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Blue chips, tech shares up
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September 30, 1999: 11:51 a.m. ET
New economic data ease inflation fears as investors hunt for bargains
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NEW YORK (CNNfn) - Wall Street remained cautiously higher in late morning trading Thursday as new data showing the U.S. economy is slowing seemed to calm fears about inflation and an interest-rate hike.
Bargain hunters shrugged off strong home sales to look for selected blue chips and technology shares after days of market losses as they waited for a promising third-quarter earnings season.
Shortly before 11:30 a.m. ET the Dow Jones industrial average was 51.29 points higher at 10,264.77. On the New York Stock Exchange, advances charged ahead of declines by 1,517 to 1,138 as 337 million shares changed hands.
The Nasdaq composite rose 16.09 points to 2,746.36 and the S&P 500 index gained 8.08 to 1,276.45.
The market appeared to find solace in news that gross domestic product, the broadest measure of the economy's growth rate, advanced only 1.6 percent in the second quarter, while analysts had expected an increase of 1.8 percent. The second-quarter GDP advance was the slowest since the second quarter of 1995.
The news sent bullish signals to stock and bond market investors, who seemed to conclude that slowing economic growth and no apparent signs of inflation will keep the Federal Reserve on hold when it meets to determine the future of interest rates next week.
But data released later in the morning overshadowed the friendly GDP report, after news reached investors that single home sales rose at a higher-than-expected rate in August.
The bond market also scored some gains on the back of the GDP report, but quickly retreated after the housing sales figures were released. The bellwether 30-year Treasury bond rose 15/32 of a point in price, for a yield of 6.09 percent.
The dollar fell against the yen for the first time this week after the Bank of Japan, three days after making a pledge to act to curtail its currency's rise, showed no signs of action. The dollar was little changed against the euro.
Focus on earnings season
In the stock market, investors focused their attention on the upcoming third-quarter reporting season, dumping shares of office product retailer OfficeMax (OMX) after the company said its latest results will fall short of expectations.
The stock tumbled 1-1/8, or nearly 16 percent, to 5-15/16.
And shares of consumer products maker Sara Lee (SLE) eased 1/16 to 23-11/16 even after the company said its fiscal first-quarter earnings would come in above forecasts. Late Wednesday, Sara Lee said it expects to earn 28 cents a share in the quarter, 2 cents above expectations.
Shares of Leap Wireless International (LWIN) gained 5/16 to 24-1/8 even after the company said problems with its business in Russia will result in about $27 million in write-offs, without specifying for which quarter.
Many parts of the market showed signs of strength. In technology, Cisco Systems (CSCO) rose 1-15/16 at 68-9/32, while Gateway Inc (GTW) jumped 13/16 to 43-3/4 and CMGI (CMGI) edged up 2-5/8 at 102-15/16.
Drug stocks also moved upward, with Eli Lilly & Co. up 3/4 at 64, Merck up 15/16 at 65-1/4, and Warner-Lambert Co (WLA) up 2-7/16 at 65-1/16. Schroder Securities started or upgraded coverage of big drug stocks at "outperform" or "outperform significantly." 
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