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Wall St. holds its own
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December 6, 2001: 5:25 p.m. ET
U.S. stocks stabilize after run-up, look to key tech and jobless data.
By Staff Writer Alexandra Twin
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NEW YORK (CNN/Money) - Wall St. sustained most of the gains of the last two sessions Thursday, anchoring a tumultuous day at the near breakeven point ahead of monthly unemployment data and mid-quarter updates from tech leaders Intel and Sun Microsystems.
In the prior two sessions, tech buying propelled markets past key milestones, with the Dow adding 3.6 percent and the Nasdaq rising 7.5 percent.
But Thursday saw investors pulling back a little as mixed chain-store sales, economic reports and some typical stabilizing after a big run kept markets spinning their wheels.
"We've had moon shots over the last few days, so this is natural. The market is digesting a lot of the gains it has made," said Donald Selkin, chief investment strategist at Joseph Gunnar. "The important thing is there is an asset allocation shift that has followed through from yesterday, with people getting out of bonds and into stocks."
The Nasdaq composite gained 7.43 to 2,054.27, while the Dow Jones industrial average lost 15.15 to 10,099.14.
The Standard & Poor's 500 eased 3.25 to 1,167.10.
Treasury prices closed lower, with the 10-year note yield rising to 5.01 percent from 4.93 percent late Wednesday.
"It's really encouraging that we didn't sell off today," Marty Cunningham, head of trading at Charles Schwab, told CNNfn's Street Sweep. "After a run-up there will be healthy selloffs, but they will followed by a building up on good foundations."
After the bell, No. 1 chipmaker Intel (INTC: down $0.45 to $34.16, Research, Estimates) and its main rival, Advanced Micro Devices, both issued positive mid-quarter statements.
Intel said fourth-quarter sales should exceed previous estimates, thanks to stronger-than-expected sales of its microprocessors. Advanced Micro Devices also saw higher sales in the quarter, due to the recent launch of a PC processor.
The semiconductor industry has been one of the hardest hit technology sectors over the past 18 months. Analysts say that a turn in the sector could spearhead a turn in the broader tech market.
Also benefiting the techs was a mid-quarter update, after the close of trade, from Sun Microsystems (SUNW: down $0.42 to $14.15, Research, Estimates), the largest maker of Unix servers that power corporate networks and Web sites. The company said that order rates are improving slightly and that the company is on track with its internal expectations for the second quarter.
Asian markets ended higher, while European bourses hit 14-week highs by the close, led by financial stocks.
The dollar gained versus the yen and lost ground against the euro. Light crude oil futures fell 95 cents to $18.54 a barrel in New York.
Market breadth tended to be positive. On the New York Stock Exchange, advancers just edged decliners as 1.45 billion shares traded. On the Nasdaq, winners topped losers 4-to-3 as 2.16 billion shares changed hands.
Mixed geo-political data
The government economic and political reports released Thursday gave a mixed picture.
In Afghanistan, the Taliban have reportedly agreed to surrender their last stronghold, the city of Kandahar, to U.S.-backed opposition forces. On Wednesday, three U.S. Army Special Forces soldiers and five members of opposition forces were killed by an errant U.S. bomb near Kandahar.
In the U.S., the Commerce Department said October factory orders rose 7.1 percent, edging estimates of economists surveyed by Briefing.com, who were looking for a rise of 6.7 percent. Orders fell 6.2 percent in September.
The Labor Department said weekly initial jobless claims fell to 475,000 from a revised 493,000 the week before. Economists surveyed by Briefing.com were expecting a drop to 460,000.
But Labor also revised third-quarter productivity down to a 1.5 percent increase from the 2.7 percent originally reported.
In addition, the Labor Department reports November employment data before trading begins Friday. Economists surveyed by Briefing.com expect the unemployment rate to rise to 5.6 percent from 5.4 percent in October.
Tech toss-up
Techs were mixed in early trade, with chips, telecoms and computer hardware easing and networking, Internet and biotech on the rise.
UBS Warburg raised its fourth-quarter 2002 and full-year 2003 estimates on No. 1 personal computer maker Dell Computer (DELL: down $0.26 to $29.41, Research, Estimates), saying consumer demand is recovering and could potentially surprise investors.
Business technology maker i2 Technologies (ITWO: up $0.16 to $6.90, Research, Estimates) rose on speculation that it may have won a large contract from Sony (SNE: up $0.16 to $49.86, Research, Estimates).
Chipmaker National Semiconductor (NSM: up $1.98 to $34.60, Research, Estimates) reported a second-quarter loss of 26 cents a share, narrower than expected, and said sales were up 8 percent from the first quarter. But looking ahead, the company expects a wider third-quarter loss than is currently forecast.
Cisco Systems (CSCO: up $0.25 to $21.79, Research, Estimates) kept chugging, building on the momentum of its recent mid-quarter update and some positive brokerage comments. The stock is up nearly 6 percent on the week.
In a prominent deal, biotechnology company Millennium Pharmaceuticals (MLNM: down $5.89 to $29.56, Research, Estimates) agreed to buy COR Therapeutics (CORR: up $8.46 to $28.20, Research, Estimates) in a stock swap valued at $2 billion.
Vivendi Universal's (VU: Research, Estimates) executive vice chairman, Edgar Bronfman Jr., will step down.
Retailers also were extremely active after a number of companies reported their November sales. Results were mixed, with some discount chains holding up and specialty stores pulling back. Dow component Wal-Mart Stores (WMT: down $0.95 to $55.62, Research, Estimates) saw same-store sales rise 4.5 percent, while apparel merchant Gap's (GPS: up $0.62 to $14.20, Research, Estimates) same-store sales fell 25 percent.
Financial stocks were among the day's strongest performers, including J.P. Morgan Chase (JPM: up $1.36 to $40.38, Research, Estimates) and Citigroup (C: up $0.60 to $49.60, Research, Estimates).
The trend may be a reflection of the overall strength of the Nasdaq, some analysts said, citing the connection between brokerage firms and the index.
"As the Nasdaq goes higher, market-making business goes higher, implying that the fundamentals of Nasdaq companies are doing better," Ken Worthington, analyst at CIBC World Markets, told CNNfn. 
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