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Nasdaq falls, Dow gains
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March 15, 2001: 5:25 p.m. ET
Some calm returns to the markets but Friday could be another wild one
By Staff Writer Jake Ulick
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NEW YORK (CNNfn) - The Nasdaq composite index fell for a third time this week Thursday, as investors nervous about slowing profit growth unloaded shares of Oracle Corp. ahead of the software maker's quarterly earnings report.
But the Dow Jones industrial average rose, lifted by financial stocks, in a session that was much calmer than those earlier this week.
Still, worries about earnings weakness that have plagued the markets for months could accelerate Friday. Compaq Computer after the market closed said first-quarter earnings will miss Wall Street's profit estimates.
 Phil Dow, stock market strategist at Dain Rauscher Wessels, told CNNfn's Street Sweep he expects the market to do little until the period when companies warn about profits for the January-March period passes.
"We've got to get through that and it's probably several months before we get a turnaround in any sectors," Dow said.
The Dow industrials rose 57.82 points to 10,031.28, one session after falling below 10,000 for the first time in five months. It's been a wild week. After falling more than 400 points Monday, the Dow rose nearly 100 points the next day, only to lose more than 300 points Wednesday.
The Nasdaq shed 31.38 points, or more than 1.6 percent, to 1,940.71, a slide that brought the index within sight of a 27-month low.
And the S&P 500 gained 6.85 to 1,173.56 but, like the Nasdaq, remains in bear market territory.
 Market breadth was mixed. Advancing issues on the New York Stock Exchange beat declining ones 1,626 to 1,420 as 1.2 billion shares traded. But Nasdaq losers topped winners 1,980 to 1,666 as more than 1.7 billion shares changed hands.
In other markets, Treasury securities were mixed. The dollar rose against the yen and euro.
A big day Friday?
Shares of Oracle (ORCL: Research, Estimates), down 67 percent from their 52-week high, continued falling Thursday, losing $1.38 to $14.69.
The losses came ahead of Oracle's report. After the close of trading, the maker of database and applications software said it earned 10 cents a shares in its fiscal second quarter. The figures matched lowered forecasts and were above the 9 cents a share earned in the year-ago period.
Minutes earlier, Compaq Computer (CPQ: Research, Estimates) warned that first-quarter earnings will miss forecasts, and said it plans to cut about 5,000 positions, or 7 percent of its global work force.
 Compaq, which joins rivals Dell Computer, Apple Computer and Hewlett-Packard in warning about profits, rose 15 cents to $18.50 before the announcement.
Not all news from the tech sector was negative. Nokia (NOK: Research, Estimates) jumped $3.15 to $24.95 after saying it will meet analysts' profit forecasts.
But Nokia rival Ericsson (ERICY: Research, Estimates) fell 6 cents to $5.84, and another competitor, Motorola (MOT: Research, Estimates), lost 8 cents to $14.41.
The day's action come amid a tough time on Wall Street. The Nasdaq composite index is hovering near its lowest levels since late 1998 while the Dow Jones industrial average is essentially back where it was in the spring of 1999, when it first closed above 10,000.
Still, after two market plunges and one rally, stocks returned to relative stability Thursday. Overnight gains in Tokyo, where stocks are trading near 16-year lows, helped calm some of the worries about global markets. Three of Japan's banks signaled they are ready to correct some of the problems that have kept their nation's economy stagnant.
Gains in financials such as J.P. Morgan Chase (JPM: Research, Estimates), which rose $1.51 to $45.26, and American Express (AXP: Research, Estimates), which advanced $1.32 to $39.80, lifted the Dow industrials
But McDonald's limited the Dow's advance. McDonald's (MCD: Research, Estimates) fell 31 cents to $27.24, a day after issuing a profit warning. Lehman Brothers and J.P. Morgan Chase both lowered their earnings targets for the world's biggest fast-food chain Thursday.
H.J. Heinz -- the maker of Heinz Ketchup and StarKist tuna -- reported fiscal third-quarter earnings that matched Wall Street's lowered forecasts. Heinz (HNZ: Research, Estimates), which also said it will cut 1,900 jobs, rose 49 cents to $41.35.
Corporations such as Heinz have stepped up layoff announcements in recent months. The government said Thursday that 375,000 Americans filed for first-time unemployment benefits last week. Though unchanged, the number is much higher than at this time last year.
Separately, a regional survey of business conditions showed some improvement when the Philadelphia Federal Reserve's survey gained for a second month in March. But the survey still showed that manufacturing is contracting in the mid-Atlantic region, although at a lower rate than in the past.
"These data provide some hopeful signs for improvement in the area's
manufacturing activity but current conditions are still lousy," said Steven Wood, economist at FinancialOxygen.com.
In one market positive, the Federal Reserve, which cut interest rates twice in January, is expected to do so again Tuesday.
 While investors are looking for lower borrowing costs to lift corporate profits, the major stock indexes are lower now than they were before the Fed started cutting rates Jan. 3.
But Christine Callies, chief market strategist at Merrill Lynch, expects the market to respond eventually.
"It very often doesn't take off right away," Callies told CNNfn's Before Hours.
Friday brings the simultaneous expiration of stock option, stock index option and stock futures contracts. Big market swings often precede the expiration, known as triple-witching, as traders rebalance positions.
A key read on inflation at the wholesale level and consumer confidence also comes Friday.
As corporate profits have weakened with the economy, stocks have fallen sharply. The Nasdaq is down 61.5 percent from its record high reached just over a year ago.
But few analysts are ready to say the worst is over for a market that has typically gained the day after a selloff -- only to fall again later.
"A bounce like this really needs volume to gain legs and credibility," Arthur Cashin, head of NYSE floor operations for UBS PaineWebber, told CNNfn's The Money Gang. 
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