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Earnings boost Wall Street
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July 25, 2000: 4:47 p.m. ET
Investors reward positive quarterly results; Dow little changed, Nasdaq up
By Staff Writer Catherine Tymkiw
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NEW YORK (CNNfn) - U.S. stocks posted solid gains Tuesday as investors sought bargains amid positive news from selected companies in the technology sector, giving the Nasdaq composite index some impetus to start erasing two straight sessions of losses.
"I think there was some bargain hunting coming in on the back of good news," said Barry Hyman, chief market strategist at Ehrenkrantz King Nussbaum.
 Techs got a boost when semiconductor maker Texas Instruments gave a positive forecast in reporting results exceeding estimates. The telecom sector was lifted by a better-than-expected earnings report from AT&T, and by Qualcomm's proposed spinoff of its circuits business.
"There are pockets of strength but it's very company-specific," said Joe Battipaglia, chief investment strategist at Gruntal & Co. "But there's less overall volatility and frantic momentum playing out on any given day."
The Nasdaq gained 48.00 points, or more than 1 percent, to 4,029.57. The Dow was little changed, advancing 14.85 to 10,699.97. The S&P 500 rose 10.18 to 1,474.74.
 Analysts expected strong corporate quarterly results to trigger a significant rally, but concerns about future revenue growth and inflation growth have caused some investors to remain skittish.
"You're fighting to a stalemate between those people worried about interest rates and high valuations and those people excited about truly good earnings," Chris Grisanti, director of research at Spears Benzak Salomon & Farrell, told CNN's Street Sweep. "I think you're going to be in a trading range for most of the summer until some event that we don't yet see takes us out of that - either the Fed stops raising (rates) or there's bad inflation news."
Market breadth was positive but light volume reflected lackluster interest on the part of investors, analysts said.
On the New York Stock Exchange, decliners nudged out advancers 1,453 to 1,387, as more than 952 million shares changed hands. On the Nasdaq, losers outpaced winners 2,144 to 1,847, as volume reached more than 1.4 billion shares.
In currency markets, the dollar fell against the euro but rose versus the yen.
Texas Instruments, AT&T lead buyers
Corporate quarterly results and individual deals continue to drive investor activity, with positive news being rewarded and anything negative being punished. But there still is some underlying concern about future revenue growth.
"There's a little nervousness about earnings growth going forward," said Peter Coolidge, senior trader with Brean Murray & Co. "There's a feeling out there that a lot of the positive (news) has already been built into the share prices and if there's any hint of slowness in the techs that's going to dramatically affect the share prices in technology."
Texas Instruments (TXN: Research, Estimates) slid 9/16 to 67-7/16 based on late trading Monday, but the stock was 4-7/8 higher than Monday's New York Stock Exchange close. The company reported a second-quarter operating profit of 31 cents per share -- beating analysts' expectations by a penny -- amid soaring demand for its semiconductor products.
 AT&T (T: Research, Estimates) advanced 9/16 to 33-7/8 after posting earnings excluding special items of 57 cents a share for the second quarter. Analysts forecast that the company would earn 53 cents. The company earned 49 cents a share in the year-earlier period.
Qualcomm (QCOM: Research, Estimates) surged 4-3/4 to 68-3/8 after the wireless technology provider said it will spin off its integrated circuits and system software units into a separate company that is expected to debut in August 2001.
In other earnings, Exxon Mobil (XOM: Research, Estimates) fell 1-7/8 to 75-3/8 after it reported second-quarter profit of $1.18 per share, easily exceeding Wall Street's consensus estimate of $1.07 a share. The results also more than doubled the 53 cents per share the company earned during the same period last year.
Higher oil prices helped boost Exxon Mobil profit, so some of the selling could be due to the recent fall in oil prices, according to analysts.
 Circuit City Stores (CC: Research, Estimates) slumped 6-1/2 to 26-1/8 after it warned that its profit margin would miss Wall Street forecasts for the second and third quarters, hurt by weak appliance sales and costs of remodeling stores. The retailer said it would stop selling appliances to focus on consumer electronic gear.
Kmart (KM: Research, Estimates) slid 3/16 to 6-7/8 after saying it would close stores and take a $740 million charge in the second quarter for a restructuring, adding that its profit would miss Wall Street forecasts for the quarter and the year.
Another major retailer on the down side was Amazon.com (AMZN: Research, Estimates), which fell 1-1/8 to 37-5/8, amid news that President and Chief Operating Officer Joseph Galli has resigned to take the helm of B2B firm VerticalNet (VERT: Research, Estimates). VerticalNet shares rose 5/8 to 57-3/8.
Economy under scrutiny
Analysts said investors will be keenly watching any economic indicators -- which might show whether or not the surging economy is truly slowing, allowing the Federal Reserve to end its year-long spree of interest rate hikes.
"What will frame investor decision-making in August is going to be totally Fed-driven," said Ehrenkrantz's Hyman. "We've gotten the anecdotal comments from Mr. Greenspan that we can achieve a slower growth landing but we now have to see that anecdotal evidence turn into fact."
But the day's economic data had little effect on stocks.
The Conference Board said its gauge of consumer confidence rose to 141.7 in July from a revised 139.2 in June. Analysts polled by Briefing.com had expected a reading of 139. Consumer spending fuels two-thirds of the U.S. economy, so readings on consumer attitudes are closely watched by economists and policy-makers.
The National Association of Realtors said sales of existing homes rose 2.8 percent to an annual rate of 5.23 million in June, above May's 5.09-million rate and the 5-million pace expected by economists. June's sales were at their highest level since August of last year, when sales ran at a pace of 5.30 million units.
Federal Reserve Chairman Alan Greenspan appeared to have little impact on the markets with his semiannual testimony before the House Banking Committee about the state of the economy. Greenspan, who gave the same prepared remarks to the Senate Banking Committee last week, told the panel that continued improvements in productivity are needed to ensure a sustained economic advance.
"I think there's some skepticism about what the Fed's action is going to be," said Bill Meehan, chief market analyst at Cantor Fitzgerald. "I think they're going to raise rates but people are calling that into question and would like to see some confirming data." 
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