Closing Market Report

Star-Bulletin news services

Earnings nudge stocks up

By Meg Richards
Associated Press

NEW YORK >> Wall Street closed a quiet session modestly higher yesterday as companies reported generally positive earnings news, but some investors were disappointed by faltering merger talks between BellSouth and AT&T.

The market seemed to be taking a rest after the Federal Reserve's decision to leave interest rates unchanged and ahead of the government's gross domestic product report today, said Peter Cardillo, president and chief strategist of Global Partner Securities Inc. The break gives traders and investors "time to position themselves," he said.

"I think the market has gone up in a rather vivacious way the last couple of days and what we're seeing here is a bit of hesitancy on the part of investors and traders to commit money ahead of key numbers," Cardillo said. "The upside today was limited."

Advancers outnumbered decliners about 8 to 5 on the New York Stock Exchange. Consolidated volume was heavy, with 2.03 billion shares traded, although the amount was lower than the 2.21 billion shares the previous day.

The Dow Jones industrial average closed up 26.22, or 0.3 percent, at 9,774.53.

The broader stock gauges also saw slight gains. The Nasdaq composite index rose 4.30, or 0.2 percent, to close at 1,936.56. The Standard & Poor's 500 index gained 1.32, or 0.1 percent, to close at 1,048.11. The Russell 2000 index closed up 5.96, or 1.1 percent, at 531.81.

The price of the Treasury's 10-year note closed down 29/32 point, while its yield rose to 4.29 percent from 4.18 percent Tuesday. Two-year Treasury notes were down 1/8 point and yielded 1.74 percent, up from 1.67 percent Tuesday.

BellSouth Corp. closed up 67 cents, at $26, after The Wall Street Journal reported it had called off its latest round of merger discussions with AT&T Corp. Quoting anonymous sources, the newspaper said BellSouth had balked at the prospect of buying the nation's largest long-distance carrier for about $19 billion in cash and stock. AT&T lost 87 cents, or 4.4 percent, to close at $19.07.

Investors were betting on old-fashioned industrial stocks yesterday, including several defense contractors that reported solid earnings.

Northrop Grumman Corp. swung to a profit in the third quarter and raised its full-year estimates on strong sales of ships and unmanned surveillance vehicles. The results easily beat analysts' estimates, and the defense contractor closed up $2.86 at $90.36.

Halliburton Co. also got a revenue boost from government contracts, including work in Iraq, but its earnings missed analyst forecasts, partly because of a proposed asbestos settlement. The oil services company dropped 56 cents to close at $23.52.

Decliners included Johnson & Johnson, which lost $1.06 to close at $49.48, after the Food and Drug Administration warned doctors it had received reports of clotting in patients implanted with a stent made by the company.

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