An afternoon round of bargain hunting sent
stocks modestly higher Thursday in a move that temporarily stopped
the tailspin Wall Street has been in all week.
Stocks fluctuated wildly as investors, unsure of what to expect,
traded in and out of the market. At one point, the Nasdaq fell to
its lowest level in more than two years.
In afternoon trading, the Nasdaq composite index was up 20.45 at
2,289.39, after tumbling as much as 83 points earlier in the
session — hitting its lowest intraday point since Dec. 31, 1998.
Afternoon buying boosted blue chips. The Dow Jones industrial
average rose 19.67 to 10,546.25. The Standard & Poor's 500 index
rose 2.48 to 1,257.75.
Analysts said Wall Street was concerned the upbeat news might
deter the Federal Reserve Board from cutting interest rates when it
meets next month. They said investors also remain unwilling to
participate in a market where stronger company profits and stock
prices are elusive.
"I believe investor fear is beginning to develop," said Bill
Barker, an investment strategy consultant at Dain Rauscher. "We're
beginning to see people say: I want out of this market because it's
going to go a lot lower."
Tech stocks did record a few gains Thursday. Bargain hunters bid
Cisco Systems up $1.61 to $26.73.
Pessimism, though, was the theme for most traders. Brocade
Communications tumbled $1.81 to $42.88, a 4 percent loss, after
some investment firms reduced their earnings expectations on
worries about the future.
The negativity was also felt by blue chips, although to a lesser
degree.
Industrial and retailing sectors struggled, led lower by General
Motors, down 60 cents at $51.86, and Wal-Mart, off 57 cents at
$49.64. Even pharmaceuticals, which are popular with investors in
times of economic uncertainty, suffered: Merck declined $1.31 to
$77.40.
Some manufacturing stocks advanced, though, including Boeing, up
$1.68 at $61.88.
Analysts say the losses reflect investors' worries that the
economy is slowing too much and it may take more than a few months
before it turns around.
The Fed has lowered interest rates twice this year and many on
Wall Street were counting on a third cut next month. But an
economic report Thursday raised concerns that might not happen.
The New York-based Conference Board said its Index of Leading
Economic Indicators rose a greater-than-expected 0.8 percent to
109.4 last month, reversing three consecutive monthly declines.
"The index results suggest that the Fed might be advised to put
any easing on hold," said Hugh Johnson, chief investment officer
at First Albany Corp. "The market is just worrying deeply that the
Fed will not give us what we need."
The leading indicators calculation is based on the performance
of a number of economic indicators, ranging from weekly
manufacturing hours and interest rates to initial claims for
unemployment insurance.
Trading was heavy and volatile. Declining issues outnumbered
advancers nearly 2 to 1 Thursday on the New York Stock Exchange.
Volume came to 920.47 million, ahead of the 770.16 million reported
at the same point Wednesday.
The Russell 2000 index fell 4.52 to 478.99.
