Google warning
surprises investors

NEW YORK » Stocks rose modestly in uninspired trading yesterday as investors looked past a mix of economic data and falling profit forecasts from from Google Inc. and Applied Materials Inc.

While Applied Materials' forecasts were understandable given high inventories in semiconductors, Google's warning that its current strong profits were unsustainable in future quarters surprised some investors.

Wall Street was cheered, however, by the U.S. Labor Department's report on first-time unemployment claims, which fell by 3,000 to 334,000 last week, the lowest level since the end of October. And while trading remained sluggish and the market's gains were minimal, investors and analysts remained bullish.

"Really, we're just not doing much today," said Scott Wren, equity strategist for A.G. Edwards & Sons. "It's fine to take a little break, but overall, the market will continue to go up, and I do think that tech CEOs and tech analysts are a little overly pessimistic. The economy will continue to grow through 2005, and so will tech earnings."

The Dow Jones industrial average gained 22.98, or 0.22 percent, to 10,572.55.

Broader stock indicators were narrowly higher. The Standard & Poor's 500 index was up 1.61, or 0.14 percent, at 1,183.55, while the Nasdaq composite index gained 4.60, or 0.22 percent, to 2,104.28. The Nasdaq closed above 2,100 for the first time since Jan. 27.

Stocks also saw pressure from the currency markets, as the U.S. dollar fell to a new low against the euro as foreign exchange traders worried about the U.S. trade and budget deficits, along with high oil prices. A barrel of crude oil closed at $46.22, down 62 cents, on the New York Mercantile Exchange.

The Conference Board said its index of leading economic indicators, which measures the potential growth of the economy, fell for the fifth straight month in October. The index dropped 0.3 percent, more than the 0.1 percent Wall Street expected.

Despite recent troubles in the tech sector, Intel Corp. was bullish yesterday about its own potential. Chief executive Craig Barrett, at a conference in New Delhi, said he expected much improved profit growth in the first half of 2005. Intel rose 48 cents to $24.80.

Tech stocks remained under pressure despite Intel's forecasts. Google tumbled $4.96 cents to $167.54 after the company said the strong growth it experienced in 2004 may not be sustainable in the year ahead due to increased competition. The company went public in August at $85 per share.