3M’s upbeat earnings
outlook lifts Dow

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By Amy Baldwin
Associated Press

NEW YORK >> An upbeat outlook from 3M and lower stock prices brought tentative buyers to Wall Street today and gave blue chips a moderate boost. But investors again traded cautiously in the tech sector, sending shares down on a rumor of a profit warning from IBM.

Besides 3M's good news, much of the market's buying was due to prices made more attractive by two weeks of selling on worries about first-quarter earnings, which companies are releasing this month, and the unrest in the Middle East. Tech stocks were also struggling due to expectations that the sector will take the longest time to recover.

The Dow closed up 36.47 at 10,271.64, marking the index's second straight winning day following a four-session, 228-point losing streak.

The market's broader indexes were lower. The tech-heavy Nasdaq composite index fell 19.72 to 1,770.03, and the Standard & Poor's 500 index declined 3.61 to 1,122.73.

Advancing issues outnumbered decliners slightly more than 3 to 2 on the New York Stock Exchange, with 1,870 up, 1,260 down and 204 unchanged. Volume was 1.10 billion shares.

The NYSE composite index slipped 0.25 to 590.76, the American Stock Exchange composite index fell 5.00 to 898.61 and the Russell 2000 index, which tracks the performance of smaller company stocks, lost 0.61 to 497.76.

The Treasury's 2-year note rose 18 to 100 932; its yield fell 7 basis points to 3.47 percent. The 10-year note gained 1332 to 97 1/2; its yield fell 5 basis points to 5.20 percent. The 30-year bond rose 2 1/32 to 95 3032; its yield fell 5 basis points to 5.66 percent. Prices and yields move in opposite directions.

Prudential Securities analyst Larry Wachtel said he didn't believe the IBM rumor. However, IBM's decline illustrates investors jitters over the health of corporate earnings.

Investors' nervousness increased this week as tensions rose in the Mideast, sparking fears of higher oil prices that would threaten the economic recovery. Wachtel suspected Mideast worries were the biggest factor in today's session, during which volume was light and the stocks' upside was limited.

"Basically, it is a defensive day ahead of a weekend when anything can happen in the Middle East," Wachtel said.

The Dow's biggest gainer was 3M, which soared $7.81 to $121.93 after saying its first-quarter profit will be $1.20 a share, 9 cents higher than analysts' expectations. The company, which makes such products as Scotch tape, cited cost-cutting measures and job cuts. Additionally, Salomon Smith Barney and Credit Suisse First Boston each raised their ratings on the Dow industrial.

Aluminum maker Alcoa, also a Dow stock, advanced $1.12 to $38 after reporting first-quarter earnings that met Wall Street's expectations.

The beleaguered technology sector, pegged by analysts to be the last to eventually emerge from recession, declined. IBM, the weakest Dow industrial today, fell $3.59 to $97.25 on talk in the market that the company will issue an earnings warning.

This afternoon, Salomon Smith Barney downgraded shares of IBM on a technical basis due to shares slipping below the $100 level. It was a difficult week for IBM. On Tuesday, Goldman Sachs lowered its first-quarter revenue estimate on the hardware maker.

Other tech losers included Microsoft, down 58 cents at $55.87, and Intel, which declined 54 cents to $30.05.

Analysts doubt the market will make much -- or any -- upward progress until after companies have released their first-quarter results.

"People are going to remain cautious for a while," said Brian Belski, fundamental market analysts for US Bancorp Piper Jaffray. "The proof is in the pudding, and investors have to see earnings for proof that companies are turning a profit and are improving."

A mildly disappointing jobless report had little effect on the session. The Labor Department said today unemployment rose to 5.7 percent in March, an increase of 0.2 percentage points from the previous month. Economists anticipated a rise to at least 5.6 percent.

Overseas, Japan's Nikkei stock average closed today down 0.4 percent. In Europe, Germany's DAX index inched up 0.1 percent, France's CAC-40 declined 0.5 percent, and Britain's FT-SE 100 rose 0.5 percent.