Features

MARKET ROUNDUP

The Associated Press
Wednesday May 30, 2001

NEW YORK — Technology stocks fell for a second straight session Tuesday as investors, unconvinced that the sector will recover by year’s end, cashed in profits from the market’s big spring rally. 

Blue chips fared better, eking out a small gain as Wall Street shifted its focus to industrial and pharmaceutical issues. 

The Dow Jones industrial average closed up 33.77 at 11,039.14, recovering from a brief dip below 11,000 during the session. 

Broader stock indicators fell. The Nasdaq composite index was down 75.49 at 2,175.54, while the Standard & Poor’s 500 fell 9.96 to 1,267.93. 

The pullback following the recent runup in stock prices reflected concerns that earnings still aren’t likely to improve in the near term, analysts said. But with trading light as many people extended their holiday weekends, activity on Wall Street was largely a sign of profit-taking. 

“The truth of the matter is you’re not going to see any positive signs for another three or four months,” said Charles White, portfolio manager at Avatar Associates. 

“But I would hesitate to place any real significance on the price action today, just based on the fact that it’s happening in very low volume and very thin trade,” he said. 

Selling was spread across the technology sector, but earnings news was paramount. 

Sun Microsystems fell $1.80, to close at $18.67 in trading Tuesday. In extended trading, shares lost another $1.16, to finish at $17.51, after the company warned that fourth-quarter results would fall below already reduced expectations. 

The bad news – and anticipation leading up to Sun’s announcement – gave investors more incentive to sell tech issues. Intel fell 22 cents to end at $27.63 in the after-hours session, compounding a $1.25 loss in regular trading. 

EMC also fell, down 59 cents to $33.40 by the end of extended trading Tuesday, on top of a $3.11 loss in the regular session on news the company plans 1,100 job cuts. 

Blue chips were boosted by gains in Merck, up $1.79 at $74.39, and DuPont, which rose $1.20 to $46.82. 

Ongoing speculation about a merger between Lucent and Alcatel sent Lucent down $1.08 to $8.32, while Alcatel slid 70 cents to $27.41.  

After regular trading ended, the companies said the merger talks had been terminated, but provided no other details. The decision sent both companies’ stocks higher in the extended session, with Lucent rising 28 cents and Alcatel picking up $1.79. 

“I think this is just a pause that will refresh later on for the market,” said Steven Goldman, market strategist at Weeden & Co. “The overall market is holding up quite well.” 

— The Associated Press 

 

Investors also were digesting two reports Tuesday focusing on the role of consumers in the economy. 

The Commerce Department reported consumer spending rose by 0.4 percent in April, its biggest increase since January, but showed a reduction in spending on big-ticket items such as cars. Consumer spending accounts for two-thirds of all economic activity and has been a main pillar supporting the country’s economy. 

A second report showed consumer confidence bounced back in May after a sharp decline in April, underscoring increased optimism about jobs and the future of the U.S. economy. The Conference Board said its Consumer Confidence Index rose to a greater than expected 115.5 from a revised 109.9 in April. Analysts were expecting a reading of 112. 

Declining issues outnumbered advancers 8 to 7 on the New York Stock Exchange. Consolidated volume came to 1.24 billion shares, up from 991.22 million in Friday’s pre-holiday trading. 

The Russell 2000 index was down 6.25 at 502.37. 

Overseas, stocks were mixed. Japan’s Nikkei stock average rose 0.26 percent. Germany’s DAX index was down 1.55 percent, Britain’s FT-SE 100 was down 0.44 percent, and France’s CAC-40 was down 1.14 percent. 

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On the Net: 

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