Publish date:

Friday's Market: Dow Closes Higher, but Nasdaq Slips

Compaq's optimistic forecast might have prevented a sharper tech selloff.

Updated from 4:05 p.m. EST

Blue-chips posted solid gains Friday, but tech stocks were restrained by conflicting clues on the earnings front.

The

Nasdaq ended with a loss of 4.88 points, or 0.3%, at 1937.70. The

Dow Jones Industrial Average gained 44.01 points, or 0.5%, to 9840.08, and the

S&P 500 added 1.13 points to 1133.28.

Fresh off a strong fourth quarter,

Compaq

(CPQ)

told analysts it should earn 32 cents a share in 2002 on $34 billion in sales, more than previously expected. It added that the estimate could be revised higher. The PC maker also expects to see a strong turnaround in the economy this year.

The company's announcement may have helped mitigate the selloff in tech shares that seemed likely following several pieces of discouraging news after the close Thursday. Still, Compaq itself ended down 10 cents, or 0.8%, to $11.95.

Halliburton

(HAL) - Get Report

rose on rumors that President Bush was mulling legislation to cap companies' asbestos liability. Shares of the manufacturing giant were traded up 91 cents, or 6.8%, to $14.34.

Amazon.com

(AMZN) - Get Report

, which had its debt rating upgraded, rose 3.1%.

PMC-Sierra

(PMCS)

was one of the biggest gainers on Nasdaq, adding about 10.5%.

Ericsson

(ERICY)

set a negative tone for tech shares earlier, offering a downbeat forecast for its current quarter. After posting a wider-than-expected fourth-quarter loss, the mobile-communications equipment maker said it sees a pretax loss of about 4.9 billion kronor in the first quarter, wider than the 2 billion kronor analysts were expecting. The company's shares shed 31 cents, or 6.6%, to $4.38.

JDS Uniphase

(JDSU)

deflated

some of the hopes for the networking sector by departing from Wednesday's

mildly bullish comments from optical component making rival

Corning

(GLW) - Get Report

TheStreet Recommends

. JDS said Thursday it was "uncertain that the March quarter will represent the low point in sales for the current downturn." The company's shares fell 73 cents, or 9.3%, to $7.16.

PeopleSoft

(PSFT)

defied the slowdown in technology spending in its fourth quarter, posting earnings of $57.8 million, or 18 cents a share, compared with $41 million, or 13 cents a share, excluding items, in the same quarter last year. Revenue rose to $528.2 million, up from $497.8 million. Still, the company's shares dropped in extended trading on Instinet, erasing the company's 5.4% run-up in regular trading on Thursday. PeopleSoft plans to announce a major agreement Monday with a leading global services provider. The stock shed $2.52, or 6.6%, to $35.91 Friday.

Gateway

(GTW)

dropped $1.14, or 17.9%, to $5.22 Friday. The PC maker was one of the winners in the late session Thursday after fulfilling its earlier promise to

turn a profit in the fourth quarter.

Wireless technology developer

Qualcomm

(QCOM) - Get Report

gained 5.4% to $46.05, even though the company trimmed its 2002 guidance after the close of trading Thursday. The company narrowly missed analysts'

consensus revenue estimate for the latest quarter with a top line of $693 million. Earnings before items came to 23 cents a share, matching expectations. According to generally accepted accounting principles, Qualcomm earned 17 cents.

The company forecast earnings of 19 cents to 21 cents a share for the second quarter, below expectations of 24 cents. Additionally, the company projected a decline in the number of CDMA chipsets it ships, falling from 15 million in the first quarter to 13 million in the second quarter.

Shares of

Sanmina-SCI

(SANM) - Get Report

were under pressure

after the company missed estimates and issued a profit warning, losing $1.75, or 10.2%, to $15.44.

On Thursday, the Dow and the Nasdaq closed higher as strong earnings from the likes of

Nokia

(NOK) - Get Report

and

EMC

(EMC)

, along with

positive comments on the economy from

Federal Reserve Chairman Alan Greenspan, spurred buyers to open their wallets and bet on a recovery in 2002.

Foreign markets were mixed, with London's FTSE 100 losing 0.8% to 5193 and Germany's Xetra Dax declining 0.3% to 5157. In Asia, Japan's Nikkei closed up 0.7% to 10,144, while Hong Kong's Hang Seng ticked up 0.3% to 10,773.

Treasuries were lower. Around 4 p.m. EST, the 10-year note was losing 16/32 to 99 15/32, yielding 5.07%.