Updated from 4:06 p.m. EST
Stocks snapped a three-day losing streak Tuesday amid optimism from
. Blue-chips gave back most of their gains in the final hour, however, following a cautious outlook from
rose 30 points, or 2.3%, to 1350 and the
tacked on 6.8 points, or 0.8%, to 883. Both indices surrendered some of their daytime gains, however.
Dow Jones Industrial Average
finished up 27 points, or 0.3%, at 8386, losing most of its steam late in the day after tobacco giant Philip Morris said that it could not confirm its 2003 estimates.
The tobacco giant knocked 41 points off the Dow rally. Other consumer staple stocks fell on the news, with Dow component
Procter & Gamble
ending off 84 cents $85.29.
Traders said that it doesn't take much to push stocks up or down these days. "The market continues to be volatile," said Tony Cecin, a trader at U.S. Piper Bancorp Jaffray. "There is still a lot of choppiness. It is not going to be a smooth transition to everything being rosy again."
Volume was thin at 1.3 billion shares on the
New York Stock Exchange
and the Nasdaq.
For most of the session, the equity market ignored a vote by Iraq's unelected Parliament to reject terms of a U.N. weapons inspection, apparently because the final decision falls with Saddam Hussein.
But experts said some nervousness about the geopolitical situation kicked in at the end of the day. "People were trying to square their positions overnight," said Ray Hawkins, a trader at J.P. Morgan.
Iraq's Parliament voted unanimously on Tuesday to reject U.N. resolution 1441, which says that unless inspectors are allowed in, Iraq faces "serious consequences." Analysts portrayed the vote as window dressing, designed to make an ultimate decision on weapons inspections seem harder than it is.
Stocks lost ground Monday on concerns about an imminent military engagement. The Dow gave up 178 points to 8359, while the Nasdaq dropped 40 points to 1319. The S&P fell 19 points to 876.
The market got a pop Tuesday after Cisco's CEO John Chambers said the company's order backlog was up from September at a UBS Warburg technology conference. Cisco rose 5.8% at $12.87.
Vodafone also provided some positive bias, ending higher by 14.2% at $17.64, after reporting a first-half loss that roughly halved the one it posted a year ago, and a 67% surge in revenue, mostly tied to acquisitions. The mobile networker posted solid subscriber growth and issued bullish sales and earnings guidance for next year. Still, its bottom-line loss in the latest six months was $6.7 billion.
Shares of Motorola rose 4.4% at $8.75 after the wireless phone and semiconductor maker reiterated its reduced fourth-quarter sales and earnings forecasts at the UBS Warburg conference. The news lifted the chip sector, with
Advanced Micro Devices
, closing up 7.1% at $6.37, among the biggest gainers.
gained 13% at $20.96 after it posted operating earnings that beat recently raised analyst forecasts by 3 cents a share, saying a solid product mix and marketing boosted the bottom line. The company expects to earn about 60 cents a share in the current holiday quarter, 3 cents better than analyst estimates.
Also boosting the tech sector were comments Monday night by
Chief Financial Officer Jeff Henley, who affirmed second-quarter guidance and said pricing and close rates have stabilized. "I'm increasingly encouraged," Henley said. "We're optimistic; otherwise we'd be cutting more people." Oracle ended higher 5% at $9.50.
J.P. Morgan put out a research note Tuesday saying there's a chance
third- and fourth- quarter earnings will come in better than expected. The bank cited market-share gains and strength in its server division. The analysts were less sanguine about
, where they said current margins aren't sustainable. Dell finished up 1.3% at $29.48, while H-P closed ahead 4.4% at $15.50.
shares ended higher 1.2% at $127.81 after it said it would buy the television lens business of
, lately up 20% at $2.59, for $850 million.
Overseas, London's FTSE 100 rose 1.7% to 4085 and Germany's Xetra DAX gained 2.4% to 3115. Japan's Nikkei was roughly unchanged at 8465, while Hong Kong's Hang Seng added 0.3% to 9614.
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