Dow Slowly Rises From Recent Dip
Blue-chip shares recovered more ground Friday, ending a week that erased nearly half of the recent 700-point slide by the Dow Jones industrial average.
Technology shares continued to struggle, however, even after a robust profit report from software giant Microsoft.
The Dow rose 44.95 to 6,703.55, bringing the week’s advance to 311.86 points.
Broader measures posted modest gains, but one of the weakest showings came from the technology-heavy Nasdaq market, which failed to rally despite a 10-percent surge by Microsoft.
The week’s fairly low volume and the limited, blue-chip focus of the market’s advance prompted many analysts to question the rebound’s resiliency.
“There are concerns about the recent rally being less than picture perfect,” said Arnold Kaufman, editor of Standard & Poor’s weekly newsletter The Outlook. “There’s still a feeling that this is a minor pullback, that people should buy on the dips.” But if recent patterns persist, he added, “it will prove the wisdom of that strategy to be faulty.”
With no major economic reports scheduled for Friday or the next few sessions, bond prices edged higher, lowering interest rates and providing some support for the stock market.
Stocks have fallen sharply over the past month amid worries that profits will suffer if the Federal Reserve raises interest rates sharply to slow the economy and keep a lid on inflationary pressures. Last month, the central bank raised one of its key lending rates for the first time in two years.
Advancing issues outnumbered decliners by an 8-to-5 margin on the New York Stock Exchange, where volume totaled 468.16 million shares as of 4 p.m., down from Thursday’s pace.
The Standard & Poor’s 500-stock list rose 4.57 to 766.34, and the NYSE’s composite index rose 1.99 to 402.64.
The Nasdaq composite index rose 5.50 to 1,222.57, and the American Stock Exchange composite index rose 0.49 to 556.01.
Microsoft, whose shares jumped $9.50 to $107.62-1/2 as the most active Nasdaq issue, smashed analyst expectations late Thursday by reporting an 85 percent improvement in profits for the first three months of the year.
But continuing the trend of the past two weeks, once again, a strong earnings report by a leading technology concern did little to bolster the sector. In Nasdaq trading, Intel fell 87-1/2 cents to $137.12-1/2, Cisco Systems fell $1.12-1/2 to $48.37-1/2, and Sun Microsystems fell 75 cents to $27.12-1/2.
“It’s not good to see these technology names fumbling,” said Rick Jandrain, chief investment officer at Banc One Investment Advisors in Columbus, Ohio.
The Dow’s biggest gainer was Philip Morris, which rose $2.37-1/2 to $44.37-1/2 amid more optimism this week’s disclosure of negotiations to settle suits against the tobacco industry will produce a settlement.
Overseas, Tokyo’s Nikkei stock average rose 1.4 percent, Frankfurt’s DAX index fell 1.1 percent, and London’s FT-SE 100 fell 0.3 percent.
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