NEW YORK >> Shrugging off weak earnings news, investors extended their buying spree in the tech sector today while dumping safer blue chips, despite a pessimistic earnings report by Motorola. Nasdaq rises
By Amy Baldwin
for 3rd straight day
but Dow falls
Associated PressThe Dow Jones industrials fell in the face of the tech sector's climb, closing down 89.27 at 10,013.47. In doing so, the Dow gave up some of yesterday's 257-point gain, which had enabled the blue chips to close above 10,000 for the first time since March 15.
The market's broader indicators finished the session mixed. The Nasdaq composite index rose 46.92 to 1,898.95 while the Standard & Poor's 500 fell 2.49 to 1,165.89.
Decliners outnumbered advancers nearly 2 to 1 on the New York Stock Exchange, with 1,928 down, 1,168 up and 197 unchanged. Volume was 1.5 billion shares vs. 1.34 billion yesterday. The NYSE composite index fell 4.83 to 595.00, the American Stock Exchange composite index dropped 8.54 to 877.05 and the Russell 2000 index lost 2.59 to 449.25.
The Treasury's 10-year note fell 9/32 to 99 3/32; its yield rose 4 basis points to 5.12 percent. The 30-year bond gained 5/32 to 96 18/2; its yield fell 1 basis point to 5.61 percent.
"We have been taking two steps forward and one back. And, this is just one back," said Hugh Johnson, chief investment officer for First Albany. "It's sort of a pattern that seems to be evolving. ... It does give you some confidence."
He and other analysts were encouraged that the market managed to keep a large chunk of yesterday's advance despite disappointing earnings news, which also included a warning from data storage company EMC.
However, with first-quarter earnings reports just coming out and the prospect that profits will continue to suffer into next year, Johnson also said it's premature to expect stocks to hold onto gains for longer than a couple sessions.
Analysts also say that tech stocks will rebound first, because they have been beaten up the most, pulling the Nasdaq down more than 60 percent from its high of 5,048.62 posted in March 2000. Techs have garnered a bit more attention recently as the Dow took its turn sliding last month.
The Dow fell below 10,000 last month, skidding on investors' worries that the slumping economy has hurt most businesses, not just high-techs.
Market observers have also cautioned against thinking that any rally will be long-lived or that the bear market has ended. It will take a while for the economy to recover, for earnings to rebound and for investors to regain confidence in stocks.
"We have seen the worst of it, and we are now building a base from which to build up," said Al Mirman, strategist for V Finance in Sarasota, Fla.
Investors were feeling better about the battered tech sector today. Intel, which was downgraded by two investment firms Monday, jumped $2.75 to close at $27.52. Cisco rose $1.54 to $17.40. While other issues fell on their poor earnings news, they didn't drag down the rest of the market, another sign of encouragement, Johnson said.
Motorola slipped 10 cents to $12.90 after it reported yesterday its first quarterly loss in 16 years. The cell-phone maker also expects to lose more money in the second quarter than it did in the first three months of 2001, though it said it expected a rebound in the second half. Data storage company EMC tumbled $2.19 to $32.21 after warning today it will miss first-quarter earnings estimates by 2 cents a share.