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Nasdaq, Dow See Slump End

July 10, 2001|From Times Staff and Wire Reports

Modest bargain hunting and news of a surprise bid for AT&T's cable TV business helped revive blue-chip and technology stocks Monday, pushing major indexes higher after a weeklong slump.

But the session was quiet overall as investors awaited the start of the second-quarter earnings reporting season this week.

The Dow Jones industrials closed up 46.72 points, or 0.5%, at 10,299.40, the average's first advance in a week.

The tech-dominated Nasdaq composite index added 22.55 points, or 1.1%, to 2,026.71.

Winners had a narrow edge over losers on the New York Stock Exchange and on Nasdaq.

Stocks had tumbled Friday in the wake of fresh profit warnings from such tech giants as EMC, BMC Software and Advanced Micro Devices.

But the Nasdaq index managed to hold above 2,000 on Monday despite an early sell-off.

Bargain hunters pushed EMC up 72 cents to $22.32, Qualcomm up $3.54 to $61.72, Sun Microsystems up $1.14 to $14.82 and Oracle up 70 cents to $18.91.

But Homestore.com slumped $4.28 to $31.01 after Merrill Lynch analyst Henry Blodget cut the stock to "near-term accumulate" from "near-term buy," citing valuation issues.

The magnitude of the profit warnings from key companies in recent weeks has left analysts wondering if the fallout from the depressed economy will be more severe than anticipated on the corporate bottom line.

"There's a lot of fear there could be more slowness in the economy," said Ronald J. Hill, strategist at Brown Bros. Harriman & Co.

Indeed, earnings warnings stressed the market again Monday. Hardware and software maker NCR tumbled $6.07 to $38.70 after announcing it will miss second-quarter earnings expectations by as much as 22 cents a share.

And after trading ended, fiber-optic giant Corning warned that a recovery in its business may be as much as 18 months away.

The Dow got a boost from AT&T, which surged $1.98 to $18.70 on news that Comcast made an unsolicited bid for AT&T's cable TV and high-speed Internet business.

AT&T's price was adjusted at the start of Monday's trading when its wireless unit was spun off. AT&T Wireless ended the session lower, down 59 cents at $16.56.

Meanwhile, Comcast's most actively traded shares fell $2.98 to $39.30.

Among other cable stocks, Cablevision Systems rose $2.25 to $60.70, Cox Communications gained 8 cents to $42.85, Charter Communications added 11 cents to $22.70, and Adelphia rose 29 cents to $41.31.

Despite the market's slide in recent weeks on earnings fears, some analysts say the worst of the selling may be nearing an end--if many companies, in their second-quarter reports, sound relatively upbeat about the second half of the year.

In other trading Monday, bond yields were little changed, while the dollar fell against the yen. Crude oil prices eased.

Market Roundup, C11-C12

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