Stocks rise on
bargain-hunting

The three major indexes
post their fourth straight weekly
losses despite today's gains

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By Hope Yen
Associated Press

NEW YORK >> Buyers cautiously returned to Wall Street today, sending stocks higher on bargain-hunting following three days of big losses. But the market's three main indexes still posted a fourth straight weekly loss.

Analysts said investors were ambivalent about the strength of the economic recovery and third-quarter profits. After disappointing earnings announcements this week from Electronic Data Systems and Morgan Stanley, the market got a boost on a positive outlook from Qualcomm.

"I think what we're seeing is a tug of war between one camp looking for the economy and corporate earnings to fall significantly further from where we are, and the other camp looking for the economy to expand, albeit on a modest path," said Kevin Caron, market strategist at Ryan, Beck & Co.

Advancing issues outnumbered decliners 7 to 6 on the New York Stock Exchange. Volume was heavy.

The Dow Jones industrial average rose 43.63, or 0.6 percent, to close at 7,986.02. Yesterday, blue chips dropped 230 points to close below 8,000 for the first time since July 23.

The broader market also finished higher. The Nasdaq composite index rose 4.63, or 0.4 percent, to 1,221.08. The Standard & Poor's 500 index inched up 2.07, or 0.3 percent, to 845.39. The Russell 2000 index rose 1.74, or 0.5 percent, to 367.28.

The three major market gauges all finished the week lower for a fourth straight week, a distinction not seen since the weeks ending May 31 to June 21. For the week, the Dow lost 3.9 percent, the Nasdaq declined 5.5 percent and the S&P fell 5.0 percent. The Russell fell 5.8, marking its second weekly decline in a row.

The price of the Treasury's 10-year note was unchanged today. Its yield was 3.78 percent. Two-year Treasury note prices also were unchanged, but their yield fell to 1.91 from 1.92 percent late yesterday.

Trading was brisk because today was what is called a triple-witching session, the quarterly expiration of index futures and index and stock options. But there was little of the price volatility that often accompanies triple-witching days.

Analysts say investors remain focused on the economy and have increasingly lost confidence in the past month due to mixed economic reports, a possible war with Iraq and disappointing earnings news.

Since hitting a peak on Aug. 22, the Dow has lost more than 1,000 points, about 400 of which came in the last three sessions.

"The bottom line seems to be that U.S. stocks are stuck in a trading range and that we still don't know when the economy and corporate profits will truly start to recover in a sustainable way," said Stuart A. Schweitzer, global investment strategist for J.P. Morgan Fleming Asset Management.

Gainers included Qualcomm, which climbed $2.36 to $28.08, after the telecommunications software maker said it expected first-quarter shipments of phone chips to be significantly higher than 20 million.

Alcatel rose 16 cents to $2.61 after the telecommunications equipment maker said it would cut another 10,000 employees by the end of 2003 and warned sales would fall by 36 percent this year.

Losers included Duke Energy, which fell $1.02 to $20.40, after lowering its 2002 earnings estimates below analysts' expectations.

Overseas, Japan's Nikkei stock average finished lower 2.0 percent. In Europe, France's CAC-40 fell 1.2 percent, Britain's FTSE 100 climbed 1.2 percent, and Germany's DAX index was up 1.9 percent.