- The Washington Times - Monday, April 19, 2004

NEW YORK (AP) — Wall Street was unable to shake its malaise over interest rates yesterday, closing mixed despite a rally in technology stocks and a series of upbeat earnings reports from companies, including 3M and Eli Lilly. The Nasdaq Composite Index broke a four-day losing streak.

Worries about rates preoccupied investors for a fifth straight session. While they again shrugged off solid earnings, they also looked past the Conference Board’s index of leading economic indicators, which showed a 0.3 percent rise in March, in line with Wall Street expectations. The market had hoped that the report would show that the economy was growing fast enough to create jobs, but was concerned that a better-than-expected reading might prompt the Federal Reserve to raise interest rates.

“The interest rate concerns are definitely taking a little bit of steam out of these earnings,” said Scott Wren, equity strategist for A.G. Edwards & Sons. “We’ll continue to get good earnings, and economic data shows that we’ve got some good economic activity going on here. But until we get the interest rate question settled, we’re going to continue to see a lot of caution.”

Economists don’t expect the Fed to raise rates at its next meeting May 4, but some are calling for rates to start moving higher in August.

The technology-heavy Nasdaq rose 24.69, or 1.2 percent, to 2,020.43. The tech sector was lifted in part by an upgrade of Advanced Micro Devices Inc., but some investors also were looking for bargains after tech stocks suffered sharp declines in the past week.



The Dow Jones Industrial Average closed down 14.12, or 0.1 percent, at 10,437.85. The Standard & Poor’s 500 index was up 1.21, or 0.1 percent, at 1,135.82.

Many investors were waiting to glean some hint of the Fed’s plans from Chairman Alan Greenspan, who testifies before Congress today on the banking industry and will address the Joint Economic Committee tomorrow about the economy.

Still, companies’ solid results were lending some support to an uncertain market.

Dow component 3M Co., which had raised its quarterly outlook, managed to beat the heightened expectations by 3 cents per share, and gave an improved outlook for the rest of the year, citing stronger health care and manufacturing revenues. 3M was up 3 cents at $83.76.

Eli Lilly & Co. beat analysts’ expectations by 4 cents per share for the quarter, thanks to double-digit sales growth. The antipsychotic drug Zyprexa accounted for nearly a third of the pharmaceutical company’s sales. Lilly jumped 95 cents to $73.40.

Wachovia Corp. was down 10 cents at $44.65 after exceeding earnings estimates by 4 cents per share.

Advancing issues barely outnumbered decliners on the New York Stock Exchange, where consolidated volume came to 1.50 billion shares, compared with 1.82 billion Friday.

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