Dow retakes 10,000
in mixed market

The blue chips gain 36 in choppy
trading while the tech-heavy
Nasdaq continues to stumble

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By Lisa Singhania
Associated Press

NEW YORK >> Wall Street couldn't seem to make up its mind today as trading alternated between light buying, aggressive selling and aimless drifting.

Tech stocks suffered the most in choppy trading as investors struggled to find a winning strategy in a business environment that shows little signs of improving soon.

"The market is just not showing much confidence here," said Duncan Richardson, chief equity strategist at Eaton Vance. "We've got people back from summer vacation but they're not sure what to do. We're getting into earnings preannouncement season and there's some nervousness there."

The Dow Jones industrial average closed up 35.78 at 10,033.27, its first finish about 10,000 in a week.

Broader stock indicators were less successful. The Standard & Poor's 500 index was off 1.20 at 1,131.74, while the Nasdaq composite index dropped 11.77 to 1,759.01.

Decliners led advancers more than 3 to 2 on the New York Stock Exchange, with 1,877 down, 1,256 up and 213 unchanged. Volume came to 1.34 billion shares vs. 1.18 billion yesterday.

The NYSE composite index fell 1.08 to 588.47, the American Stock Exchange composite index lost 3.51 to 866.37 and the Russell 2000 index was off 4.45 at 462.27. The Treasury's 10-year note rose 1/32 to 100 - 12/32; its yield fell 1 basis point to 4.95 percent. The 30-year bond rose 5/32 to 98 - 19/32; its yield fell 1 basis points to 5.47 percent.

Hewlett-Packard and Compaq fell for a second straight session as investors again expressed their doubts about merger between the companies announced late Monday.

Hewlett-Packard fell 79 cents to $18.21, a new 52-week low, for a loss of nearly 22 percent this week. Compaq lost 67 cents to $10.41, adding up to a two-session loss of about 16 percent. The deal, originally valued at about $25 billion, is now worth about $19 billion based on today's closing prices.

Other tech stocks also weakened. Cisco Systems fell 89 cents to $14.88, part of a broader selloff in networking issues on worries of future earnings. Alcatel also dropped, sliding $1.08 to $13.62, despite reaffirming its 2001 forecast and announcing a $200 million deal for its products.

The few technology winners were bellwethers that investors felt might have a chance of not disappointing. Intel rose 65 cents to $27.50, ahead of a forecast for its chip sales and other products expected tomorrow. Microsoft was also higher, gaining $1.64 to $57.74, after its chief financial officer reiterated the company's revenue and earnings goals for fiscal 2002.

"People have returned to the market, but they don't want part in any wildness," said Larry Wachtel, market analyst at Prudential Securities. "They want stocks with predictable earnings. They don't want technology.

Indeed, investors appeared to gravitate toward pharmaceutical and consumer goods companies, some of the most traditional blue chips. Merck rose $2.40 to $67.70, while General Electric climbed 87 cents to $41.70. Investors also were modestly optimistic about Procter & Gamble, sending its stock up 36 cents to $75.88 as the household goods company said that this quarter's results should be in line with expectations.

Not all blue chips fared as well, though. Financial stocks took a hit, with J.P. Morgan Chase falling $1.48 to $38.35.

The lack of focus in the market wasn't surprising given the recent pessimistic tone of trading. Investors have been on a selling spree since August, motivated by disappointing earnings and murky prospects for when the situation will turn around.

Market watchers had hoped the market's mood would improve when investors returned from the Labor Day holiday, but so far, that has failed to happen.

Stocks initially rallied yesterday, the first session after the holiday, on some better-than-expected manufacturing data but failed to hold their gains.

Analysts said investors will need more indications that the economy and business are stabilizing before they can buy enthusiastically.

Wall Street would also like to see more of an impact from seven interest rate cuts made this year by the Federal Reserve. There is still the possibility of an eighth cut, although yesterday's better-than-expected manufacturing data might give the central bank less urgency to act.

Also today, Wall Street digested revised Labor Department figures showing worker productivity rose 2.1 percent in the second quarter.

The statistics were slower than the 2.5 percent growth rate previously reported, but were still in line with analysts' expectations.

Overseas, Japan's Nikkei stock average fell 1.6 percent. In Europe, Germany's DAX index dropped 2.9 percent, Britain's FT-SE 100 lost 1.2 percent, and France's CAC-40 slipped 2.2 percent.