NEW YORK >> Cautious trading surfaced on Wall Street today as investors bid tech stocks modestly higher but sold blue chips following a government report saying the nation's economy shrank at a smaller-than-expected rate in the third quarter.
Stocks mixed after GDP
falls less than expected
By Amy Baldwin
Analysts said investors were torn between a desire to bargain hunt following big sell-offs Monday and yesterday and an inclination to sell based on the uncertain economy.
The Dow ended a choppy session down 46.84, or 0.6 percent, at 9,075.14. The Dow's drop, which rose as much as 100 points previously, came on the heels of a 422-point loss incurred Monday and yesterday.
The broader market was stronger but still ended the day mixed.
The Nasdaq composite index rose 22.79, or 1.4 percent, to 1,690.20, having lost 101 points Monday and yesterday. But the Standard & Poor's 500 index was essentially unchanged, off 0.01 at 1,059.78. The S&P lost 44 points Monday and yesterday.
Advancers outnumbered decliners slightly more than 3 to 2 on the New York Stock Exchange, with 1,925 up, 1,182 down and 212 unchanged. Volume was 1.31 billion shares vs. 1.30 billion yesterday.
The NYSE composite index fell 0.40 to 546.34, the American Stock Exchange composite index rose 0.80 to 827.69 and the Russell 2000 index, the barometer of company stocks, rose 5.34, or 1.3 percent, to 428.17.
Analysts said the slippage this week was expected given how the market quickly recovered the steep losses in the first week of trading following the Sept. 11 attacks.
At the end of last week, the Dow had recovered all but 60 points of the 1,369 it lost in the week that trading resumed. The Nasdaq and S&P were trading above their pre-attack levels. As of today, the Nasdaq was 5 points from where it stood Sept. 10; the S&P, down 33.
"We are in a correction phase," said Al Mirman, market strategist for V Finance in Sarasota, Fla.
"We had a 100 percent retracement of the decline, which is very unusual. That says we are in for a stronger market, but it also says a correction is due first."
Today's buying activity was stronger and more widespread earlier in the session, after the government said the economy shrank at a 0.4 percent rate from July through September. Analysts, worried about the economy's performance in the weeks following the attacks, had been expecting a 1.0 percent decline.
Nonetheless, the drop in gross domestic product, the nation's total output of goods and services, was the biggest since 1991 when the country was deep in the last recession, the Commerce Department reported.
Technology stocks, the market's most battered issues, were the strongest, holding their gains as other sectors waffled. Dell Computer gained 74 cents to $23.98, Broadcom jumped $1.71 to $34.41, and Intel rose 88 cents to $24.42.
"People who have been heavy sellers of tech for the past year seem to be out of the way," said Scott Bleier, chief investment strategist at Prime Charter Ltd.
Outside technology, trading was more volatile with prices widely fluctuating.
Major industries and retailers, both of which were blamed for the decline in third-quarter GDP, were mixed. Wal-Mart gained 80 cents to $51.40, but 3M fell 98 cents to $104.38. Both are Dow industrials.
Other losses came from companies whose results disappointed Wall Street. Qwest Communications slid 19 percent, down $3.05 at $12.95, after posting a pro forma loss of 8 cents a share, rather than a 3-cent-per-share profit.
The weakest Dow industrial was Eastman Kodak, down $2.23 at $25.57 amid worries it will lose market share following news of an exclusive deal for Wal-Mart to sell Polaroid 35mm film.
Overseas markets were mixed today. Japan's Nikkei stock average finished Wednesday down 1.4 percent. In Europe, Britain's FT-SE ended up 0.7 percent, France's CAC-40 climbed 2.1 percent, and Germany's DAX index gained 0.3 percent.