May 3, 2002 3 min read

By Amy Baldwin AP Business Writer

NEW YORK (AP) – Wall Street took an expected break Thursday following a two-day blue chip buying spree, leaving prices narrowly mixed. The Dow industrials managed a moderate gain, but tech stocks continued their slide.

“We needed a little bit of a breather here,” said Bob Dickey, managing director of technical analysis at Dain Rauscher Wessels in Minneapolis.

The Dow closed up 32.24, or 0.3 percent, at 10,091.87, according to preliminary calculations. The Dow has rallied 272 points since Tuesday, claiming its first three-day winning streak since the period that ended March 12.

But the broader market was lower. The Nasdaq composite index fell 32.66, or nearly 2.0 percent, to 1,644.87, having lost 10.70 Wednesday. The Standard & Poor’s 500 index declined 1.90, or 0.2 percent, to 1,084.56.

Many analysts and portfolio managers say lower prices are the only compelling reason to buy stocks now, because too few companies have issued positive outlooks and economic data has been mixed. Prices are indeed lower as both the Dow and the Nasdaq have suffered weekly declines for five of the past six weeks.

On Thursday, the Commerce Department said orders to U.S. factories rose at a robust level of 0.4 percent in March.

“The market is still looking for some convincing evidence that the economic recovery is under way and that a profits recovery is likely to follow. I think we will work in a trading range until that takes place. People are still waiting,” said Bob Armknecht, portfolio manager of the Galaxy Equity Growth Fund in Boston.

Thursday’s buying again centered on blue chips, which because of their status as safer havens indicated that investors are still being cautious.

H&R Block surged $3.81 to $43.81 after saying earnings for fiscal 2002 should be at the higher end of its already-raised expectations. The company also said 2003 results should surpass Wall Street’s forecast.

Dow industrial Procter & Gamble climbed $1.44 to $93.24, two days after releasing fiscal third-quarter profits that were a penny a share higher than expectations.

But Xerox fell $1.08 to $7.99 after Moody’s Investor Service reduced its rating on the company on about $9 billion worth of senior unsecured debt.

The market’s weakest sector continues to be technology, widely anticipated to be the last to recover from recession. Thursday’s tech losers included Microsoft, down $1.54 at $51.21, and Intel, which fell 76 cents to $27.87.

Advancing issues outnumbered decliners nearly 8 to 7 on the New York Stock Exchange, where volume was moderate.

The Russell 2000 index, which tracks smaller company stocks, rose 2.54, or 0.5 percent, to 513.37.

Overseas, Japan’s Nikkei stock average finished essentially unchanged, slipping 0.02 percent. In Europe, Germany’s DAX index fell 1.5 percent, France’s CAC-40 declined 0.9 percent, and Britain’s FT-SE 100 rose 1.0 percent.

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