Tech shares gain
in mostly down market
By Hope Yen
NEW YORK >> Investors brushed aside a wave of encouraging earnings today, giving blue-chip stocks their sharpest decline in more than two weeks. But tech shares managed a gain on strong results from Microsoft and Intel.
Analysts said many traders were choosing to cash in quick profits from the market's recent rally on fears the advance may have been too much, too soon. Downbeat outlooks from Coca-Cola and 3M added to the pessimism.
"Keep in mind, we've had a pretty substantial rally as a result of the war," said Todd Clark, head of listed equity trading at Wells Fargo Securities. "While earnings have been better than expected, we're having a little bit of a sell-on-the-news mentality."
The Dow Jones industrial average closed down 144.75, or 1.7 percent, at 8,257.61. It was the biggest decline since March 31, when blue-chip stocks finished 153 points lower; the loss also offset much of the 198-point gain in the previous two sessions.
The broader market finished mixed. The Nasdaq composite index rose 3.71, or 0.3 percent, to 1,394.72. The Standard & Poor's 500 index dropped 10.90, or 1.2 percent, to 879.91. The Russell 2000 index fell 1.87, or 0.5 percent, to 377.73.
The price of the Treasury's 10-year note was up 3/8 point, while its yield fell to 3.94 percent from 3.99 percent yesterday. Two-year Treasury notes were up 3/32 point and yielded 1.65 percent, down from 1.70 percent yesterday.
Microsoft rose 30 cents to $24.91 after the software company reported fiscal third-quarter earnings that beat Wall Street's lowered expectations.
Intel climbed $1.02 to $18.15 after the technology giant posted first-quarter profits that beat analysts' estimates by 2 cents per share.
A pair of encouraging economic reports had little effect on investors.
The Labor Department reported consumer prices rose a modest 0.3 percent in March. The gain in the Consumer Price Index, the government's closely watched inflation gauge, was smaller than the 0.6 percent jump in February and better than economists' forecasts.
And the Commerce Department said the number of housing projects started in March jumped by 8.3 percent to a seasonally adjusted annual rate of 1.78 million. The rise followed a 10.4 percent drop in February.
Dow component Coca-Cola slid $2.63 to $39.90 after the soft-drink giant reported earnings that were in line with estimates; however, its volume growth in the first quarter was lighter than expected.
Another Dow component, 3M dropped $4.64 to $129 after J.P. Morgan cut its 2003 and 2004 estimates for the maker of Scotch tape and other products, citing slowing global demand.
Gainers included Ford Motor, which surged 88 cents, or 10.5 percent, to $9.23 after the world's second-largest automaker reported first-quarter earnings that handily beat Wall Street's estimates.
Overseas, Japan's Nikkei stock average finished 0.5 percent higher. In Europe, France's CAC-40 fell 0.9 percent, Britain's FTSE 100 dropped 1.6 percent and Germany's DAX index declined 0.3 percent.