- The Washington Times - Friday, January 31, 2003

NEW YORK, Jan. 31 (UPI) — Blue chips on the New York Stock Exchange ended with triple-digit gains Friday, lifted by fresh economic data that outweighed worries about corporate earnings.

Stocks eased on the Nasdaq Stock Market as chipmakers took a hit after equipment maker Applied Materials warned orders for the just-ended quarter would miss its earlier forecast.

The blue-chip Dow Jones industrial average, which plunged 165.58 points Thursday, gained 108.68 points to close at 8,053.81. The tech-heavy Nasdaq composite index, which sank 35.71 points in the previous session, ended flat, down by 1.44 points to close at 1,320.91.

The broader New York Stock Exchange composite index added 84.24 points to close at 4,868.68, the Standard & Poor's 500 index gained 11.09 to close at 855.70, the American Stock Exchange composite index rose 11.41 points to close at 820.49 and the Wilshire 5000 Index gained 103.86 to close at 8,125.07.

Volume was 1.67 billion on the Big Board and 1.49 billion on the Nasdaq Stock Exchange.

Analysts said Big Board stocks pushed higher after a slow opening as some positive economic data outweighed investors' worries about corporate earnings. But technology stocks were lower following the downbeat projection from semiconductor-equipment maker Applied Materials.

Big Board stocks rebounded from an early dip following a stronger-than-expected report from the Chicago Purchasing Managers' Institute showing that its index of local business activity in January rose to 56.0 from 51.7 in December. Economists had expected the index to rise to 53.

Earlier, the Commerce Department said that personal income rose 0.4 percent in December, compared with a gain of 0.3 percent in November. Economists had forecast an increase of 0.2 percent.

Personal spending increased 0.9 percent for the month, while a reading for November was revised to 0.4 percent from the 0.5 percent gain originally reported. Economists had forecast an increase of 0.8 percent for December.

However, the final January reading for the University of Michigan consumer sentiment index showed a decline to 82.4 from 86.7 at the end of December. Economists had forecast the index would remain unchanged from the middle of the month. The index stood at 83.7 in mid-January, and 86.7 at the end of last month. But the index of current conditions improved slightly to 97.2 from 96.

Economists and businesses are paying close attention to consumer sentiment since spending, which drives two-thirds of U.S. economic activity, began retrenching at the end of 2002.

As the Michigan index hit a nine-year low last October, consumer spending in the final three months of last year was the lowest since 1993.

Concerns about the sluggish economy and war persist among investors. Many market watchers believe stocks will continue to struggle until the conflict with Iraq has been resolved.

On the corporate front, Applied Materials said it expects a 35 percent drop in first-quarter orders instead of a 20 percent decline as originally expected. The chip-equipment maker attributed the decline to the weak economy and geopolitical uncertainties that caused customers to defer capital expenditures.

UAL, parent of United Airlines, posted a fourth-quarter net loss of $1.47 billion, compared with a loss of $308 million in the year-earlier quarter. The company filed for court protection from its creditors in early December.

Walt Disney reported a 41 percent drop in fourth-quarter profit after the close of trading Thursday. The company's theme park unit saw some growth in comparison to the year-earlier quarter, when attendance suffered in the wake of the Sept. 11 attacks. But the movie studio lost big on "Treasure Planet," a $140 million animated movie that sold just $37 million in tickets domestically.

Meanwhile, U.S. Treasury prices gained slightly. The 10-year bond added 2/32 to 100 8/32. Its yield, which moves in the opposite direction of its price, rose to 3.97 percent from 3.96 percent late Thursday.

In Europe, stock prices eased in light pre-weekend trading in London, but rose in Frankfurt and Paris. The London International Stock Exchange's blue-chip FTSE-100 index eased 13.5 points to 3,565.2. The German DAX index rose 38.72 points to 2,732.50 and the French CAC-40 index added 23.75 points to 2,937.88.

Analysts said London stocks eased, but settled above their worst levels despite weakness in home builders and chemical issues.

German and French stocks were lifted by some bargain hunting, despite weakness in the tech sector after the orders warning from Applied Materials and continuing Iraq war worries.

In Asia, prices on the Tokyo Stock Exchange ended mixed as a late bout of short-covering lifted some high-tech stocks. The blue-chip Nikkei Stock Average, which eased 14.27 points Thursday, added 23.13 points, 0.3 percent, to 8,339.94 — as the last-minute buying managed to raise the index above its 19-year closing low of 8,303.39 set back on March 25, 1983. The gain was the Nikkei's first in six sessions.

Analysts said the lift in high-tech stocks cushioned the ongoing unwinding of cross-held shares that left even blue chips boasting strong profit growth down on the day.

Economic indicators released during the session provided little ammunition for the bulls intent on bargain hunting.

Before the market opened, the government reported that Japan's jobless rate returned to a record-high 5.5 percent in December, while both household spending and consumer prices continued to tumble.

Investors also shrugged off comments in parliament by Prime Minister Junichiro Koizumi and his economic ministers. Economy Minister Heizo Takenaka said Japan would face a "real crisis" if it delayed cleaning up public finances and banks' bad loans.

Meanwhile, prices ended at a fresh 18-month low on the Singapore Stock Exchange in a half-day session ahead of the Lunar New Year holiday. The key Straits Times Index, which dropped 6.96 points during the previous session, fell 4.45 points, or 0.3 percent, to 1,291.44.

Elsewhere in Asia, markets in Hong Kong, South Korea and Taiwan were closed for the Chinese Lunar New Year.

Trading in Hong Kong will resume next Tuesday with the blue-chip Hang Seng Index hovering at 9,258.95 after rising 18.16 points on Thursday. Trading in Korea will resume on Monday with the Korean Composite Stock Price Index at 591.86 after rising 8.51 points on Thursday.

The Taiwan Stock Exchange will remain closed until Feb. 6, after the Weighted Index rose 42.57 points to 5,015.16 during Tuesday's session.

Elsewhere around the Pacific region, prices ended lower on the Australian Stock Exchange in light trading, dragged down by weakness in media stocks. The blue-chip All Ordinaries Index, which rose 13.10 points during the previous session, fell 7.60 points, or 0.3 percent, to 2,935.40.

Analysts said the market clawed back from early losses to close slightly lower as fresh U.S. earnings jitters and the prospect of war in Iraq continued to hurt majors like media giant News Corp.

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