|
Wall St. moves forward
|
 |
January 24, 2002: 5:14 p.m. ET
Nokia, Siebel news, Greenspan comments, give investors an incentive to buy.
By Staff Writer Alexandra Twin
|
NEW YORK (CNN/Money) - Wall St. powered ahead Thursday, despite closing off the day's highs, as investors took quarterly results from tech names such as Nokia and Siebel Systems, and positive comments from Federal Reserve Chairman Alan Greenspan, as signs that a profit recovery is nearing.
The tech-heavy Nasdaq composite index added 20.20 to 1,942.58. The Dow Jones industrial average rose 65.11 to 9,796.07; it had been up as much as 115 points. The Standard & Poor's 500 closed up 3.97 to 1,132.15.
"The near term out of these companies is shaky. It's the forecast for higher growth in the second half that is really bringing markets higher today," said Matt Ruane, director of listed trading at Gerard Klauer Mattison. "People are seeing a little light at the end of the tunnel."
In his prepared comments, Greenspan told the Senate Budget Committee that there are signs the economy is beginning to stabilize.
Adding to Greenspan's comments were the latest batch of quarterly reports, some of which seemed to reinforce his message.
No. 1 mobile phone maker Nokia (NOK: up $1.09 to $23.30, Research, Estimates) beat forecasts even though profit declined. The company also raised its forecast for 2002.
Software maker Siebel Systems (SEBL: up $2.09 to $36.89, Research, Estimates) had its earnings estimates raised by Credit Suisse First Boston after it beat analysts' reduced estimates on revenue that fell from the same period one year ago.
After the close of trade, fiber optic maker JDS Uniphase (JDSU: up $0.03 to $7.89, Research, Estimates) posted a fiscal second-quarter loss of two cents a share, matching estimates, but showing a sharp decline from the same period one year ago.
Treasury prices closed little changed, with the 10-year note yield at 5.03 percent Wednesday.
Asian and European markets closed higher. The dollar was slightly higher versus the yen and euro. Light crude oil futures rose 15 cents to $19.65 a barrel in New York.
Market breadth was positive. On the New York Stock Exchange, advancers beat decliners 9-to-7 as 1.42 billion shares traded. On the Nasdaq, winners beat losers 4-to-3 as 1.81 billion shares traded.
Greenspan offers cautious optimism
Greenspan's testimony underscored the message of his Jan. 11 speech in San Francisco, while clarifying some of the more pessimistic aspects of it, analysts said -- namely that he is cautiously optimistic about the economy's capacity to recover, but that there are still significant challenges ahead.
"It is clear that the U.S. economy went through a significant cyclical adjustment in 2001 that was exacerbated by the effects of the terrorist attacks on September 11," Greenspan said. "But there have been signs recently that some of the forces that have been restraining the economy over the past year are starting to diminish and that activity is beginning to firm."
Some analysts also saw the testimony as implying an end to the Federal Reserve's easing of the overnight bank lending rate.
"There was no comment on future Fed policy, but ... with no inflation risk, Mr. Greenspan can wait until recovery is secure. In the meantime, rates are on hold," Ian Shepherdson, chief U.S. economist at High Frequency Economics, wrote in a morning note.
In the day's economic news, the number of Americans filing new jobless claims fell to 376,000 last week from a revised 391,000 the previous week. Economists surveyed by Briefing.com expected 395,000 new claims last week.
Earnings front and center
A number of companies reporting better-than-expected quarterly results were among the day's most active, giving an overall strength to technology and the broader market.
Among the companies releasing results was storage software supplier EMC (EMC: up $2.27 to $16.83, Research, Estimates). It reported a narrower-than-expected loss of 3 cents a share in its fourth quarter, compared with earnings of 25 cents per share in the same period one year before.
KLA-Tencor (KLAC: up $0.08 to $51.58, Research, Estimates) was one of several chipmakers that reported results after the bell Wednesday. The company earned 25 cents a share in its fiscal second quarter, edging estimates by a penny.
Optical fiber maker Corning (GLW: up $0.15 to $8.47, Research, Estimates) reported a narrower-than-expected fourth-quarter operating loss late Thursday, despite a worse-than-expected drop in revenue.
Biotechs Amgen (AMGN: down $1.25 to $57.21, Research, Estimates) and Immunex (IMNX: down $0.61 to $28.46, Research, Estimates) both reported results late Wednesday. Amgen earned 30 cents per share, a penny worse than expected, while Immunex, which Amgen is buying, earned 8 cents a share, in line with estimates.
Dow component Eastman Kodak (EK: up $1.74 to $28.24, Research, Estimates) rose sharply after it reported a drop in fourth-quarter results from the same period one year earlier that nonetheless beat analysts' estimates. The photographic products company also warned about the first- and second-quarter results of 2002, but gave a positive forecast about the second half of the year.
In addition, 3M (MMM: up $2.00 to $109.46, Research, Estimates), DuPont (DD: up $1.77 to $43.04, Research, Estimates) and United Technologies (UTX: up $1.35 to $65.55, Research, Estimates) were other stocks giving the Dow strength.
Dow component McDonald's (MCD: down $0.93 to $26.47, Research, Estimates) traded lower after reporting modestly lower fourth-quarter results from the same period one year earlier that met analysts' expectations. The company also reiterated guidance for 2002 results.
In the latest in the Enron case, which has undermined some investor confidence, congressional hearings began. A House panel heard a former Arthur Andersen auditor take the Fifth Amendment when asked about the shredding of documents related to the case, while Andersen officials were grilled sharply about the documents.
"Markets are up today, but they should be up even higher," said Gerard Klauer Mattison's Ruane. "What's holding them back are things like Enron. Until these kinds of issues get resolved, the market is going to be stuck in a range." 
|
|
|
|
|
|
|
