Stocks end mixed
on warnings

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By Hope Yen
Associated Press

NEW YORK >> A spate of mostly bad news -- ranging from an earnings warning from Honeywell to falling consumer confidence -- sent blue chips lower for a third day. Tech stocks advanced, but the market's three major indexes still posted a third straight weekly loss.

Analysts said investors remained worried about a war with Iraq as well as the strength of the economic recovery. A government report showing strong retail sales helped lessen the anxiety, but was not enough to outweigh the day's other bad news.

"It's a combination of poor earnings, some uncertainty about (terrorism) and a little more evidence that consumers don't seem to be as confident," said Robert Harrington, co-head of listed block trading at UBS Warburg.

Advancing issues outnumbered decliners 7 to 6 on the New York Stock Exchange. Volume was light. The Dow Jones industrial average fell 66.72, or 0.8 percent, to close at 8,312.69. That came after a 2.4 percent decline yesterday and a 0.3 percent dip on Wednesday, the anniversary of Sept. 11.

But the broader market finished higher. The Nasdaq composite index gained 11.72, or 0.9 percent, to 1,291.40, having fallen 2.7 percent in the previous session. The Standard & Poor's 500 index rose 2.90, or 0.3 percent, to 889.81, following a drop of 2.5 percent. The Russell 2000 index rose 3.72, or 1 percent, to 389.99.

The three major market gauges finished the week lower for a third straight week, an unenviable distinction not seen since the weeks ending June 7 to June 21. For the week, the Dow lost 1.4 percent, the Nasdaq declined 0.3 percent, and the S&P fell 0.5 percent. The Russell 2000 was down 0.4 percent for he week.

The price of the Treasury's 10-year note was up 15/32 point today, while its yield fell to 3.90 percent from 3.96 percent late yesterday. Two-year Treasury notes were up 1/16 point and yielded 2.04 percent, down from 2.09 percent yesterday.

Analysts said terrorism remained a concern for investors. In south Florida, three people in two cars were detained and a cross-state highway was shut down after a woman reported hearing the men talking about a possible attack.

Meanwhile, the University of Michigan today said consumer sentiment in September fell to 86.2 from the previous month's figure of 87.6, according to Dow Jones Newswires. Analysts were expecting a higher reading of 87.0.

But the Commerce Department reported retail sales rose 0.8 percent in August, driven largely by a big jump in auto sales. The solid showing caught analysts by surprise.

Earnings warnings dragged down stocks. Honeywell fell $4.78, or 17 percent, to $23.56 after the diversified manufacturer lowered its third-quarter outlook. The announcement pressured other manufacturing companies, including United Technologies, which declined $3.10 to $58, and General Electric, which fell 95 cents to $27.05. Lucent dropped 39 cents to $1.26 after the telecommunications company said it expects weak fourth-quarter revenue because of soft consumer spending.

But tech issues got a boost from Adobe Systems, which rose $2.32 to $20.77, after meeting lowered third-quarter earnings expectations and reporting that its finances should remain stable in the months ahead.

Overseas, Japan's Nikkei stock average finished lower 1.8 percent. In Europe, France's CAC-40 fell 2.6 percent, Britain's FTSE 100 declined 1.9 percent, and Germany's DAX index was down 1.8 percent.