Market Update: Blue-Chips Trade Lower as Tech Stocks Hang Onto Early Gains - TheStreet

(Updated from 11:09 a.m.)

After tossing aimlessly in early trading, the major stock market averages were mixed at midday.

Blue-chips were lately down, while tech stocks were staying green as investors digested a mix of corporate news.

Volume remained thin -- as it has all week ahead of a midquarter update from chipmaking king

Intel

(INTC) - Get Report

scheduled for today after the close of regular trading.

The

Nasdaq Composite Index was higher, despite another splash in the confessions bucket late yesterday. This one came from communications-chip maker

Broadcom

(BRCM)

.

And like the Nasdaq, Broadcom was trading higher. It recently was gaining 8.1% to $38.40, even though it warned after the close of regular trading yesterday that its second-quarter sales would fall by as much as 35% from first-quarter levels. The company also said it will take a second-quarter charge to close plants and lay off workers.

The Nasdaq was recently up almost 17 points, or 0.8%, to 2234.

The blue-chip

Dow Jones Industrial Average was also tacking on gains, but it was weighed down in part by

Philip Morris

(MO) - Get Report

. A Los Angeles court yesterday ordered the tobacco company to pay more than $3 billion in damages to a 56-year-old man with cancer. Philip Morris was slipping 5.2% to $47.40.

The Dow was down about 27 points, or 0.3%, to 11,043, while the broad market

S&P 500 was down 0.8 points, or 0.1%, to 1269.

As a group, retailers were near unchanged, despite mixed May

same-store sales numbers released this morning by a bevy of retailers. The

S&P Retail Index

was lately up 0.6%.

Good news from companies that had higher same-store sales was balanced by disappointing results from the world's largest retailer,

Wal-Mart

(WMT) - Get Report

, as well as from No. 1 apparel retailer

Gap

(GPS) - Get Report

,

Federated Department Stores

(FD)

,

Best Buy

(BBY) - Get Report

,

Kmart

(KM)

and

Ann Taylor

(ANN)

, among others. Gap was lately off 3.6% to $30.27, after it said weak same-store sales for May will likely contribute to weaker-than-expected same-store sales for the second quarter.

Some computermakers were gaining.

Compaq

(CPQ)

and

IBM

(IBM) - Get Report

were higher.

Investors were bidding up chip and other technology stocks ahead of Intel's earnings update. The company is something of a proxy for other tech stocks, and Wall Street wants to hear what it has to say about its

earnings prospects for the second quarter and the rest of the year. Over the past three quarters, Intel has warned of revenue shortfalls. Intel was up 2.6% to $30.58 in early trading. The

Philadelphia Stock Exchange Semiconductor Index

was jumping 4.1%, making it one of today's the strongest sectors on the stock market.

The Splash of the Big Fish

So far this confession season, earnings news from big corporate fish has been weighted to the downside.

Sun Microsystems

(SUNW) - Get Report

last week warned it would miss its second-quarter targets. Yesterday, PC maker

Hewlett-Packard

(HWP)

cautioned that a global slowdown in information technology could hurt its revenue. And financial powerhouse

J.P. Morgan Chase

(JPM) - Get Report

yesterday said its expects revenues for the rest of the year to be lower than first-quarter results because of poor market conditions.

But investors seem to be concentrating on the good news. Earlier this week, chipmaker

Xilinx

(XLNX) - Get Report

and telecommunications equipment provider

Lucent

(LU)

made positive affirmations about the state of their finances. Xilinx was recently gaining 3.4% to $46.75, while Lucent was off 1.3% to $8.38.

In April and part of May, investors bet that corporate earnings would begin accelerating again in the third quarter of this year, and they bid stocks up significantly. But a consensus now seems to be forming that a recovery won't happen until the fourth quarter of this year or early next year.

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