NEW YORK, Jan. 22 (UPI) -- Stock prices on the New York Stock Exchange were slightly higher at midday Tuesday in moderate trading, supported by hopes that earnings will improve in the near future, but prices eased on the Nasdaq Stock Market.
The blue-chip Dow Jones industrial average, which fell 78.19 points Friday, was ahead 21.90 points to 9,793.70. The tech-heavy Nasdaq composite index, which fell 55.48 points in the previous session, was down 21.30 points to 1,909.03.
U.S. markets were closed Monday in observance of the Martin Luther King Jr. holiday.
The broader New York Stock Exchange composite index was ahead 1.32 to 577.51 while the Standard & Poor's 500 index was ahead 0.77 to 1,128.35.
The American Stock Exchange composite index was down 3.69 points to 826.95 while the Russell 2000 Index was down 1.61 to 472.76.
Big Board volume slipped to an estimated 548.80 million shares from 559.90 million shares changing hands during the same period Friday.
Analysts said blue-chip stocks pushed higher after some manufacturing companies like International Paper Co. said they expected financial results to improve in the second quarter of the year as the lagging economy turns around.
Analysts noted this week is one of the busiest for earnings reports. About 155 of the companies in the S&P 500 and half the 30 Dow components are expected to release corporate results.
Dow industrial average component International Paper posted its sixth consecutive quarterly net loss on low paper prices, lagging demand and massive restructuring charges. Still, the company said its results, which rely heavily on the overall economy, will improve in 2002.
"Although we expect a weak first quarter, we do expect to see improvement begin in the second quarter," said International Paper Chief Executive John Dillon.
And Lucent Technologies Inc. posted an operating loss amid a severe telecom spending slump, but said second quarter revenues would grow 10 percent to 15 percent as the economy picks up and the company continues cost-cutting measures.
But technology stocks eased as a dim outlook from German chipmaker Infineon Technologies AG reminded Wall Street that the timeline for a recovery is still unclear.
Infineon said it does not expect to make a profit this year after a difficult start in the first quarter.
Analysts said Kmart Corp. kept worries alive that Corporate America has some struggles ahead after the discount retailer filed for Chapter 11 bankruptcy protection.
Meanwhile, the U.S. economy is markedly better than it was a few months ago, according to Federal Reserve Bank of Dallas President Robert McTeer.
"It's too early to know if we are at the bottom (of the recession), but things look better than they did just a few months ago," McTeer said in an address before the San Antonio Chamber of Commerce Economic Outlook Conference.
McTeer also expressed optimism over economic performance in the next several months.
"I see some hopeful signs, but a recovery not only has to get started but it has to be sustainable as well," he said, adding that he expects a modest recovery to grow increasingly "robust" as it takes hold.
The Dallas Fed president also said the fourth quarter of 2001 may in the end not prove as weak as some had foreseen, and that the effects of Sept. 11 may in the end not prove as dire as some have predicted. Fourth quarter growth numbers "may not be positive, but they may be surprising" to the upside, McTeer said.
Meanwhile, U.S. Treasury prices eased. The 10-year bond slipped 9/32 to 100 18/32. Its yield, which moves in the opposite direction of its price, rose to 4.93 percent from 4.89 percent late Friday.
In Europe, stock prices ended slightly higher in London, Frankfurt and Paris, as investors opted for the sidelines ahead of a raft of corporate results on both sides of the Atlantic.
The London International Stock Exchange's blue-chip FTSE-100 index gained 19.5 points, or 0.38 percent, to 5,158.0. The German DAX index added 1.24 points to 5,070.98 and the French CAC-40 index rose 22.92 points, or 0.52 percent, to 4,446.72.
Analysts said stocks were lifted by strength in telecom and airline issues.
Earlier in Asia, prices on the Tokyo Stock Exchange ended lower, knocked down by futures selling amid poor sentiment inspired by a Moody's downgrade on banks. Japan's blue-chip Nikkei Stock Average of 225 selective issues, which eased 13.07 points Monday, fell 229.27 points, or 2.2 percent, to 10,050.98 -- its worst level of the session.
Analysts said with less money going into cash stocks, the market was vulnerable to speculative selling in futures.
Market sentiment was hurt by Moody's downgrade of its rating outlook for 10 Japanese banks to "negative" from "stable." In trading, major banks erased earlier gains and closed lower, reflecting persistent fears over possible corporate failures towards the end of March, rather than Moody's downgrades of its rating outlooks, traders said.
Although imminent fears of major bankruptcies have eased following the Daiei bailout plan, worries over credit risks are likely to heighten in March as well as after further bank loan inspections from the Financial Services Agency currently taking place, experts said.
Elsewhere in Asia, prices on the Hong Kong Stock Exchange fell to their lowest level in 10 weeks, dragged down by weakness in China telecom issues. The blue-chip Hang Seng Index fell 202.56 points, or 1.8 percent, to 10,797.69 -- its lowest level in 10 weeks.
Analysts said China Mobile and China Unicom fell on concerns that recent regulatory changes will lead to a price war. China telecom regulators on Monday announced plans to loosen government control this year on fees charged for some telecom services, in a move expected to heighten competition in the market.
Meanwhile, prices ended slightly higher on the South Korean Stock Exchange as semiconductor stocks rebounded on hopes for a sustained chip price recovery. The Korea Composite Stock Price Index, or Kospi, rose 7.01 points, or 0.98 percent, to 724.36.
Prices also ended slightly higher on the Taiwan Stock Exchange as late bouts of profit-taking eroded earlier gains following the formation of a new Cabinet led by Yu Shyi-kun, former secretary general to the president.
After Monday's 5 percent rally, investors locked in profits and took to the sidelines to watch closely whether the new Cabinet will be able to come up with any measures to revitalize the local economy, experts said.
The benchmark Weighted Price Index of the Taiwan Stock Exchange added 6.05 points, or 0.10 percent, to 5,804.10, well below its intraday high of 5,880.83.
Elsewhere around the Pacific region, stocks ended higher on Australian Stock Exchange, posting broad-based gains, buoyed by mergers and takeover speculation.
With no lead from Wall Street given the Martin Luther King holiday in the U.S. on Monday, the Australian market was free to rise on growing investor confidence in the local economy, tempered by some uncertainty ahead of the looming profit reporting season that kicks off late this month, experts said.
The blue-chip All Ordinaries Index rose 19.90 points, or 0.61 percent, to 3,362.60.
