Indexes up after some good profit reports

Dow, Nasdaq and S&P receive slight boosts, but pessimism lingers

April 18, 2001|By BLOOMBERG NEWS

NEW YORK - U.S. stocks rose yesterday as companies including Fannie Mae, Johnson & Johnson and software maker Computer Associates International Inc. reported quarterly profits that topped forecasts.

Stocks got a boost because "companies came in with earnings that were either at or better than Wall Street expectations," said Allen Ashcroft, manager of the $295 million Ark Blue Chip Portfolio. "Portfolio managers are running to those names because they've proven that they are able to weather the downturn."

The Nasdaq composite index rose 13.65, or 0.7 percent, to 1,923.22 after falling as much as 2.1 percent and gaining as much as 1.7 percent. While the index has risen 17 percent since April 4, it remains 22 percent lower for the year and 62 percent below its March 2000 record.

The Dow Jones industrial average climbed 58.17, or 0.6 percent, to 10,216.73. The Standard & Poor's 500 index advanced 12.13, or 1 percent, to 1191.81.

The Sun-Bloomberg index of the top stocks in Maryland gained 2.85 to 201.36. Human Genome Sciences Inc. rose $3.17 to $53.77. Marriott International rose $2.75 to $41.25.

Wilshire index up

Elsewhere on the broad market, the Russell 2000 Index of smaller stocks rose 4.68 to 455.58, and the Wilshire 5000 total market index, the broadest gauge of U.S. shares, climbed 118.59, or 1.1 percent, to 10,923.80.

June futures on the S&P 500 surged 16.00 to 1,211.50 after exchanges closed.

Even after the Nasdaq's recent surge and yesterday's profit reports, some investors are betting on further declines in tech stocks.

"It's hard to believe we're going to get anything really sustainable until the numbers get better and, technology-wise, I don't see the numbers getting better" anytime soon, said Rob Leshman of Briar Partners LP, a New York hedge fund.

Profit from operations for companies in the S&P 500 dropped 8.7 percent in the quarter, according to analysts surveyed by First Call/Thomson Financial. At the start of the quarter, Wall Street predicted growth of 5.3 percent.

For all of 2001, analysts now predict a decline of 1.1 percent in operating profits of companies in the S&P 500 vs. a forecast of 8.9 percent growth at the start of the year.

Three stocks rose for every two that fell on the New York Stock Exchange, while five advanced for every four that declined on the Nasdaq stock market. About 1.1 billion shares traded on the Big Board, 9.4 percent below the three-month daily average.

Fannie Mae up $2.11

Fannie Mae rose $2.11 to $78.11. The No. 1 buyer of U.S. mortgages said first-quarter earnings rose 16 percent as lending boomed and borrowing costs fell.

Johnson & Johnson advanced $1.85 to $94.45. First-quarter profit rose to $1.06 a share, 2 cents more than expected, as sales of drugs - including anemia treatment Procrit - climbed.

Pfizer Inc., the largest drug maker, rose $1.51 to $42.41, to lead the S&P 500's gain. Merck & Co. climbed $1.75 to $80.85, and Pharmacia Corp. advanced $1.63 to $52.08.

Computer Associates rose $4.31 to $33.90. The company, which makes software to run mainframe computers, said fiscal fourth-quarter profit exceeded forecasts as it cut costs and fired workers.

NCR Corp. gained $3.88 to $43.74. The maker of automated teller machines and data-storage software said that first-quarter profit rose 83 percent after sales improved in all product lines and that it would meet its full-year targets.

Other software companies advanced. Automatic Data Processing Inc. rose 89 cents to $51.30, and Veritas Software Corp. climbed $2.91 to $57.58.

Cisco Systems Inc., the No. 1 maker of equipment to link computers, declined 55 cents to $16.65. It was the most-active stock with 176 million shares trading, the 10th-biggest one-day volume for a stock. The company will eliminate 8,500 jobs and take charges of as much as $3.7 billion this quarter to cut jobs, close offices and write down assets.

Sales of phone and network equipment are plunging as some start-up phone and Internet companies shut down and larger ones slow spending.

Intel slipped 26 cents to $26.04 in regular trading, but rose to $28.97 in after-hours trading.

Among other telecommunications-equipment makers, Lucent Technologies Inc. fell 31 cents to $7.09, and Nortel Networks Corp. declined 5 cents to $15.20.

Yahoo! Inc. fell 31 cents to $17.31. The owner of the most- used Internet search site said former Warner Bros. executive Terry Semel will replace Tim Koogle as chairman and chief executive.

Gannett Co. lost 35 cents to $62.70. During a conference call, the largest newspaper publisher said second-quarter earnings may be below a year ago because of the slowing economy.

Overseas, Japan's Nikkei stock average fell 1.4 percent. European stocks also suffered. Germany's DAX index slid 1.1 percent, Britain's FTSE 100 fell nearly 0.1 percent, and France's CAC-40 dropped 0.6 percent.

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