Stocks turned in a mixed session Thursday, as a late-afternoon selloff paced by weakening semiconductors pushed the
Nasdaq Composite Index into negative territory.
The Nasdaq, which had spent the better part of the session on the up-and-up, finished down by 25 points, or 1.2%, to 2034.8. The
Dow Jones Industrial Average closed up by 67.2 points, or 0.6%, to 10,692.3, falling back from triple-digit highs earlier in the session.
The Comp began retreating from session highs at around 1:30 p.m., and it fell below the flatline about an hour later. At a gathering with analysts this afternoon, semiconductor bellwether
reiterated its recently stated outlook for the remainder of the year on capital spending and industry growth. The stock finished off 1.3% at $28.64.
Other semiconductor outfits -- especially communications chipmakers -- were hit harder:
shed 9.9% to $35.22,
Applied Micro Circuits
declined 9.5% to $22 and
eased 5.9% to $43.41. Rival
Advanced Micro Devices
, meanwhile, climbed 2.3% to $27.51. The afternoon decline pushed the
Philadelphia Semiconductor Index
, or SOX, down 3.6% to 611.7.
Elsewhere, stocks held up pretty well despite a mixed bag of earnings news. "The market just wants to be able to look beyond the slowdown," said Bryan Piskorowski, market analyst at
. "As psychology is slowly turning around, investors are less willing to sell the rally."
Looking at the sectors driving today's action, semiconductor, Internet, networking, and computer hardware stocks saw the most damage, while drug, broker/dealer, utility, and cyclical issues saw some decent upside.
Federal Reserve's second intermeeting cut this year, a surprise move last week, traders have been encouraged by market activity. They even think the pullback earlier this week was healthy. And they're more pleased about the past two days' gains. Since the central bank's latest move, the Dow is up 4.7% and the Nasdaq is higher by 6%.
"Fundamentally, people are in a buying mood," said Matt Johnson, head of Nasdaq trading at
This morning they were encouraged by
earnings results; their rationale is that stocks are at attractive levels."
Behind this morning's gains was telco giant WorldCom's first-quarter earnings report. The company reported numbers that were in line with Wall Street's estimates of 25 cents per share, but that still was down 49% from the year-ago period. Because the company reiterated its revenue and earnings targets for 2001 and said it continues to make progress creating a tracking stock for its long-distance business, investors bid the stock up 1.8% to $19.74.
This morning's positive news, however, was countered by negative earnings news from wireless heavyweight
and B2B player
just shy of revenue targets in its second quarter and, like countless companies before it, the wireless concern lowered its forecasts for coming quarters. The company's news revived investor concerns about soggy corporate profits and raised doubts about a second-quarter tech turnaround. The stock shed 7.8% to $58.05.
And after preannouncing on the day of its scheduled earnings release Wednesday and then postponing its results and a conference call until this morning,
badly missed the consensus estimate. The company posted a loss of 2 cents per share, compared with analysts' expectations for a profit, on revenue of $29.8 million. It fell 26% to $3.
initial jobless claims report, a weekly gauge of labor market conditions, may have helped today's rally on the Dow. It showed the highest number in five years for workers seeking first-time unemployment benefits. In an environment where bad economic news can still be interpreted positively by the stock market, the report raised investor optimism the Fed will again cut interest rates -- as widely expected -- when it meets on May 15.
For the week ended April 21, jobless claims rose to 408,000, well above the consensus expectations of 387,000 and the previous week's 385,000. That puts the four-week average at 394,500, its highest since Oct. 10, 1992, when it totaled 428,000. The unemployment rate remains near historic lows, but it has been creeping higher over the past few months.
Market Internals (4 p.m. EDT)
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Telecoms dragged on British stocks again this morning after
appointed a new chairman with little experience in the telecommunications sector and left an unpopular CEO in place. The European Central Bank left interest rates unchanged. Still, stocks were trading higher in Britain and France, while Frankfurt's key market index had turned into the red. It was earlier flat
closed up 40.8 to 5868 and the Paris
finished ahead 74 to 5482. Despite a bomb threat at the Frankfurt exchange, and ensuing evacuation of the building, trading continued via electronic exchanges. The Frankfurt
closed off 8.5 to 6124. Some 80% of trading in Frankfurt typically takes place electronically.
The euro was lately trading at $0.9012.
Asian markets rallied overnight. Japanese investors bought stocks with a fury after the reformist candidate won the race for prime minister. Japanese investors are hoping he will be able to lead the economy to recovery. Tokyo's
rose 145.5 to 13,973.0. Stocks in Hong Kong also moved higher, and the key
jumped 43.6 to 13,293.1.
The dollar was trading at 122.4 yen.
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