Stocks end higher

Oct. 24, 2001 at 6:00 PM
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NEW YORK, Oct. 24 (UPI) -- Stock prices on the New York Stock Exchange and the Nasdaq Stock Market closed higher Wednesday after meandering in a tight range as investors digested another batch of corporate results amid continuing concerns about anthrax and the war on terrorism.

The blue-chip Dow Jones industrial average, which lost 36.95 points Tuesday, edged up 5.54 points or 0.06 percent to 9,345.62. The tech-heavy Nasdaq composite index, which eased 3.64 points in the previous session, bounced back 27.10 points or 1.5 percent to 1,731.54.

The broader New York Stock Exchange composite index rose 1.55 to 557.08 while the Standard & Poor's 500 index inched up 0.42 to 1,085.20.

The American Stock Exchange composite index rose 2.23 points to 823.57 while the Wilshire 5000 Index gained 5.83 to 10,001.07 and the Wilshire Smallcap Index rose 1.14 to 649.33.

Big Board volume totaled 1.552 billion shares with decliners topping advancers by 17 to 13. Nasdaq volume reached 1.886 billion shares.

Analysts said blue-chip stocks zigzagged and Nasdaq moved higher on strength in the wireless sector as investors digested a fresh barrage of corporate earnings reports and widespread announcements of job losses and cost cuts.

On the corporate front, AMR posted its worst ever quarterly loss, and Sears Roebuck and Eastman Kodak both announced major layoffs.

Citing the disastrous financial effects of the Sept. 11 terrorist attacks and the continuing weakness of the U.S. economy, AMR Corp., the parent company of both American Airlines Inc. and TWA Airlines, reported a third quarter net loss of $414 million, or $2.68 a share.

The results included $397 million in special charges for the Sept. 11 attacks and a credit of $508 million for government aid for lost revenue. AMR said its loss before special items was $525 million, or $3.40 a share.

The latest loss compares with a net income of $322 million, or $1.96 a share during the same period last year.

Eastman Kodak Co., indicating it expects the economic downturn to continue into next year, said it plans to slash another 3,500 to 4,000 jobs worldwide in the fourth quarter. Kodak also announced its third quarter net income plunged 77 percent to $96 million, or 33 cents a share, from $418 million, or $1.37 a share during the same period last year.

Analysts on Wall Street had expected Kodak, a Dow Jones industrial average component, to post a net income of 52 cents share, according to Thomson Financial/First Call.

Sears announced plans to cut roughly 22 percent of its staff, or 3,600 salaried positions from its stores and field organization over the next 18 months and an additional 1,300 jobs from its headquarters by 2003 as part of a 3-year plan to increase its income by more than $1 billion.

The retailer also said its third quarter net income, excluding items, rose to $262 million, or 80 cents a diluted share, from $261 million, or 76 cents a share during the same period last year. The results were in line with Wall Street's estimates.

Honeywell posted a third quarter net loss after taking a $1 billion charge for job cuts and restructuring efforts to combat a weak economy. Honeywell posted a net loss of $308 million, or 38 cents a share, compared with a net income of $282 million, or 35 cents a share during the same period last year.

Profits from ongoing operations, before the charges, were $360 million, or 44 cents a share, compared with $613 million, or 76 cents a share a year ago.

Analysts on Wall Street had expected Honeywell, also a Dow component, to post a net income from ongoing operations of 44 cents a share, according to Thomson Financial/First Call.

DuPont beat third-quarter estimates but lowered guidance for the fourth quarter. Northrup Grumman reported a steep decline in results as the weak economy and Sept. 11 events hit business hard.

Meanwhile, U.S. Treasury prices rose. The 30-year bond rose 18/32 to 100 12/32. Its yield, which moves in the opposite direction of its price, declined to 5.35 percent from 5.39 percent late Tuesday.

In Europe, stock prices ended slightly lower in moderate trading in London, but rose in Frankfurt and Paris. The London International Stock Exchange's blue-chip FTSE-100 index eased 29.8 points, or 0.57 percent, to 5,163.5. The German DAX index rose 78.78 points, or 1.67 percent, to 4,783.00 and the French CAC-40 index gained 30.59 points, or 0.69 percent, to 4,486.35.

Analysts said stocks were supported in Germany and France by strength in the banking sector amid hopes the European Central Bank would cut interest rates at Thursday's meeting.

The ECB is expected to cut rates for the fourth time this year by a quarter point to 3.5 percent to stimulate growth in the euro zone. Interest rate cuts can lead to an increase in borrowing and lower loan repayment costs for companies.

British stocks were pressured by Wall Street's early slide.

Earlier in Asia, prices on the Tokyo Stock Exchange ended narrowly mixed amid profit taking in technology issues after recent sharp gains, although downside support proved solid on the back of active short-covering in major bank shares.

Japan's blue-chip Nikkei Average of 225 selective issues, which jumped 296.15 points Tuesday, slipped 59.41 points, or 0.55 percent, to 10,802.15 -- its first decline in four sessions. But the broader Topix index rose 4.48 points, or 0.40 percent, to 1,100.22, ending above the psychologically key 1,100-mark for the first time since Sept. 4.

Analysts said short covering in bank stocks supported the market after a week-long slump.

Sentiment toward the banking sector improved somewhat as coalition parties agreed on terms for strengthening the role of the Resolution and Collection Corp. to enable the state-backed debt collection body to buy more bad loans from banks and play a role in corporate rehabilitation.

Japan's Prime Minister Junichiro Koizumi said the nations' banks don't require another round of public fund injections now, though such a move may become necessary later to avoid disruption to the financial system. He also repeated the government's stance that it won't further delay the planned introduction in April 2002 of a limited bank deposit guarantee system.

Meanwhile, technology stocks ended mostly weaker on profit-taking, especially after declines in U.S. stocks on Tuesday.

Analysts said they will continue to monitor the spate of corporate earnings reports through the end of November. Leading high-technology companies, such as Sony, are slated to release their first half earnings later this week and next week.

Elsewhere in Asia, prices ended marginally higher on the Hong Kong Stock Exchange after drifting in listless trading ahead of a one-day public holiday. After a brief, early afternoon dip, the Hang Seng Index added 23.62 points, or 0.23 percent, to 10,243.50, helped by gains in market heavyweights HSBC and Hutchison Whampoa.

Ahead of Cheung Yeung Festival on Thursday, investors are sidelined, and there was buying in select blue-chips. The local stock market is closed Thursday for the holiday.

Prices also ended higher on the Taiwan Stock Exchange, lifted by strength in technology issues. The Weighted Index rose 112.25 points, or 2.90 percent, to 3,986.67.

Prices also ended higher on the South Korean Stock Exchange. The key Kospi Composite Index rose 10.99 points, or 2.07 percent, to 541.49, regaining the 540-level for the first time since terrorist attacks.

Analysts said the market was lifted by strength in banks and brokerage firms.

Elsewhere around the region, prices ended higher in sluggish trading on the Australian Stock Exchange. The blue-chip All Ordinaries Index rose 32.80 points, or 1.04 percent, to 3,182.10.

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