- The Washington Times - Wednesday, May 8, 2002

NEW YORK (AP) Choosy bargain-hunters surfaced yesterday on Wall Street, bidding blue chips higher after an extended sell-off that had sent stocks to their lowest levels in months. But investors sold off technology stocks for the fifth straight day.
The market ended mixed, pulling back from a universal upturn fueled by stronger than expected worker-productivity numbers. Wall Street retreated after the Federal Reserve announced that it was leaving interest rates unchanged.
"This was pretty much as expected, and so the market certainly did not sizzle. The real issue at the moment seems to be just how long it will take until the economic recovery gets under gear. Until then, it seems the Fed at least is not going to raise rates until August or September," said Alan Ackerman, executive vice president of Fahnestock & Co.
The Dow Jones Industrial Average closed up 28.51, or 0.3 percent, at 9,836.55, giving up an earlier gain of 110.92. The Dow on Monday tumbled 198.59 to its lowest close in nearly three months.
But the broader market gave up its advance and finished lower. The Nasdaq Composite Index fell 4.66, or 0.3 percent, to 1,573.82, after rising as much as 16.09.
The Nasdaq has fallen for five straight sessions, sliding 159.66 and trading at levels not seen since early October. Yesterday marked the Nasdaq's 13th losing session out of the last 15.
The Standard & Poor's 500 index declined 3.18, or 0.3 percent, to 1,049.49, having gained six points earlier. The S&P; lost 20.76 on Monday.
The Fed, which lowered rates 11 times last year to stimulate growth, said the economy had been receiving "considerable upward impetus" from slower inventory liquidation by businesses. It's still uncertain how much demand from consumers and companies is strengthening.
Analysts attributed the bulk of the market's advance, though it turned out to be meager and limited, to a positive economic report from the Labor Department, which said worker productivity rose at an annual rate of 8.6 percent in the first quarter. Analysts were expecting a 7 percent gain.
"The major event of the day were the productivity figures, which were very positive," said John C. Forelli, portfolio manager for Independence Investment LLC in Boston.
The technology sector stumbled, showing its vulnerability to investors' growing fears that it might not experience a business turnaround until late this year at the earliest.
Dell Computer fell $1.42 to $22.33, while PMC-Sierra declined 46 cents to $12.99.
But Cisco Systems advanced 19 cents to $13.08 in advance of its fiscal third-quarter earnings. After the market closed, the network-equipment maker called the quarter "a home run," and said it earned 11 cents a share, excluding one-time items. That was two cents higher than Wall Street's expectations. Cisco rose 93 cents in the extended-hours trading session.
Dow industrial Hewlett-Packard gained 19 cents to $18.41 after Morgan Stanley raised its rating on the printer maker's stock to "over-weight" from "equal-weight."
Blue chips managed widespread gains, thanks to their reputation for being havens in bearish markets.


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