Closing Market Report

Star-Bulletin news services

Tuesday, June 12, 2001

Dow rebounds,
Nasdaq flat after
Nokia warning

By Amy Baldwin
Associated Press

NEW YORK >> Wall Street averted a third day of sharp losses today, turning mixed in late trading despite an earnings warning from Nokia that sent stocks tumbling earlier.

The Dow Jones industrial average finished up 26.29 at 10,948.38, recovering from an earlier loss of 133.51. In trading Friday and yesterday, the Dow dropped 167 points.

Wall Street's broader market indicators were narrowly mixed. The Nasdaq composite index slipped 0.83 to 2,169.95, while the Standard & Poor's 500 index inched up 1.46 to 1,255.85. Decliners edged advancers on the New York Stock Exchange, with 1,545 down, 1,540 up and 210 unchanged. Volume was 1.13 billion shares vs. 853.21 million yesterday.

The NYSE composite index fell 0.29 to 637.08, the American Stock Exchange composite index rose 8.78 to 937.12 and the Russell 2000 index was unchanged at 506.93. The Treasury's 10-year note rose 7/32 to 98 3/32; its yield fell 3 basis points to 5.25 percent The 30-year bond rose 14/32 to 96 1/32; its yield fell 3 basis points to 5.65 percent.

Stocks initially fell and continued to slide after Nokia warned that second-quarter earnings and revenue will be lower than expected. The announcement exacerbated investors' fears about a delayed rebound in the economy, and in turn, earnings.

"It brings into question whether the economy is really go to turn around in the second half," said Ricky Harrington, a technical analyst for Wachovia Securities in Charlotte, N.C., of Nokia's announcement.

Nokia was among today's biggest losers, falling $5.45 to $23.26, a loss 19 percent.

The firm's news hurt companies that supply it with equipment to make mobile phones. Qualcomm fell $1.81 to $57.97. Competitors also suffered; Motorola declined 86 cents to $14.

But the overall market began to recover late in the session as investors got some positive news. Dell Computer, for example, rose 84 cents to $26.10, after its shares were upgraded by Morgan Stanley, which said the personal computer market is stabilizing

Other tech issues seemed to benefit from the prospects that demand for their products will likely improve. Hewlett-Packard finished up 50 cents at $28.30.

The Dow was hurt by Honeywell, which fell $1.78 to $43.47. Facing a Thursday deadline for making antitrust concessions in its $43 billion bid to acquire Honeywell, General Electric is under pressure by European regulators to sell more than half of Honeywell's aerospace division, according to a report published in The Wall Street Journal.

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