- The Washington Times - Monday, October 20, 2003

NEW YORK (AP) — Wall Street had a moderate rebound yesterday as strong earnings from 3M helped mute investor disappointment over an economic forecasting gauge that suggested business activity may be slowing.

Trading was quiet, and analysts said investors were taking a wait-and-see attitude as many large companies prepared to report earnings this week.

Among them was Texas Instruments, which announced after the close that its third-quarter earnings more than doubled, beating analyst expectations.

“The market is just in a holding pattern waiting for the earnings to come out,” said Michael Murphy, head trader at Wachovia Securities in Baltimore. “It’s a crazy time. We’ve had a great year and people are a little bit hesitant. … They do not want to make mistakes.”

Some investors may be hoping to cash in profits, as many believe the third quarter’s strong earnings have pushed stocks as high as they’ll go.

“People may be feeling it’s time for a rest … to sit back and see how the market really is faring,” said Richard A. Dickson, senior market strategist at Lowry’s Research Reports in Palm Beach, Fla. “The attitude is that there’s no rush.”

The Dow Jones Industrial Average closed up 56.15, or 0.6 percent, at 9,777.94, having gained 0.5 percent last week.

The broader market also advanced. The Nasdaq composite index rose 12.78, or 0.7 percent, to close at 1,925.14, following a weekly loss of 0.2 percent. The Standard & Poor’s 500 index rose 5.36, or 0.5 percent, to 1,044.68, having risen 0.1 percent last week.

Investors were unhappy with the Conference Board’s report that its Index of Leading Economic Indicators, a key forecasting measure, declined by 0.2 percent in September to 113.0, slightly below analysts’ expectations. The dip marked the first decline in the index since March, and followed a 0.4 percent rise in August.

The market was again closely watching third-quarter earnings reports for solid evidence the economy is improving.

Dozens of companies will report earnings later this week, including several Dow components — AT&T; Corp., DuPont Co., Eastman Kodak Co., J.P. Morgan Chase & Co., McDonald’s Corp., Microsoft Corp. and Merck & Co. But nothing ominous was expected, and no big market moves were anticipated, said Brian Pears, head equity trader at Victory Capital Management in Cleveland.

“It takes time to extrapolate it, and to understand how it affects the market as a whole,” Mr. Pears said.

Before the market opened yesterday, 3M Co. said its profits were up nearly 22 percent on strong sales, increased productivity and reduced costs, beating analyst estimates by 10 cents a share. The maker of Scotch-brand tape and Post-it Notes rose $1.43, or 1.9 percent, to close at $75.48.

The company’s results were gratifying to investors who have been particularly concerned about the struggling manufacturing sector.

Lexmark International Inc. reported a 16 percent rise in third-quarter earnings, beating the computer printer company’s own estimates and Wall Street’s expectations. Lexmark soared $6.75, or 10 percent, to close at $74.00.

Southwest Airlines Co. rose 59 cents, or 3.2 percent, to $18.99, after the discount carrier’s earnings rose on strong summer travel. The company met analysts’ forecasts.

Citigroup Inc. reported profits of $4.7 billion for the third quarter, well above Wall Street expectations, but the numbers failed to impress investors. The nation’s largest financial institution declined 26 cents, to close at $48.12.

UBS analyst Glenn Schorr acknowledged that Citigroup’s profits were high, but said it was “difficult for us to be too thrilled,” when revenues were flat compared to the second quarter.

Advancing issues outnumbered decliners about 5 to 4 on the New York Stock Exchange. Consolidated volume was light, with 1.5 billion shares traded, compared to 1.68 billion shares Friday.

The Russell 2000 index, which tracks smaller company stocks, rose 1.08, or 0.2 percent, to close at 521.44.

Overseas, Japan’s Nikkei stock average finished 1.1 percent higher yesterday.

In Europe, France’s CAC-40 advanced 0.2 percent, Britain’s FTSE 100 rose 0.1 percent and Germany’s DAX index gained 1.2 percent.

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times is switching its third-party commenting system from Disqus to Spot.IM. You will need to either create an account with Spot.im or if you wish to use your Disqus account look under the Conversation for the link "Have a Disqus Account?". Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide