Intel beats forecasts;
Dow ends 6-day slide

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By Amy Baldwin
Associated Press

Buyers returned to Wall Street today, lured by cheaper stock prices after six straight losing sessions but still anxious about impending earnings reports.

With earnings reports imminent -- including Intel's, scheduled after the close of trading -- investors were wary of taking many chances. Stocks gave up solid, early gains and fluctuated sharply during the afternoon. Intel later beat analysts' earnings forecasts by 4 cents a share, citing holiday buying that lifted personal-computer demand.

"Everyone is a little cautious here. They don't need any surprises," said Larry Rice, chief investment officer at Josephthal & Co.

The Dow Jones industrial average closed up 32.73 to 9,924.15 after swinging between a 94-point gain and 26-point loss.

The Dow also ended a six-session losing stretch during which it dropped 368.32, or 3.6 percent. The blue chips hadn't seen such a string since they fell for three sessions before the Sept. 11 terror attacks, and then another five afterward.

The broader market also finished higher after a day of wide fluctuations. The Nasdaq composite index rose 10.17 to 2,000.91. The Standard & Poor's 500 index advanced 7.78 to 1,146.19.

Advancers outnumbered decliners about 4 to 3 on the New York Stock Exchange, with 1,865 up, 1,278 down and 208 unchanged. Volume was 1.37 billion shares.

The NYSE composite index rose 3.59 to 582.63, the American Stock Exchange composite index gained 5.73 to 835.52 and the Russell 2000 index rose 1.99 to 485.00.

The Treasury's 2-year note was unchanged at 100 2932; its yield stayed at 2.77 percent. The 10-year note gained 14 to 101 632; its yield fell 3 basis points to 4.84 percent. The 30-year bond rose 2032 to 100 1832; its yield fell 4 basis points to 5.34 percent.

Analysts have predicted choppy trading for the remainder of the month, saying individual earnings reports could have greater power to move the market in either direction.

"As the market tries to digest each report, there is going to be some volatility," said Brian Belski, fundamental market strategist for US Bancorp Piper Jaffray.

The market is also vulnerable to profit-taking as investors evaluate how far stock prices have risen since the lows following the Sept. 11 terror attacks. As of yesterday, the Dow was 20 percent above its Sept. 21 low of 8,235.81. The Nasdaq was nearly 40 percent above its low; the S&P 500, up almost 18 percent.

"Even though the market has come down recently, it's still on the overvalued side. ... That's what the investor has to digest," Rice said.

The technology sector was mixed ahead of Intel's results. Intel fell 16 cents to $34.68, while competitor Advanced Micro Devices declined 52 cents to $19.09. But Microsoft rose $1.08 to $69.55, and IBM gained 85 cents to $118.90.

After the market closed, Intel said fourth-quarter net income fell 77 percent to $504 million, or 7 cents a share, from $2.19 billion, or 32 cents, a year ago. Sales dropped 20 percent to $6.98 billion from $8.7 billion. The company said profit would have been 15 cents a share, excluding acquisition costs. The average analyst estimate was 15 cents. Intel also said capital spending for 2002 is expected to be about $5.5 billion, down from $7.3 billion last year. The reduction in capex spending send Intel and several other technology stocks down in after-hours trading.

Elsewhere, financial issues were strong after Wells Fargo posted a 5 percent increase in fourth-quarter profits due to a mortgage refinancing boom that offset sluggish loan demand among its business customers. Well Fargo soared $2.30 to $45.32, while Citigroup climbed 84 cents to $49.72, and J.P. Morgan Chase advanced 56 cents to $37.87.

Retailers were mixed following a report from the Commerce Department that retail sales experienced a smaller-than-expected decline of 0.1 percent in December. Wal-Mart, which had healthier holiday sales than most retailers, rose $1.11 to $56.87.

Gap fell 98 cents to $14.57, and Kmart sank 39 cents to $2.45. Moody's Investors Service reduced its credit ratings for Gap yesterday and for Kmart today.

In other earnings after the close, Juniper Networks, the second-largest maker of equipment to direct Internet traffic, posted a fourth-quarter loss of $5.13 million on stock compensation and acquisition costs as customers reduced spending on its gear. The loss was 2 cents a share, compared with net income of $62.2 million, or 18 cents, a year earlier. Revenue dropped 49 percent to $151 million from $295.4 million.

Excluding expenses for acquisitions and stock compensation, profit would have been $15.9 million, or 5 cents a share, compared with $84.6 million, or 24 cents, a year earlier. That matched analysts' estimates.

Also, eBay Inc., the biggest Internet auctioneer, saw fourth-quarter profits rise 9 percent and revenue jump 64 percent.

Earnings before stock-based pay and noncash items were 14 cents a share, beating the 13 cents estimate from analysts.