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Chip Stocks Lift Nasdaq; Dow Slides

YOUR MONEY WEEKEND / MARKETS

September 08, 2000|From Times Staff and Wire Reports

Technology stocks bounced back Thursday after two days of selling, while the "old-economy" sector slid in the wake of some earnings warnings.

Meanwhile, crude oil continued its relentless rise, topping $35 a barrel as traders doubted that an expected production increase will make much difference.

On Wall Street, the Nasdaq composite index rebounded 85.01 points, or 2.1%, to 4,098.35, recovering part of its 5.2% loss Tuesday and Wednesday.

Renewed buying of semiconductor stocks helped pace Nasdaq's comeback. The stocks had been hammered early in the week as some analysts warned that personal computer sales are slowing.

But the Dow industrials, which had risen early in the week as Nasdaq fell, slid 50.77 points, or 0.5%, to 11,259.87. The Dow was hurt in part by DuPont's plunge of $4.88 to $42.13, after the chemical giant warned it will miss earnings targets this year.

Still, the broad market was mostly higher: Winners topped losers by 15 to 13 on the New York Stock Exchange and by 22 to 17 on Nasdaq. Trading was moderate.

The split performance of tech stocks and old-economy names "is a continuation of the rotation the market has become accustomed to," said Bob Streed, senior vice president at Northern Trust in Chicago. "The money seems to flow back and forth" between sectors.

The equity market again seemed to largely shrug off soaring energy prices: In New York, near-term crude oil futures jumped 49 cents to $35.39 a barrel, the highest since 1990.

Saudi Arabia, the world's top producer, promised President Clinton on Wednesday that an output rise was coming. Analysts predict OPEC will soon increase daily output by 500,000 to 800,000 barrels.

But many analysts don't believe it will be enough. "An increase of a million barrels is what they need to do to calm the markets," said Craig Gile, energy trader at Citibank.

In the bond market, yields edged up for a second day. The 10-year Treasury note ended at 5.75%, up from 5.72% on Wednesday.

Among Thursday's highlights:

* DuPont, which said rising raw materials costs and the weak euro will depress 2000 earnings, cast a shadow on many industrial names. Losers included Honeywell, down $2.63 to $38.25; 3M, down $2.50 to $91.63; Air Products & Chemicals, down $2 to $37; and Dow Chemical, down $1.88 to $25.56.

* Retail stocks were mostly lower after May Department Stores warned of weaker earnings.

Also, supermarket chain Great Atlantic & Pacific slid $1.19 to $12.81 after it warned of lower-than-expected earnings, prompting bond-rating service Standard & Poor's to downgrade the company's bonds to junk status. Among other grocery chains, Safeway fell $1.25 to $47.38 and Kroger eased 13 cents to $22.25.

* Computer chip stocks recovering some of their losses from early in the week included Intel, up $1.73 to $67.44; Micron Technology, up $3.50 to $73.50; Vitesse Semiconductor, up $10.69 to $90.44; and Cypress Semiconductor, up $3.38 to $45.50.

Other tech issues rebounding included Apple, up $3.56 to $62; Sun Microsystems, up $6.31 to $123.94; and QLogic, up $13.81 to $113.75.

Read-Rite soared $2.75 to $10.56, one day after it said it formed a company to design and make components for fiber-optic networks.

* True North Communications slumped $6.50 to $37.50 after DaimlerChrysler, the ad agency's largest client, said it may choose a single agency to handle Dodge, Chrysler and Jeep U.S. ads.

* MP3.com slid $1.69 to $6.19. A judge ruled Wednesday that the firm, which allows people to listen to songs over the Internet, violated Universal Music's copyrights.

Market Roundup: C7-8

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