Cautious investors
send stocks higher

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By Lisa Singhania
Associated Press

NEW YORK >> Taking few chances in a still uncertain economy, investors cashed in their profits today but also did some selective buying, giving stocks a moderate advance.

Wall Street remained skeptical that business is really improving and that the market can hold on to any of it gains. And so an early morning advance faded, forcing the Dow Jones industrials to backtrack from a nearly 100-point rise.

The Dow closed up 41.17 at 10,551.18.

Broader stock indicators also rose, but dropped from their highs for the day. The Nasdaq composite index gained 19.00 to 2,087.38, while the Standard & Poor's 500 index advanced 4.82 to 1,220.75.

Advancers led decliners 3 to 2 on the New York Stock Exchange, with 1,771 up, 1,294 down and 227 unchanged. Volume was 1.21 billion shares, vs. 1.30 billion yesterday.

The NYSE composite index rose 1.25 to 618.40, the American Stock Exchange composite index lost 1.78 to 891.67 and the Russell 2000 index slipped 0.25 to 488.99.

The Treasury's 10-year note fell 1 932 to 98 78; its yield rose 8 basis points to 5.15 percent. the 30-year bond fell 2332 to 97 332; its yield rose 5 basis points to 5.58 percent.

"Investors are probably being a little more aggressive than they have been, but they're not willing to chase the market too much," said Robert Harrington, co-head of listed block trading at UBS Warburg. "People also are not truly convinced that things are getting better, so you probably had some taking advantage of the rally to sell stocks."

Chip stocks were among the market's strongest sectors, building on an advance that began yesterday on a series of upgrades by Merrill Lynch. Intel, a Dow component, rose $1.36 to $32.11 after its chief executive told the Reuters news service the worst appears over for the computer industry, but said a rebound depends on global conditions.

The enthusiasm also spread to the broader tech sector. Gateway gained 61 cents to $11.21, a 5.7 percent gain. Microsoft rose 98 cents to $67.45, despite a court ruling that makes speedy resolution of the government's antitrust case unlikely. A federal appeals court reiterated its decision to send the government's antitrust case against the software maker back to a lower court.

Among blue chips, DuPont rose 64 cents to $42.67, while Alcoa dropped 56 cents to $37.85.

After the market closed today, the Walt Disney Co. reported that profits and reve- nues were essentially flat in the third quarter, due mainly to soft ad sales at its ABC Television network and cable channels and a decline in attendance at its theme parks.

The world's second-largest media company reported a 26 percent drop in net income, due to one-time charges taken to reflect 4,000 job cuts and the closing of its DisneyQuest virtual theme park in Chicago.

For the quarter ended June 30, the company reported net income of $392 million on revenues of $5.97 billion, compared with income of $530 million and revenue of $6 billion in the same period last year.

Earnings excluding one-time charges were $479 million, or 23 cents per share, compared with $495 million, or 23 cents per share in the same period last year. The results beat expectations of analysts surveyed by Thomson/First Call, who had been expecting earnings of 21 cents per share.

Disney saw operating income in its media networks division drop 29 percent in the quarter, to $470 million, because of declining advertising sales at ABC and the company's television and radio stations.

Income from its parks and resorts dropped 1 percent as declining attendance was offset by cost-cutting measures.

Disney's movie studio saw a dramatic rise in revenue and profits because of the release of movies such as "Pearl Harbor" and its animated feature "Atlantis."

Revenue increased 8 percent to $1.3 billion, while income rose to $65 million, compared to a loss of $1 million in the same quarter last year.

Meanwhile, the stock market had rallied the first part of the week, largely out of relief that a dismal second-quarter earnings season has ended. Wall Street got a further lift yesterday from the comments by semiconductor makers and upgrades in the sector by Merrill Lynch. The sector was one of the first to fall last year, when the market's downturn began, so its revival could signal better times ahead.

The major stock indicators still are all below where they started 2001, despite six interest rate cuts by the Federal Reserve. The Dow is off 2 percent, the Nasdaq nearly 16 percent, while the S&P has lost more than 7 percent.