasdaq composite index extending its gains were diminished when tech bellwether Yahoo! lowered its earnings forecasts and announced a management shakeup. Yahoo tumbled 11 percent in after-hours trading, while other tech stocks were mixed. 

All three indexes have moved higher this week, lifted by the first steady buying in weeks. But even before Yahoo’s announcement, which came after the close of trading, analysts were split over how long-lived the rally will be. Worries persist about the health of the economy and when corporate profits will improve. 

Wall Street spent much of the day focused on Yahoo. Soon after the session opened, the Nasdaq Stock Market halted trading in Yahoo, and the company said it would issue a 5 p.m. EST announcement. Investors expected that the news would be bad. Yahoo tumbled $1.38 to $21, a more than 6 percent decline, before trading stopped. It fell further in extended trading, dropping $2.31 to $18.69, after the company reduced its first-quarter outlook and announced a search for a new chief executive. 

“The encouraging thing was that the Nasdaq was even up today given all the bad news about earnings,” said Rafael Tamargo, director of equity research at Wilmington Trust. “Three days in a row is encouraging, even though these gains haven’t been huge.” 

Investors generally were able to tolerate other bad earnings news, punishing but not devastating those with disappointing announcements. JDS Uniphase, which reduced its quarterly forecasts on soft demand, slipped $1.06 to $26.94 in regular trading. And investors sold chip maker Broadcom, down $7.63 at $40.25, which also lowered its quarterly expectations. 

Tobacco and financial issues, areas that investors have favored in recent weeks as hedging in the uncertain economic environment, were strong.  

— The Associated Press 


Philip Morris rose $1.21 to $50.04, while J.P. Morgan Chase gained $2.29 to $50.25. 

“There’s some improvement out there, but people are not quite willing to bet the ranch,” said Brian Belski, a fundamental market strategist with U.S. Bancorp Piper Jaffray. 

Bullish comments from influential Goldman Sachs chief investment strategist Abby Joseph Cohen also encouraged investors. 

“We believe that attractive equity valuation has been restored and forecast yearend 2001 price levels of 1,650 and 13,000 for the S&P 500 and DJIA,” she said in a note to clients. 

Trading was moderate. Advancing issues outnumbered decliners 3 to 2 on the New York Stock Exchange. Consolidated volume came to 1.34 billion shares, compared with 1.28 billion at the same point Tuesday. 

The Russell 2000 index rose 3.71 to 484.84. 

Overseas, trading was mixed. Japan’s Nikkei stock average rose 0.3 percent. Germany’s DAX index was up 0.3 percent, Britain’s FT-SE 100 dropped 0.2 percent, and France’s CAC-40 gained 0.5 percent. 


On the Net: 

New York Stock Exchange: http://www.nyse.com 

Nasdaq Stock Market: http://www.nasdaq.com