Star-Bulletin news services
Dow gains, but Cisco
costs tech stocks
NEW YORK >> A dip in interest rates assuaged Wall Street yesterday, sparking a burst of buying and sending stocks moderately higher. Tech shares, however, declined on disappointing earnings from Cisco Systems.
Analysts attributed much of the advance to a surprisingly strong response to the Treasury's sale of five-year notes, which drove bond prices higher and yields lower. The Dow Jones industrial average rose as much as 98 points before giving back some of its gains.
"The concern was that we were having higher interest rates in general, which were hurting the mortgage rate and stirring fears of less consumer spending," said Brian Williamson, an equity trader at The Boston Co. Asset Management. "But the five-year auction in the Treasuries went pretty well, so people are getting a little excited."
Declining issues narrowly outnumbered advancers on the New York Stock Exchange. Consolidated volume was moderate at 1.83 billion shares, compared with 1.65 billion traded Tuesday.
The Dow closed up 25.42, or 0.3 percent, at 9,061.74, having fallen 149.72 the previous session. Earlier in the day, the blue chips fell as much as 39 points to 8,997.11; the last time they fell below 9,000 in intraday trading was July 17.
The broader market finished mixed. The Nasdaq composite index fell 20.82, or 1.2 percent, to 1,652.68. The Standard & Poor's 500 index rose 1.62, or 0.2 percent, to 967.08. The Russell 2000 index fell 3.54, or 0.8 percent, to 453.91.
The price of the Treasury's 10-year note closed up 7/8 point, while its yield fell to 4.27 percent from 4.41 percent Tuesday. Two-year Treasury notes were up 3/32 point and yielded 1.76 percent, down from 1.82 percent Tuesday.
Stocks have lurched up and down in recent weeks as investors, having sent prices surging since mid-March, wonder whether the recent rally might have come too quickly. Analysts say it will be difficult for the market to continue a significant advance in the absence of economic or profit news pointing to strong growth.
Cisco slid $1.21 to $17.65 after the networking equipment giant reported a jump in quarterly earnings that met but did not beat analysts' expectations.
Verizon rose $1 to $36.05 amid continuing under a federal mediator with the company's workers, who remained on the job without a contract.
Decliners included Weight Watchers, which fell $1 to $42.30, after the weight loss company reported second-quarter profits that beat expectations by a penny but also lowered its 2003 earnings estimate, citing sluggish growth at its North American outlets.
STOCK QUOTES/CHARTS/DATA
