Election Section

Market Watch

The Associated Press
Friday March 16, 2001

NEW YORK — The stock market stabilized Thursday following three days of volatile trading, but tense investors traded cautiously amid continuing uncertainty about the economy in this country and overseas. 

Although investors were hoping that the 317-point plunge blue chips took Wednesday would inspire a rally, they saw little reason to do much buying. 

The dive blue chips took Wednesday was particularly unsettling because such upsets had for months been largely reserved for the Nasdaq. Investors had taken comfort in thinking the slowing economy was hurting mostly the tech sector, leaving the broader market relatively intact. 

Thursday’s slim gains followed a positive session in Japan, in which stocks finished up 2.6 percent.  

— The Associated Press 


Economic instability in Japan, where the government admitted that the country is in a state of deflation, helped send shares skidding in the United States and in Europe Wednesday. 

Most analysts doubt the market here will move substantially higher anytime soon. They say investors still are grappling with fears that earnings and the economy will be weak for the foreseeable future. 

“The real question that is smacking us in the eyeballs is, has the stock market reached a level that can be stabilized and investors can be encouraged?” said Hugh Johnson, chief investment officer for First Albany Corp. 

Unfortunately, “this is not an inspiring stock market today,” Johnson said. “I’m not impressed.” 

Thursday’s session mirrored the meager bump-up stocks made Tuesday after the Nasdaq’s big slide the day before. Analysts said that lack of commitment by investors doesn’t bode well for a rally. 

Stocks are expected to remain in a slump until companies report healthier earnings, but based on many firms’ lowered outlooks, it now appears a turnaround might not happen this year. And while the Federal Reserve likely will lower interest rates next week, that widely-anticipated move probably will have little effect on Wall Street. 

Investors’ nervousness and lack of inspiration was clear Thursday in the minimal gain in the Dow, the slight retreat in the Nasdaq and in more movement into safer sectors such as energy stocks, Johnson said. Enron rose $3.78 at $66.53, and Dynegy advanced $2.77 to $48.32. 

Bleak earnings outlooks pulled the tech sector lower. Software maker Intuit plummeted $12.63, or nearly 30 percent, to $29.63 after saying business will grow more slowly than expected. 

Oracle announced after the market closed that its third-quarter earnings met analysts’ lowered expectations. The software maker also warned it’s unsure how the economy will affect business, but its stock gained 11 cents in extended-hours trading, retracing some ground lost in the regular session, where it fell $1.38 to $14.69. 

Advancing issues outnumbered decliners 8 to 7 on the New York Stock Exchange where volume was 1.45 billion shares, compared with 1.63 billion Wednesday. 

The Russell 2000 index, which tracks the performance of smaller company stocks, slipped 1.53 to 452.16. 

European markets closed higher Thursday. Britain’s FT-SE 100 gained 1.8 percent, France’s CAC-40 rose 1.2 percent, and Germany’s DAX index advanced 1.7 percent. 


On the Net: 

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

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