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Markets & Stocks
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Bumpy ride on Wall St.
graphic November 30, 2001: 5:22 p.m. ET

Weak economic data curtail investor enthusiasm in listless trading session.
By Staff Writer Parija Bhatnagar
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    NEW YORK (CNN/Money) - U.S. stocks fluctuated to a mixed close in a see-saw trading session Friday, as techs weighed down the Nasdaq and investors remained tentative following disappointing key economic reports.

    "This was a prototypical Friday in that traders and investors weren't eager to carry any positions over the weekend and you saw fluctuations back and forth in the market. It will be tough to get a gauge on what Monday morning will look like," Marty Cunningham, head of trading with Schwab Capital markets, told CNNfn's Street Sweep.

    Economic output contracted at a sharper rate, with the nation's gross domestic product number, the broadest measure of economic health, at a revised rate of 1.1 percent in the third quarter, the government said. The rate originally was reported as a 0.4 percent contraction. It was the worst quarter for GDP since it shrank 2 percent in the first quarter of 1991.

    There also was a sign of weakness in regional manufacturing, as the National Association of Purchasing Management-Chicago's index fell to 41.1 in November, lower than expected, from 46.2 in October.

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    But market analysts said investors remained distracted by the Enron debacle, which jolted markets Wednesday, as they weighed the GDP number against more encouraging data about the corporate outlook, and slightly positive comments by Federal Reserve Chairman Alan Greenspan about improvement in fourth-quarter productivity.

    "It's too soon in the fourth quarter to make very many judgments, but despite the fact that we clearly have been shocked by the tragedy of September 11, there is no evidence at this stage from the data we have to date that there will be a decline in the fourth quarter," Greenspan said Friday, speaking before the Euro Group Forum in Washington, D.C.

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    The Dow Jones industrial average gained 22.14 to 9,851.56. The Nasdaq composite lost 2.68 to 1,930.58. In the broader market, the Standard & Poor's 500 shed 0.75 to 1,139.45.

    For the week, the Dow finished down 1.1 percent, while the Nasdaq closed 1.4 percent higher. The S&P 500 fell 0.95 percent for the week.

    In November, the Dow industrials rose 8.6 percent and the Nasdaq composite index added 14 percent. The Standard & Poor's 500 gained 7.5 percent in November.

    Market breadth was negative. On the New York Stock Exchange, decliners edged advancers as 1.3 billion shares traded. On the Nasdaq, decliners stayed ahead of losers as 1.7 billion shares changed hands.

    Asian markets finished higher Friday, while European markets were mixed at the close.

    Treasury prices were mostly higher, with the 10-year note yield dipping to 4.74 percent from 4.79 percent late Thursday. The dollar fell against the euro and yen. Light crude oil futures gained 82 cents to $19.44 a barrel in New York.

    Novellus casts a pall over techs

    Chip-equipment maker Novellus Systems (NVLS: down $3.53 to $38.07, Research, Estimates) issued a warning late Thursday that it may lose money in its first and second quarters. Robertson Stephens downgraded the company to "market perform" from "buy" and lowered 2002 estimates, citing its pricing weakness.

    Novellus' news weighed down the sector. The Philadelphia semiconductor index fell 10.65 points, or 2 percent, to 522.22.

    Among the companies hurt were Applied Materials (AMAT: down $1.71 to $39.74, Research, Estimates), KLA-Tencor (KLAC: down $2.53 to $50.23, Research, Estimates), Teradyne (TER: down $1.53 to $27.86, Research, Estimates) and Altera (ALTR: down $0.71 to $22.76, Research, Estimates).  

    The Dow's biggest winner was component Home Depot (HD: up $2.63 to $46.65, Research, Estimates), the world's largest home improvement retailer, which said it is on track to meet Wall Street expectations in the fiscal fourth quarter as well as internal growth targets through 2004. The company also said it expects better-than-expected revenue growth of 18 percent to 20 percent through 2004.

    Also lending support was General Motors (GM: up $1.11 to $49.70, Research, Estimates), gaining after Salomon Smith Barney raised the price target on the automaker to $40 from $35, as well as earnings-per-share estimates, on the assumption of higher production levels.

    The Enron (ENE: down $0.10 to $0.26, Research, Estimates) saga continued to attract Wall Street's attention, with market participants waiting for what appears to be an inevitable Chapter 11 bankruptcy filing. Shares of the energy trader have lost all but a few cents of their value since Dynegy pulled out of a proposed $9 billion merger Wednesday.

    "Enron is providing the counterforce right now. It's undermining a number of industries such as utilities, banks, insurance and energy companies," Ned Riley, chief investment strategist with State Street Global Advisors, told CNNfn's Market Call.

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    Concerns about the fallout on energy companies with exposure to Enron still plagued the sector. Energen (EGN: down $0.77 to $23.18, Research, Estimates), EOTT Energy (EOT: down $5.65 to $9.00, Research, Estimates), El Paso (EPG: down $0.16 to $44.50, Research, Estimates), Williams (WMB: down $0.28 to $26.72, Research, Estimates) and Mirant (MIR: down $0.99 to $24.41, Research, Estimates) were lower, although American Electric Power (AEP: up $0.67 to $41.25, Research, Estimates) bucked the trend.

    Brokerage firms slid after UBS Warburg reduced the earnings outlook for the fourth quarter of 2001 and all of 2002 at several securities firms, citing a slow earnings recovery in an uncertain operating environment.

    The firm said it was maintaining "hold" ratings on Goldman Sachs (GS: down $0.35 to $89.00, Research, Estimates), Lehman Brothers (LEH: down $1.27 to $66.15, Research, Estimates), Merrill Lynch (MER: up $0.60 to $50.09, Research, Estimates), and Morgan Stanley (MWD: down $0.75 to $55.50, Research, Estimates).

    Shares of Bear Stearns (BSC: down $2.30 to $57.50, Research, Estimates) suffered after it said it had $69 million in exposure to Enron.

    Capital One (COF: down $1.47 to $50.03, Research, Estimates) suffered from a Morgan Stanley downgrade on the credit card company to "neutral" from "outperform," saying weak demand, intense competition and rising default risk continue to weigh down the credit card industry.

    Networking software maker Novell (NOVL: up $0.27 to $4.26, Research, Estimates) gave an upbeat forecast, saying it was likely to break even in its traditionally slow first quarter.

    Among the key economic data scheduled to be delivered to investors next week is the U.S. unemployment report for November, expected to rise to a five-year high of 5.6 percent. The Labor Department releases monthly jobs data Friday. The economy probably lost 210,000 jobs in November, economists surveyed by Briefing.com predict, after shedding 415,000 jobs in October.

    Also on the docket is the National Association of Purchasing Management's index of manufacturing activity on Monday, which is expected to rise slightly, to 41.9 in November. A figure below 50 indicates continued contraction. graphic

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    Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.

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