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Markets & Stocks
Nasdaq shines on Wall St.
April 12, 2001: 4:34 p.m. ET

Ahead of holiday weekend, technology index posts best point gain in 2001
By Staff Writer Catherine Tymkiw
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NEW YORK (CNNfn) - The Nasdaq composite index capped off its best week this year Thursday as investors shrugged off three economic reports and went on a buying spree, betting the worst may be over.

"I think what stocks are reflecting, especially with respect to the Nasdaq, is they've incorporated the worst news," said Michael Holland, chairman of Holland & Co. The Nasdaq has risen for four straight sessions.

An almost daily influx of bad news has whipsawed the major indexes during the past month as investors struggled for signs of a turnaround. After four strong days on the tech-heavy Nasdaq, that time may finally have arrived.

graphicThe Nasdaq composite index gained 62.46, or more than 3 percent, to 1,961.41. The indicator is up 241 points, or 14 percent, for the week. From the start of the year, the Nasdaq is still down more than 20 percent.

And the Dow Jones industrial average surged 113.47, or more than 1 percent, to 10,126.94. The blue chip index is up 335 points, or 3.4 percent, for the week. From the start of the year, the Dow is down 6.1 percent.

The Standard & Poor's 500 gained 17.62 to 1,183.51 and is up 55 points, or 4.8 percent, for the week. From the start of the year, the S&P is down 10 percent.

But the ever-elusive bottoming out process is not an overnight sensation and the gains come as companies are just starting to post their results for the first three months of 2001.

"We've had four days of very positive action on the Nasdaq and it looks like we might finally hold these gains," Mary Burnes, head of Nasdaq trading with Edward Jones, told CNNfn's Street Sweep. "I think the sentiment has changed. There's more confidence in the marketplace but we still have that worry about the earnings part of the equation."

graphicRetailers weighed on the Dow Jones industrial average after reports showed a drop in retail sales, but buying in select industrial issues, such as United Technologies (UTX: up $2.53 to $75.38, Research, Estimates), offset the selling.

Select technology stocks rose, led by strength in networking equipment maker Juniper Networks (JNPR: up $7.62 to $50.38, Research, Estimates), which posted quarterly results of 25 cents a share, matching Wall Street estimates.

Volume on the two major exchanges remained light ahead of the holiday weekend. U.S. markets will be closed for Good Friday.

A slow economy is not fresh news for investors and the influx of corporate warnings also comes as little surprise. But the strength in the day's action was boosting sentiment, analysts said.

"I'm encouraged by the fact that there's some buying on the dips," said Charles Payne, head analyst with Wall Street Strategies. "I think what's happened over the past several months is we don't know how to respond to news because we really don't know what we want from news."

More stocks rose than fell. On the Nasdaq, advancers beat decliners 2,449 to 1,396 as more than 1.88 billion shares changed hands. Winners beat losers on the New York Stock Exchange 1,848 to 1,153 as more than 1.08 billion shares were traded.

In other markets, the dollar gained against the euro but faltered versus the yen. Treasury securities edged higher.

Here come the quarterly results!

As the floodgates open for corporate January-March quarter results, investors will have plenty to digest. But analysts said much of the bad news has been factored into the stock prices.

"Most of the negativity is built into these stocks," Wall Street's Payne said. "Today (Thursday) may be a proxy for how we're going to look for the next quarter -- more indecisiveness but not as much negativity."

graphicInternet media company Yahoo! (YHOO: up $1.10 to $16.96, Research, Estimates) turned in first-quarter financial results that were slightly ahead of Wall Street's expectations, and announced a range of cost-cutting measures that include laying off about 12 percent of its staff. The company also slightly lowered its financial targets for the current quarter and all of 2001.

Redback Networks (RBAK: up $1.86 to $17.70, Research, Estimates) reported losses that were smaller than expected, while the company's revenue surged 166 percent. On April 2, Redback warned its first-quarter revenue would miss estimates, anticipating a loss of 15 cents. Wall Street previously expected a profit of 5 cents a share. In addition, Redback announced it is cutting about 150 workers, or 12 percent of its work force, citing a slowdown in the global telecommunications sector.

"The stock market is earnings-oriented. But if you're looking at earnings, you're not seeing anything improving," Robert Brusca, chief economist with Ecobest Consulting, told CNNfn's Before Hours.

  graphic EARNINGS CALENDAR  
    Click below for a comprehensive look at companies posting quarterly results Thursday
  • Corporate Results
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    Analog Devices (ADI: up $3.37 to $42.37, Research, Estimates), whose semiconductors are used in cell phones, digital cameras, and other electronic devices, said its second-quarter earnings would be hurt by an order slowdown and cancellations.

    Network Appliances (NTAP: up $0.12 to $16.68, Research, Estimates), the data-storage device maker warned its fiscal fourth-quarter earnings will miss analysts' expectations.

    graphicGeneral Electric (GE: up $1.43 to $44.70, Research, Estimates) reported a 16 percent rise in first-quarter earnings, matching Wall Street forecasts. Analysts surveyed by earnings tracker First Call had forecast 30 cents a share, up from 26 cents a share a year earlier.

    Retail sales slump

    Retail sales fell in the United States last month while prices at the wholesale level edged lower, the government said Thursday. Both numbers came in below Wall Street forecasts.

    Retail sales fell 0.2 percent in March after being flat in February, the Commerce Department said. Wall Street economists had forecast a flat reading for March. The department revised its February reading from an initially reported 0.2 percent decline.

    Analysts said investors were hoping that the economy would gain some strength, since it was starting to look unlikely that the Federal Reserve would cut interest rates before its scheduled monetary policy meeting May 15.

    "The weak retail sales data undermines one of the strong points of the economy," Bryan Piskorowski, market analyst with Prudential Securities. "It makes the case that the Fed will continue to ease (interest rates), but if you look at the commentary out of (Dallas Fed President) McTeer this week, the point they're making is they're (the Fed) not going to move inter-meeting."

    Cantor Fitzgerald's chief market analyst, Bill Meehan, agreed. "I don't think there's much chance at all of an inter-meeting rate cut. Now what we need to see in order to strengthen it (the markets) to rally is better economic data."

    Stronger-than expected March sales led troubled retailer J.C. Penney

    (JCP: up $1.33 to $17.76, Research, Estimates) to say it's on course to beat or reach the high end of fiscal first-quarter earnings forecasts. But Wal-Mart Stores (WMT: down $0.53 to $49.70, Research, Estimates), in posting a modest gain for sales of stores open a year or more, advised that its fiscal first-quarter earnings may be a little below expectations because of poor weather.

      graphic RETAILERS  
        Click below for a comprehensive look at the retail sector
  • Retail Stocks
  •    
    Sears Roebuck (S: up $0.10 to $34.75, Research, Estimates)  warned Thursday that its first-quarter profit would come in at 53 cents a share versus Wall Street forecasts of 57 cents a share and the 65 cents a share earned a year earlier.

           The closely watched University of Michigan consumer sentiment report for April fell further than expected, dropping to a preliminary reading of 87.8 from 91.5 in March. Expectations were for the index to fall to 90.5.

    In the day's other data, the Producer Price Index dipped 0.1 percent last month after February's 0.1 percent increase, the Labor Department said. The March reading was lower than forecasts for a slight gain. The so-called core PPI, excluding often volatile food and energy prices, rose 0.1 percent versus forecasts for a 0.2 percent rise. Separately, new claims for jobless benefits jumped to 392,000 last week from a revised 383,000 the prior week. graphic





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    Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.