Wall St. shows resilience
U.S. indexes close lower on national security fears, but still show strength.
NEW YORK (CNNmoney) - U.S. equity indexes closed the week lower Friday for the first time in a month, as stock investors backed off from a three-week rally in the face of greatly magnified national security fears.|
The targeted attacks against Afghanistan took a new turn Friday after the U.S. government revealed that special forces are on the ground, although a senior official wouldn't tell CNN the specific mission. Bioterrorism fears grew after the seventh case of anthrax was confirmed.
Tom Ridge, the nation's homeland security chief, told a press conference that the anthrax strains in Florida, New York and Washington, D.C., were indistinguishable from one another, implying that they were from the same source.
The Dow Jones industrial average rose 18.58 to 1671.30 on the day, but finished the week off 1.6 percent. The Standard & Poor's 500 index ended the day up 4.87 to 1073.48, but closed the week 1.7 percent lower. The Nasdaq closed the day up 18.58 to 1671.30, but ended the week down 1.9 percent.
For most of Friday, the major indexes traded lower, but tech and blue-chip stocks powered the market higher by the close.
"The resiliency of this market is amazing. We're really seeing the individual investor coming back and buying on the dips," Charles Payne, president of Wall Street Strategies, told CNNfn's The Money Gang.
Semiconductor and Internet stocks were down the most on the week, with computer hardware showing the most strength.
But many analysts saw the week as a testament to the market's ability to sustain.
"The market has weathered a poor earnings period and increased anthrax anxiety and has come out of it pretty well. I'm encouraged. The imminent economic stimulus package and Federal Reserve cuts are providing further encouragement," said Alan Ackerman, market strategist, Fahnestock & Co.
Asian markets finished mixed Friday, with Tokyo advancing and Hong Kong lower. Oil stocks sent European bourses lower by the close.
Treasury prices were little changed, with the 10-year note yield at 4.58 percent. The dollar gained against the euro but was flat against the yen.
Market breadth was positive. On the New York Stock Exchange, advancers edged decliners by an almost 6-to-5 as 1.26 billion shares traded. On the Nasdaq, winners topped losers by an almost 4-to-3 margin as 1.58 billion shares changed hands.
Tech results offer mixed picture
Two influential tech names released quarterly results late Thursday that, while not as good as a year earlier, were slightly better than analysts' forecasts.
Software maker Microsoft (MSFT: up $1.15 to $57.90, Research, Estimates) reported lower third-quarter earnings that beat estimates and also warned about the current quarter and full-year.
Sun Microsystems (SUNW: down $0.05 to $8.83, Research, Estimates), the top supplier of Unix servers, reported a fiscal fourth-quarter loss on revenue that fell 42 percent from a year earlier.
On Friday, No. 1 mobile phone maker Nokia (NOK: up $1.32 to $20.10, Research, Estimates) said its third-quarter profit fell 18 percent, in line with estimates. The company also lowered fourth-quarter guidance.
Communication chipmakers PMC-Sierra (PMCS: down $1.48 to $15.12, Research, Estimates) and Applied Micro Circuits (AMCC: down $0.37 to $10.24, Research, Estimates) both reported quarterly declines from the same period a year earlier.
Prudential upped the price target of business software maker PeopleSoft (PSFT: up $2.26 to $26.56, Research, Estimates) after it said its third-quarter net income rose to 15 cents a share from 8 cents a share a year earlier, beating estimates.
The New York Stock Exchange's most active issue was credit card issuer Providian Financial (PVN: down $7.25 to $5.15, Research, Estimates), which plummeted after the company lost 20 cents a share, as expected by analysts, but showed a huge loss from the year before. The company warned about 2001 and its CEO stepped down.
Coca-Cola (KO: up $2.47 to $48.59, Research, Estimates) was the Dow's biggest gainer after UBS Warburg said it added the beverage maker to its highlighted stocks list.
Before the open, the Labor Department said the Consumer Price Index rose 0.4 percent in September, topping estimates, amid rising gasoline prices. Eliminating fuel and food costs, the CPI gained only 0.2 percent, in line with forecasts.
Indexes keep the faith
The major indexes are lower overall since the September 11 terrorist attacks, but remain above their lows of the year, hit September 21. The indexes have also risen following the beginning of retaliatory attacks in Afghanistan.
The Dow is 12 percent above its 2001 low. The Nasdaq tops the year's worst levels by 17 percent.
Friday bore historical significance, as it was the 14th anniversary of the 1987 stock market crash, when the Dow fell 22.6 percent, for its worst percentage drop on record.
The Dow fell to 1,738.34 on Oct. 19, 1987, or Black Monday, causing panic on Wall Street, where it was compared with the 23 percent drop on Oct. 28 and 29, 1929, a selloff that preceded the Great Depression.
But the index went on to stage a big run, hitting 3,000 in 1991, 6,000 in 1996 and a record 11,722.98 early last year.