- The Washington Times - Thursday, October 25, 2001

NEW YORK (AP) A rally in tech stocks lifted the overall market yesterday as investors looked past another round of lukewarm earnings reports and decided to focus on hope for an economic recovery next year.
But analysts were still conservative, noting that various industry sectors have been trading quickly in and out of favor on Wall Street. They also said the market is vulnerable to the continuing political and economic uncertainty as a result of the Sept. 11 terrorist attacks and this month's spread of anthrax cases.
"It's just rotation into tech today. … It's one of these markets where you have to be very nimble and be constantly looking over your shoulder," said Gary Kaltbaum, market technician for Investors' Edge Partners.
Gains in the Dow Jones Industrial Average's high-tech components offset the effects of disappointing earnings from Eastman Kodak. The Dow closed up 5.54 at 9,345.62, after sporadically dipping lower throughout the session.
The broader market was also higher. The tech-dominated Nasdaq Composite Index rose 27.09 to 1,731.53, and the Standard & Poor's 500 Index advanced 0.37 to 1,085.15.
Investors were careful in their dealings, which was apparent in fluctuating stock prices and that more stocks traded lower than higher. The cautious mood on Wall Street duplicated Tuesday's sentiment when uneasy investors took profits from the market's surge on Monday.
Monday's rally, in which the Dow rose 172, aside, the market has had mostly modest gains and losses since companies began reporting third-quarter earnings last week.
Analysts said the cautious trading was understandable given how well Wall Street has recovered from the massive sell-off in the first week of trading after the terror attacks. The stock market has regained $1.1 trillion of the $1.2 trillion lost in that first week.
The Dow has recouped about 80 percent of the 1,369 points it lost that week. The Nasdaq is 32 points above its pre-attack level; the S&P; 500 is 7 points below its Sept. 10 level.
"I'd give the market an 'R' for resiliency," said Bryan Piskorowski, market commentator for Prudential Securities.
Still, analysts said that because the economy is still weak and many companies cannot predict better results for the fourth quarter or next year, stocks can't move much higher.
"The market is stuck in a 'What now?' mentality," Mr. Piskorowski said.
Investors again bid up companies that exceed analysts' expectations or offer the promise of better business and punished those that fall short or warn of poor results ahead.
On the upside, Microsoft, a Dow stock, rose 89 cents to $61.32. The software maker is due to release today its Windows XP, the new version of its personal computer operating system and which analysts say is crucial to the company's future profitability.
The Dow's biggest gain came from IBM, which rose $2.76 to $108.57.

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