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Wall St. holds its own
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November 16, 2001: 5:25 p.m. ET
U.S. stocks close a strong week with a flat day on economic, Dell concerns.
By Staff Writer Alexandra Twin
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NEW YORK (CNN/Money) - Wall Street finished another strong week with a slightly lackluster Friday, as concerns about the weak economy and quarterly results from Dell Computer competed with optimism surrounding major developments in Afghanistan.
However, analysts said that after a surge in the early part of the week, a few days of flat trade is natural and healthy, and in fact may reflect a better psychology for putting in the foundation of the elusive bottom that market commentators keep hoping for.
Mike Murphy, portfolio manager, Wachovia Securities, told CNNfn's Street Sweep that a few choppy days are not so bad, particularly if they help to build a base from which the markets can then move higher. (539K AIFF) (539K WAV)
The Dow Jones industrial average lost 5.40 Friday to 9866.99 but closed the week overall up 2.6 percent. The Nasdaq composite index slipped 1.99 to 1,898.58 on the day but saw a 3.9 percent rise on the total week. The Standard & Poor's 500 ended the day down 3.59 to 1138.65, showing a 1.6 percent rise on the week.
Since bottoming Sept. 21, the Dow industrials have jumped 20 percent while the Nasdaq is up more than 33 percent.
"We've had a good run-up, so it's fine to pull back a little. The important thing is that the market is ignoring bad or lackluster news. You don't see that when something tops, just at bottoms," said Jon Burnham, portfolio manager at Burnham Securities
Investors were given a spate of such news Friday.
In Afghanistan, military action continued as the Muslim holiday of Ramadan began. Sources told CNN that the Taliban's Mullah Omar is in talks with Pashtun leaders to surrender power.
In addition, Muhammad Atef - a top al-Qaeda lieutenant of Osama bin Laden's who is believed to have been a planner of the Sept. 11 terrorist attacks - may have been killed during air strikes, U.S. officials said. Secretary of Defense Donald Rumsfeld said at a news conference in Chicago that he has heard credible reports to that effect.
"Under normal circumstances, we'd see more investors already stepping back in, trying to anticipate the economic recovery," John Forelli, senior vice president and portfolio manager, Independence Investment, wrote in an afternoon note. "The war and the threat of terrorism change the equation."
"But I sense some growing confidence," he added. "Nobody's jumping in with both feet, but investors seem to be moving to the edge of the pool."
Asian markets closed mostly higher Friday, as did European bourses.
Treasurys were lower, with the yield on the 10-year note rising by the close to 4.91 from 4.75 percent late Thursday. The dollar fell modestly against the euro and was slightly higher against the yen.
Oil prices eased upward Friday, bouncing off two-year lows. Light sweet crude oil futures rose 41 cents to $18.37 a barrel in New York.
Market breadth was positive. On the New York Stock Exchange, winners beat losers 8-to-7 as 1.32 billion shares traded. On the Nasdaq, advancers topped decliners 4-to-3 as 1.71 billion shares traded.
Retail, computer hardware among the day's most actives
Retailers traded lower following a number of in-line or just barely better-than-expected results, while Dell Computer's results cramped the style of computer hardware makers.
Stocks in the software and networking sectors were lower as well, while select Internet, chips, handheld device makers and airlines traded up.
Dell Computer (DELL: down $1.09 to $26.60, Research, Estimates) slipped after it reported third-quarter results late Thursday of 16 cents a share, edging analysts' estimates by a penny but showing a sharp decline from the same period one year earlier. The company also said the current quarter would meet expectations.
Specialty coffee retailer Starbucks (SBUX: down $1.67 to $17.50, Research, Estimates) earned 14 cents a share in its fourth quarter, in line with estimates and stronger than the same period one year earlier. The company predicted that profit would continue growing in fiscal 2002.
Krispy Kreme Doughnuts (KKD: up $1.70 to $40.50, Research, Estimates) earned 11 cents a share in the third quarter, a penny above estimates and 4 cents better than a year earlier. The doughnut retailer also raised estimates looking forward.
Retailer Nordstrom (JWN: up $2.03 to $19.85, Research, Estimates) reported third-quarter earnings of 8 cents a diluted share, beating estimates by 4 cents and showing an improvement from the loss of 3 cents a share a year earlier.
Yahoo! (YHOO: up $0.64 to $15.47, Research, Estimates) reaffirmed its guidance for the fourth quarter and said revenue for 2002 would be $725 million to $785 million.
The House of Representatives passed an aviation security bill Friday afternoon. The bill is expected to go to the White House soon for President Bush's signature. AMR (AMR: up $1.31 to $20.06, Research, Estimates), Northwest Air (NWAC: up $0.40 to $15.65, Research, Estimates) and Delta Air Lines (DAL: up $0.72 to $27.97, Research, Estimates) were among the stocks trading higher on the news.
Handheld computer makers Palm (PALM: up $0.53 to $3.43, Research, Estimates) and Handspring (HAND: up $0.69 to $4.00, Research, Estimates) also traded higher.
Among Dow issues, UBS Warburg upgraded Eastman Kodak (EK: up $0.61 to $29.23, Research, Estimates) to "buy" from "hold," giving the stock a lift, while IBM (IBM: down $0.25 to $114.50, Research, Estimates) and Citigroup (C: down $1.29 to $48.80, Research, Estimates) were among the biggest decliners.
Economic news fails to stir interest
In the day's economic news, government reports showed mild inflation and weak industrial activity, giving investors little help.
The Labor Department said its Consumer Price Index fell 0.3 percent in October, in line with estimates. But excluding volatile energy and food costs, the core rate rose 0.2 percent, surpassing expectations.
Industrial production fell a steep 1.1 percent in October, the Federal Reserve reported. Economists surveyed by Briefing.com were looking for a 0.9 percent decline. 
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