Stocks moved higher Monday but investors
remained wary after last week's bloody debacle triggered by profit
warnings from tech companies. They also were anxiously awaiting an
interest rate decision by the Federal Reserve.
The Dow Jones industrial average, after drifting lower in midday
trading, was up 82.08 at 9,905.49 in mid-afternoon trading. The
Standard & Poor's 500 index was up 9.20 at 1,159.73, and the Nasdaq
was up 12.36 at 1,903.27.
Investors refrained from making many commitments following a
week in which the Dow suffered its worst-ever weekly point decline
and the Nasdaq composite fell through the 2,000 level.
They also were waiting to see what the Fed's policy-making Open
Market Committee would do during a regularly scheduled meeting
Tuesday. While it was widely expected that the Fed would lower
interest rates for a third time this year, investors debated how
big the cut would be.
The most optimistic observers said the Fed might make an
unusually aggressive 0.75 percentage point cut. But many others
expected the Fed to match the 0.50 point cuts it made during
Concerns about tech earnings carried through to Monday's
trading, when an analyst's cautious comments about personal
computer sales for the rest of the year sent Intel's shares
tumbling $1.88 to $26. Microsoft, another element of the Dow 30,
fell 63 cents to $53.94.
The declines in those stocks highlighted investors' sensitivity
to profit concerns in the tech sector, which was cited as a major
factor behind last week's harrowing selloff. The Dow's 821.21-point
tumble was its worst weekly point loss ever and its worst weekly
percentage decline since October 1989.
Those declines came largely on concerns about earnings at major
tech companies, several of which issued warnings last week,
including Compaq Computer, Oracle and Computer Sciences.
But some major tech companies were bouncing back from their
losses week. Oracle, which has predicted poor demand for at least
three quarters, was up 88 cents at $14.94 and Hewlett-Packard was
up $1.46 at $29.48.
Advancing issues edged out decliners by a 4 to 3 ratio on the
New York Stock Exchange, where volume came to 682.24 million
shares, well off Friday's pace, when volume was inflated by the
expirations of futures and options contracts.
The Russell 2000 index was off 0.31 at 441.49.
Overseas, Japan's Nikkei stock average rose 2 percent during the
day on growing hopes that Japanese officials may be able to prevent
the country's financial problems from deepening, but the indicator
couldn't sustain the gains and ended the down 0.34 percent.
Germany's DAX index fell 1.02 percent, Britain's FT-SE 100 was
off 0.20 percent, and France's CAC-40 was down 1.10 percent.